Scottish Power Renewables’ director of policy and innovation spoke to Utility Week ahead of its Innovation Council Dinner last month about the impact changes to the subsidy regime have had on the onshore wind sector, the potential for storage, and how other renewable technologies are developing.
Q: As we approach one year of the Conservative government, what has the impact been of its cuts to onshore wind subsidies?
A: It was announced on 18 June. The date is etched on my mind. It wasn’t a surprise because it was in the Conservative manifesto. The election result was a surprise, but as soon as we knew that the Conservatives had a majority, there was a response from the industry that we had to prepare for what was going to come. There was a sense of the inevitable about it.
Q: How important is the grace period on the back of the subsidies being cut?
A: The end was coming anyway, but it has just been moved forward by a year. The glide path with the grace period is very helpful, and I think it is a very elegant solution.
The grace period is important because we were operating on the basis that the RO was there. There will be some attrition and some projects won’t be developed. However, we’ve got a pipeline of projects that could play in the contracts for difference (CfD) mechanism onshore wind-wise. We still see onshore wind as part of the energy mix and playing a role going forward. It’s not a niche technology any more and it’s an established part of the energy mix.
Q: What impact did the policy changes last year have on investor confidence?
A: The government had to make some pretty hard decisions and we’ve engaged with it throughout that process. To help reassure investor confidence, it’s done things, such as the grace period, to mitigate some of the things that would otherwise make it a very difficult period. The government has recognised it has to be careful in terms of investor confidence if it is going to keep the investment that is required. The money is there, it just needs to keep a stable regime.
Q: What role has storage got in helping to further develop wind and other renewable generation technologies?
A: It helps to create flexibility for these types of generation technologies. There are a range of technologies in the energy mix, and they all do certain things at certain times – whether it is helping power businesses, charging up people’s devices, or meeting peak demand. We’re going to need a mix of gas, nuclear and renewables, and other technologies, such as storage, will help to make sure we’ve got the power when we need it.
There is a range of storage technologies – including the Cruachan plant, which can do something spectacular and responds to need in just a few seconds – and they provide us with somewhere to put the excess wind when we have it.
At the other end of the scale, there are batteries in people’s homes, storing energy from the solar PV systems, and somewhere in the middle is the 1-100MW range where there are plenty of concepts ripe for exploration. Plus, we need to think about the whole electricity system and where storage fits into it.
Q: How realistic and close is the industry to achieving the £100/MWh target for offshore wind?
A: We are still on target to achieve it. The sector is on a learning curve. Our work with Dong on the West of Duddon Sands offshore windfarm gave us confidence that costs could be reduced in the sector. Future projects with CfD support are around the £115-£120/MWh mark. We are confident we can make further reaches into that cost reduction target. We can look at the components that go into them – the foundations, the cabling and so on – and get the best value and drive costs lower.