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16 | UTILITY WEEK | 28Th FEbrUarY - 6Th March 2014 Policy & Regulation Analysis T here is nothing new in the govern- ment's latest announcement on off- shore wind, an official admits half way through a press briefing on Wednesday morning. So why are we here? The official justification is that the Off- shore Wind Programme Board has published its annual report, which makes the not-so- startling revelation that: "Maximising the economic benefit from offshore wind is a key priority for government." Compelling stuff. The real news was that yet another off- shore windfarm had been axed, and it was starting to look embarrassing. The consortium behind the 630MW Lon- don Array dropped plans for a further 200- 240MW because of concerns about the threat to birds. To be more precise, because a study to assess the impact on the red-throated diver would take too long. There was no damn- ing evidence more turbines would harm the creature's habitat; it was for the developer to prove they wouldn't. As general manager Mike O'Hare explains: "We believe it will take until at least January 2017 for that data to be col- lected and although initial findings from the existing Phase 1 site look positive, there is no guarantee at the end of three years that we will be able to satisfy the authorities that any impact on the birds would be acceptable." The shareholders decided not to take the risk and surrendered the lease for the site. The RSPB is generally in favour of wind power and does not gloat over the decision. "Climate change is the biggest long-term threat to wildlife and we need an urgent transition from fossil fuels to low-carbon renewable energy," says head of energy policy Harry Huyton. However, he notes the Thames Estuary supports 38 per cent of the UK wintering population of red-throated divers and "it is vital that any development in this area is planned sensitively". The red-throated diver joins the sand- wich tern and the basking shark on the list of creatures blamed for holding up offshore development. The unappealingly named Orjip (Offshore Renewables Joint Industry Programme) is attempting to develop clearer guidelines on such issues. At the moment, much is at the discretion of planning author- ities. "The regulations do not specify how many birds a windfarm is allowed to kill," notes an official at that Department of Energy and Climate Change (Decc) press briefing. In 2012, Centrica was forced to shelve its Dock- ing Shoal windfarm, writing off £10 million, over the lives of an estimated 90 birds a year. Then there are the technical challenges of building in ever deeper water, which even a proposed subsidy worth £155/MWh is appar- ently insufficient to cover in some cases. These are some of the factors behind the collapse of a number of high-profile off- shore windfarms in recent months. RWE Innogy ditched the Atlantic Array, worth up to 1,200MW, in November. Scottish Power abandoned the Argyll Array, worth up to 1,800MW, in December. Centrica gave up on the 580MW Race Bank aer failing to make the cut for early subsidy approval, selling it to Dong for £50 million. Decc officials insist "some rationalisation of the pipeline is to be expected". It is "very normal" for projects to fall away as a sector matures, they say. The UK leads the world ("not such a great prize if no other countries are interested," one journalist remarks drily), with 3.6GW installed. The next biggest markets are Den- mark with 1.2GW and Germany with 520MW. Decc still confidently predicts 10GW of capacity will be installed by 2020 (official sce- narios give a range from 8 to 15GW). Industry and government working groups are scru- tinising all parts of the chain to bring costs down to a target of £100/MWh for projects taking final investment decisions in 2020. Trade body Renewable UK also puts a positive spin on the situation. We are see- ing a "leaner, fitter, trimmer" sector with "more streamlined projects", says director of offshore renewables Nick Medic. The over- all pipeline is "still healthy", he says, citing Dong's announcement earlier in the week that it plans to install massive 8MW turbines at its Burbo Bank site. Medic adds a little dig at government: "All this has been achieved despite the uncertainty caused by Electricity Market Reform and mixed messaging from some parts of government on its support for the deployment of renewable energy." With government rationing early access to support under the Electricity Market Reform plans, it is not clear there would have been enough money for all these pro- jects to go ahead anyway. Beyond 2020, the numbers are even less certain. Decc boasts of a long-term pipeline of 43GW, but more than half of that is only at scoping stage and experience shows the size of a typical array shrinks by a third in the course of development. The lack of clarity over the size of the market is proving a bar- rier to manufacturers setting up in the UK, which in turn is seen as critical to bringing costs down. Faced with questions on why Decc is not showing greater ambition, the official verges on the political. "Every single penny of the budget that supports this comes from peo- ple's bills, so the idea that you would set out clearly, without any equivocation, a target… there is a trade-off," he says. So, it may have been a desperate bid to limit the damage of yet another negative headline on offshore wind. But maybe – just maybe – no news is good news. Decc in damage control mode Another offshore wind project bites the dust, but Decc is not downhearted and, as Megan Darby reports, the department is still confident that 10GW of capacity will be installed by 2020. OffshOre wind capacity 50 0 10 20 30 40 Scoping Planning Installed now Under construction Post-planning Capacity (GW) Source: Decc