Danes clean up with our wind farms

Danny Fortson
Charles Hendry, the new energy secretary, will cut his first ribbon in an Essex golf club lounge on Tuesday. It’s an odd venue for the maiden power plant inauguration of his tenure but that is because the site, the Gunfleet Sands wind farm, is five miles offshore from the Frinton-on-Sea club.

It will be a momentous day for Britain’s green energy revolutionaries. The new site is one of the biggest offshore wind farms ever built, and pushes Britain’s offshore wind power capacity past 1 gigawatt — enough to power 700,000 homes. It cements our position as a world leader in this form of clean — and very expensive — electricity.

It will also be a big day for Dong Energy, Denmark’s state-owned energy giant. In a very Scandinavian way, Dong has carved out a central role in reshaping Britain’s power industry. Gunfleet Sands will make Dong Britain’s biggest wind power provider, with about one-third of the market. Larger projects are already in the works.

Anders Eldrup, Dong’s chief executive, said: “The UK is our most important market after Denmark. We have read many reports about the mismatch between supply and demand in the years to come. That is part of the reason we are here.”

The company is pushing ahead with the London Array, the giant £3.5 billion offshore farm in the outer Thames Estuary, the first phase of which is expected to be completed in time for the 2012 Olympics. It is also building the Walney wind farm near Barrow-in-Furness, and has joined Total, the French oil group, to build a pipeline connecting two giant gas fields west of Shetland to Aberdeen.

The latter, said Eldrup, is the first investment in the remote and still largely untapped region. “We are the largest leaseholder there and will continue to explore for more resources.”

But why is a government-owned utility from Scandinavia so interested in Britain? It’s the same reason that rivals from Spain, Germany and France have set up shop.

Britain’s power plants are old and dirty and North Sea gas is running out. The need to replace the plants with clean, pricey alternatives — the bill is expected to hit £200 billion by 2020 — is greater here than anywhere in western Europe.

The subsidies for offshore wind, meanwhile, are among the most generous to be found. Under current prices, renewable obligation certificates (ROCs) triple the income that comes from the power price alone. “The regime in the UK has been good,” said Eldrup. “The British authorities have been quite active in promoting activity and investment in the sector.”

It is little wonder that Britain represents half of the world’s total offshore wind power market, despite opponents who say the government is wrong to bet so heavily on an expensive energy source that, in the best case, runs for only about one-third of the time.

“All three parties in the recent election set very ambitious targets for wind. If things change it would of course be for future projects, not ones we have already invested in,” said Eldrup.

His ambition doesn’t stop at ringing the British isles with windmills. He is also a believer in gas. Indeed, the company owns exploration rights covering 2,250 square miles in the area west of Shetland and he recently bought a power station in Wales that could one day be powered by gas from those fields. The company also helped build the 750-mile Langeled pipeline that connects Britain to Norway’s second-largest gas reservoir.

The third and least developed leg of the Dong strategy is biomass. Eldrup said he was considering building plants that burn organic fuels such as woodchips and elephant grass but has yet to find a suitable project.

Where he draws the line, though, is coal. “Last year we dropped all coal developments, including two in Britain we were looking at,” he said. “Right now 85% of our power comes from fossil fuels and 15% from renewables. We want to reconstruct that so that in 30 years it’s the opposite — 85% renewables. In Britain, with the need to renew the production fleet, it is an obvious occasion to look at going the green way.”