Large wind farms may lose out on energy subsidy

Large wind farms may be less likely to win a subsidy under the next tranche of the non-fossil fuel obligation (NFFO), as the Department of Trade and Industry (DTI) and the Scottish Office move to allay public concern over visual and noise impacts. But roughly 20 of the 230 wind farm proposals in England and Wales are expected to win NFFO support - no different from the level always predicted by the industry. Meanwhile, novel biomass plants are set to receive a boost from the subsidy for the first time.

Bids for support under the third tranche of the NFFO - which subsidises power from renewable energy - were due in by March. The scheme has been heavily over-subscribed. Some 670 proposals were submitted for the 300-400MW of declared net capacity (DNC) available. Under the first NFFO tranche in 1990, about 100 bids were made for an order of 102MW DNC. And 282 were submitted in 1991 under the 457MW DNC second tranche (ENDS Report 202, pp 10-13).

An approximate breakdown of the applications in the latest round is shown below.

The number of bids shows that the Government's policy of promoting renewable energy continues to attract developers. But faced with mounting opposition to the growing number of wind farms in sensitive landscapes, the Government has been keen to be seen to be pulling back on the reins. Energy Minister Tim Eggar said in March that, of the 230 bids submitted, "I would expect to see no more than twenty or so wind farms result".

However, his comments appear to have ruffled few feathers in the wind industry. The British Wind Energy Association was even mildly "pleased that the Minister had not been blown off-course by a vociferous minority of alarmists".

On the basis of past splits between the renewables and the DTI's "substantial commitment" to coppicing, the wind industry is expecting 100MW of the available support. This equates to about 200MW of installed capacity - the equivalent of 20 or so medium-sized wind farms. But if one large scheme won a subsidy, then other contracts would probably be for relatively small - and therefore costly - wind farms.

The Government is in a dilemma. On the one hand, it wants wind energy to be as cheap as possible and renewable capacity in general to build up to its 1,500MW target by 2000. Large wind farms would help achieve these aims. On the other hand, Ministers want to quell public fears of wind farms sprouting up over highland Britain - but must decide if this is best achieved by restricting development to a few large schemes or by diluting the impact across the country.

One of the largest projects is Ecogen's proposal for 80MW of installed capacity at Humble Hill in Kielder Forest, Northumberland. However, the company has hedged its bets by offering the DTI a choice between the full 267-turbine development and a smaller one. Some other developers are believed to have split sites into two or more NFFO applications for the same reason.

Policy in Scotland is more clear-cut. The new Scottish Renewables Obligation (SRO), with a DNC of 30-40MW, has also been heavily oversubscribed, with 190 bids. The Scottish Office has restricted all the projects to a maximum of 15MW to address the issue of large wind farms and to prevent a single project dominating the SRO. However, this may be a short-term strategy due to the very low DNC under the SRO, a reflection of the over-supply of electricity in Scotland.

Many of the 650 bids in England and Wales are purely speculative. For example, of the 100 applications made in the waste-to-energy sector, only 4-5 are serious contenders, said one industry spokesman.

The number of bids in the energy crop band suggests that the DTI's avowed commitment to coppicing has been taken up by renewable energy developers. But the technology is new and they must wait until the autumn to discover whether the DTI will promote biomass plants on a large scale in this tranche or opt for several small pilot schemes. In the long term, biomass could dwarf the other renewables (ENDS Report 216, pp 19-21 ).

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