How can all houses be powered by the wind?

On the 6th Oct 2020 the UK Prime Minister Boris Johnson unveiled plans to power all homes with wind power by 2030.

When I saw this announcement my first question was, is this even possible? How could a country produce enough power to supply all 25 million households by wind alone?

The Prime Minister stated that the offshore wind target would be increased from 30 to 40 gigawatts over the next 10 years. This would represent 80% of the UK peak demand which is ~50GW, in fact, the UK is already half way to this target, when considering the current onshore and offshore wind installed capacity.

Furthermore, this level of renewable generation has already been implemented in other countries, demonstrating feasibility from a grid integration perspective. For example, Germany has ~60GW of wind power.

Today renewable energy provides nearly a third of UK total power and half of this is generated by wind.

Onshore Wind Generation

Onshore wind produced 9% of the UK’s power needs in 2017 with over 12GW of onshore wind capacity, powering an incredible 7.25 million homes.

Interestingly, the Prime Minister made no mention of onshore wind in his announcement, despite being the cheapest form of wind energy. The reason is most likely the political consequences of public NIMBYism (not-in-my-back-yard). The UK government in 2014, under David Cameron, actually vowed to halt the spread of onshore wind and introduced stringent planning regulations. This has stalled installations in the last five years.

Offshore Wind Generation

The UK government is strongly promoting offshore wind generation. Few people are aware that the UK is the world leader in offshore wind with >11GW currently operating. This is more installed capacity than any other country. Offshore wind farms will generate over 10% of UK electricity by 2020.

The cost of new offshore wind has fallen by 50% since 2015 and is now one of the cheapest options for new power in the UK, costing less than both new gas and nuclear plants.

The UK has an electricity price guarantee system known as contracts-for-difference (CFD). This scheme highlights the wide gap in price between offshore wind and nuclear generation as indicated by the example below:

• Hinkley Point Nuclear Power Plant – 104GBP / MWh*
• Dogger Bank Offshore Wind Farm – 48GBP / MWh*

*_{Price escalation included to represent 2020 levels}

Between 2016 and 2021 almost £19bn has been invested in offshore wind in the UK. This supports thousands of jobs across the UK in manufacturing, project development, construction and operations.

Offshore Wind Energy – Industry Benefits

One of the other drivers for the huge forecasted growth in offshore wind are the secondary benefits this can bring to a country. Boris Johnson said his intention is to make the UK “the Saudi Arabia of wind power“.

The primary benefits of the offshore wind sector are:

• Clean and cost effective power. One GE Haliade-X 12MW turbine can offset the equivalent emissions from 11,000 vehicles in one year.
• Generation at coastal regions close to demand centres.
• Local employment will be boosted through manufacturing, ports, vessels and ancillary jobs. One estimate from the industry body IRENA states that a 1GW offshore wind project creates 20,000 person years of work over its life.
• Offshore wind industrialisation lends itself to the rejuvenation of port towns such as those found in the northeast of England and Scotland.
• It creates exportable expertise as demonstrated by the the many european companies in this industry, which are now operating globally:
  • Developers (BP, Shell, Orsted, Equinor, Iberdrola, EDF, Total)
  • Vessel providers (DEME, Jan de Nuul, Fred Olsen),
  • Consultants (DNV-GL, Mott McDonald)
  • Legal consultants (Linklaters, Norton Rose)
  • Insurance (Lloyds of London)
  • Investors
  • Financing

Offshore Wind Industry Growth

We have discussed the benefits of offshore wind energy and how it will impact the UK power sector but how will offshore wind grow globally?

The market forecasts all predict rapid growth in the coming decade, accelerated by the Covid-19 crisis. Many governments are looking for investment opportunities that both create jobs whilst greening their economies.

One percent of global wind installations by capacity in 2009, offshore wind grew to over 10 percent by 2019.

As the figures above demonstrate offshore wind is now expected to achieve a resilient 20+GW/year capacity increase from 2024 onwards.

Europe will remain the largest market but China is growing rapidly. USA is also poised for take-off and momentum is building across Asia. In addition, floating offshore installations are expected to unlock further capacity by the end of the decade opening up key markets like South Korea, Japan, Ireland, Norway, Spain and Greece.

Conclusion

Boris Johnson’s vision of all UK homes to be powered by wind energy in 2030 is definitely viable. The UK is already half-way to achieving this goal and the sector is accelerating in the development of projects and execution capabilities. Furthermore, the technology continues to drive down the cost of electricity.

This is a very exciting time for the growing offshore wind sector. At a global level there is a viable path to offshore wind producing a significant portion of all electricity. The combination of deployment at scale, clean energy, affordable costs and local jobs is providing a critical mass for the explosion of this market.