Cautious optimism for UK onshore

We published our top ten predictions for 2017 on Monday. If you only got back to the office in the last few days, lucky you – and we suggest you read the piece now!

It is natural with these articles that some of the predictions come easily, while others will keep us awake at night for the next year. That could be a sign that we take it a bit too seriously.

And there is one of our predictions that we expect to be particularly worrisome in the coming 12 months. That is our prediction that the UK Government’s hostility to wind farms may start to thaw a little this year. It does not tally with the evidence we see today.

First, the Renewables Obligation support regime for onshore wind is due to end on 31 March, and we see little evidence that Prime Minister Theresa May and co. are planning to replace it. We have seen some firms call for a new support regime, but it is more likely there will be no public financial support for onshore wind from April.

Second, the planning system is still a big hurdle. The Government says that local councils can allow wind farms on sites designated in their local plans but, as of last summer, around 60% of councils did not have these plans. Planners also need to be happy that projects have community support, which opens the door for protestors.

The result is that annual investment in UK renewables is set to fall by 95% between 2017 and 2020, according to think tank Green Alliance UK. It’s all very gloomy.

So why have we made a positive prediction?

The first reason is simple: things are so bad politically that surely the only way is up. It has to be if the UK is to meet its policy goals.

The UK Government has committed to decarbonising the UK economy in the lowest carbon way possible. Guess what: the Department of Business, Energy & Industrial Strategy published research in November that showed onshore wind has the lowest levelised cost of energy compared to all forms of new electricity generation. It is true now and right through to 2030. If the government is serious wind must have a role.

Then again, May still needs to keep hostile Conservative colleagues on side as she starts Brexit negotiations. Continued hostility to wind could keep some of them happy.

The second reason that things might be looking up is because of businesses. We have watched the growth of corporate power purchase agreements in the US over the last four years, and see that similar models could work in the UK. This could help support any wind developments without taxpayer money, if they can get planning consent.

Again, that’s a big ‘if’ – but at least the UK’s energy minister understands planning. Greg Clark became secretary of state at BEIS after the Brexit vote last June and, in a previous role, he was the mastermind of the Cameron government's short-lived localism agenda that sought to return planning powers to local people.

Now, that policy gave vocal locals more power to object to schemes that they don’t like such as – ooh, let me think – wind farms. In wind, Clark should be a pariah.

But he has also suggested he is more open to onshore wind than his predecessors. He said in a speech to Energy UK in Novemberthat fears about the intermittency of wind farms is “overblown”; and that the government needed to use “every industrial policy we have” to decarbonise the economy and hit climate change targets.

That suggests to us that not only is there a little more political support there, but also that Clark has the nous to address some of the issues with the planning system if he wanted.

Since winning an outright majority in the 2015 general election, it is fair to say that the UK’s Conservative Party has not just been cool about onshore wind, it has been glacial. But if Clark can translate his words into actions then there should be a role for onshore wind in any future UK industrial strategy.

Is that a glimmer of hope? Or just the remnants of the Christmas tinsel? We will know next time the Christmas tree goes up.