Chris Huhne, the UK’s energy secretary, said yesterday he was worried about the “financing of big renewable projects, particularly big wind farms”, which could hinder the government’s pledge to make sure 15 per cent of the country’s energy comes from renewable sources by 2020.
He has reason to be worried. At the height of the financial crisis, some of the UK’s biggest wind power projects were hit by a wave of withdrawals from financiers. In May 2008, Shell backed out of the London Array, while later that year, BP said it would focus instead on US wind power. Then, early last year, Iberdrola said it would cut its investment in the UK by 40 per cent.
But Huhne may be being a little disingenuous here. Industry sources tell us the major disincentive from building wind power capacity at the moment is not a lack of private investment, but worries about the government’s commitment to the necessary infrastructure.
The coalition’s decision to put a planned £60m grant to renew port infrastructure into its spending review dismayed many in the industry. The money would have enabled ports to receive larger ships, which could carrying larger turbines, and build significantly larger offshore farms.
EEF, the manufacturers’ organisation, told me this week the money should be approved, not least because “The market needs confidence in the government’s commitment.”
Louise Hutchins at Greenpeace agrees: “It seems like a no-brainer to us.” But she adds: “People in the industry are nervous because there have been such widespread cuts.”
Anders Søe-Jensen, the president of the offshore division of Danish wind energy company Vestas, told me yesterday that the government’s decision was the last piece of the jigsaw to slot into place, and that funders were waiting on the sidelines to see if it would be approved.
All of those parties will have been reassured therefore when Huhne said this:
Given the very substantial investment that is going to have to happen in offshore wind it makes an awful lot of sense that the investment should go ahead.
Bear in mind one caveat, however.
Chris Huhne isn’t the only minister in charge of this decision. Apart from passing it through George Osborne, the hawkish chancellor, it also has to go by Vince Cable, the business secretary. And while Cable’s experience over the cancelled loan to the steel company Sheffield Forgemasters might have made him more likely to approve such spending in the future, for the next few days at least, he is fighting rather a different battle.