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EDF puts UK wind on its agenda in mixed week
Here’s an exciting experiment for you.
Take one UK wind industry professional and start a conversation with them. Q2 Quarterly Drinks would be a great place to do so.Then mix ‘EDF’ and ‘UK energy policy’ into one of your sentences. If done correctly, this should provoke an extreme reaction of eye-rolling and exasperated sighs.
I’m sure you know why. Five years ago, the UK government agreed to let French utility EDF build the controversial Hinkley Point C nuclear power station in Somerset, paying a guaranteed £92.50/MWh that it set to rise in line with inflation.
The deal looked expensive then, and stunning falls in the price of offshore wind and onshore wind since then have made it look more so. The £20bn 3.2GW project could also be ruinous for EDF if the worst fears for problems at the projects are realised. It is set to use the same reactor design as the Flamanville project in northern France, which is six years late, three times over budget and facing problems with its welding. Mon dieu!
But this focus on Hinkley Point C makes it easy to forget that EDF is a serious player in UK wind. The utility currently operates 27 onshore wind farms with total capacity of 489MW, and the 62MW Teesside offshore wind farm off the Yorkshire coast.
And the company reminded us of its UK wind plans last week as it picked up headlines, good and bad.
Let’s start with the good. On Thursday, Mainstream Renewable Power revealed that it had sold the 450MW Neart na Gaoithe offshore wind project to EDF for a price of more than €500m.
Mainstream won backing for the project under the UK’s Contracts for Difference regime in 2014 at a strike price of £114.39/MWh, which has now risen to £127.21/MWh. The project was then mired in a legal fight with bird charity RSPB, which was only resolved in Mainstream’s favour by the Supreme Court in November.
That battle was frustrating, of course. But the fact Mainstream has been able to exit means that it can reinvest the proceeds in its emerging markets strategy. And EDF has a project that is ready to build, with a CfD that looks generous given the fall in the cost of offshore wind power over the four years since it was awarded.
It could also help EDF to establish itself in offshore wind, which it has not been able to do in its home market. It gained support from the French government in 2012 to develop three offshore projects with total capacity of more than 1.4GW, but it has experienced delays and is now faced with a government that wants to change the generous deals agreed then. Say what you like about Theresa May and co. – at least when they end up with something that looks like a bad deal, they stick with it!
But it isn’t all straightforward for EDF’s UK wind ambitions. Last week, it emerged that the utility has been looking to renegotiate plans for two onshore wind farms on the Scottish island of Lewis, to increase turbine heights at its 162MW Uisenis and 130MW Stornoway wind farms from around 150metres to 200metres.
EDF has been looking to take advantage of UK government plans to back onshore wind farms on remote Scottish islands – in other words, away from England and any Conservative heartlands where it could cause more political headaches.
And yet, it turns out that crofting communities in Scotland have opinions too, and are furious about the idea of building offshore-sized turbines on land. EDF, via its Lewis Wind Power joint venture with Amec Foster Wheeler, plans to bid for UK government support in a planned CfD auction in 2019.
I can see the logic for bigger turbines. They would help EDF to generate more power at the same site. But I also sympathise with objectors who were already against the development and are now faced with even bigger turbines near them. This isn't the way for EDF to secure more of the local support that the schemes need.
Goodness knows, it could do with a little less of the eye-rolling.