Wind Power in the UK (PDF). - Sustainable Development Commission

sd.commission.org.uk

Wind Power in the UK (PDF). - Sustainable Development Commission

4 Costs and benefits of windtheir profits. Therefore, the NAO expects the ROscheme to be providing wind power generatorswith subsidies that are above the level neededfor project viability. The NAO report recognisesthat this in unavoidable in the medium term,but does recommend that onshore wind iseventually reassessed and possibly excludedfrom future RO targets, meaning it would notqualify for ROCs.The fact that the RO does not cover networkreinforcement costs is due to the structure of theUK’s electricity system, which separatesgenerators from the companies that operate thedistribution and transmission networks. Thecosts of network reinforcement will thereforefall on the latter, who in turn will pass these onto the consumer through network charges.A similar situation occurs for the cost ofadditional balancing services, required for higherpenetrations of wind capacity. These costs areunlikely to fall solely to wind energy generators,as they are not easy to determine in real time.They will therefore be picked up by othermarket participants (as part of the ‘BalancingServices Use of System Charges’ levied on allusers of the system), and will be passed on toconsumers.The Government is in the process of reviewingthe Renewables Obligation xiv although the scopeof this review excludes major changes to the RO.Any future changes will not affect projects thatare already built, approved or planned – this isto avoid damaging investor confidence.4.7 Alternatives to wind energyAlthough the above analysis shows the netadditional cost of wind to be relatively small, itis important that the alternatives to windenergy are also considered. Below is a summaryof the main alternatives available and the rolethey might be expected to play to 2010 andbeyond.Energy efficiencyAlthough not a fuel in itself, energy efficiency isoften the cheapest and most effective way ofreducing fossil fuel consumption and emissionsfrom power plants. This is something all sectors– domestic, commercial and industrial – cancontribute to, not only by reducing electricityconsumption but by reducing use of all fossilfuels, including gas for heating and oil fortransport. The benefits of energy efficiency arewell known, yet too often opportunities aremissed and investments are not made. TheCarbon Trust estimates that small and mediumenterprises are wasting over £1 billion onenergy per year and that many potentialinvestments could be at low or zero cost.The Government published an Energy EfficiencyAction Plan in 2004, which sets out how itintends to achieve cuts of 10 million tonnes ofcarbon by 2010, which represents around a thirdof the emissions reductions required 44 . As part ofthis the Government funds schemes to makeinformation available to the public on what theycan do. Websites run by organisations such asthe Energy Saving Trust (www.est.org.uk),which focuses on the general public, and theCarbon Trust (www.carbontrust.org.uk) whichconcentrates on the commercial and publicsectors, have a wealth of information on how tosave energy or to use it efficiently. Energysuppliers are also required by Government tooffer energy saving measures (energy efficientboilers, lamps & appliances, and insulation) totheir customers, and this requirement isincreasing. However, households need to takexivSee http://www.dti.gov.uk/renewables/renew_2.2.5.htm for further information.38 Wind Power in the UK sustainable development commission

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