Grid upgrades key to massive wind expansion

But a major reinforcement of the electricity grid is needed if these plans are to come to fruition. To enable the 2010 target to be met would cost £1.4-2.1 billion for upgraded transmission grids and £782 million for lower voltage distribution networks, the report says.

"The DTI and the Scottish Executive would need to accelerate the planning process on a national scale as a matter of urgency." Energy regulator Ofgem needs to incentivise grid operators' investment in the network to ensure that the work is undertaken on time.

Realising the Government's aspiration for renewables to supply 20% of electricity by 2020 would require additional investments of £0.9-1.1 billion.

Compensating for the intermittency of sources such as wind is not as costly, according to the report. Meeting the 2010 target with a 7.6% wind penetration would cost an extra £31-55 million per annum to balance the system, while meeting the 2020 aspiration with a 14.2% wind penetration would incur £84-150 million per annum.

In 2002, a report to the DTI from consultants Ilex estimated that it would cost £143-398 million per year to balance the system if the 2020 aspiration is to be met (ENDS Report 333, pp 26-30 ).