This paper is concerned with whether or not wind turbines can be considered to be a good investment for renewable energy in the UK. In order to answer this question, the paper will consider both sides of the debate about renewable energy, as well as considering the specific nature of wind farms as they apply to the UK. It will also consider the effect of such things as the potential for economic growth, the nature of investment itself and the existing policies which exist towards developing renewable energy in the country. The paper will argue that wind power is a good investment for renewable energy in the UK. It will begin by describing the large amount of investment which already exists in the area and will then go on to describe various counter arguments and potential problems which may lead to wind power being described as a bad investment. It will conclude by arguing that these factors do not make wind power a bad investment in relation to the UK’s existing energy policy but that it should be seen as one part of a wider energy policy.
Wind power has recently become a major source of investment for several bodies in the UK. These bodies include the UK government, companies who generate electricity and are seeking to capitalise on a growing market in renewable energy and also ‘green’ banks who seek to invest money in the growing area of renewable energy production. If one looks simply at the figures for recent investment then seems as if many people think that wind power is an excellent investment opportunity. One journalist writes that, while this investment is often motivated by government incentives, it can nonetheless be seen to be a major indicator of the potential for growth in the area of renewable energy and that ‘the real story is the start of longer term investment plans which promises to make green growth a reality.’ (Davey, 2014.) A significant amount of this money has been invested in wind power and in individual wind turbines and farms. In March it was reported that a company called GIB had invested £240m in off shore wind farms. It expected to receive a significant return on this investment. A writer who reported on the story wrote that this represented the start of what several bodies considered to be an increasingly large amount of money being invested in wind production, both on shore and off-shore. (Murray, 2014.) It can be concluded from the intense and frequent activities of investors in the UK that many people consider wind power to be a vital and growing area for investment. However, in order to determine whether or not it is a good one for the UK as a whole it is important to consider several drawbacks and problems which exist. The rest of this paper will do this.
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"Are Wind Turbines a Good Investment for Renewable Energy in the UK".
The first point to be considered is whether or not wind power can be seen to be a good investment in terms of the amount of time which the investment will last for and in terms of any extra charges which may unexpectedly result from it. Any idea of investment requires an understanding that one places in money in an area in order to make more money in return. It requires that the object in which one invests makes money over time and that it lasts for a fixed, and usually quite long duration. One of the major criticisms which has previously been presented against investing in wind farms as kind of renewable energy has been that they do not individual wind turbines do not have a long enough duration. In order for them to be a good investment then it is necessary that these turbines require a minimum of maintenance and that will not have to be replaced frequently. Several years ago studies showed that existing wind turbines were decaying at a rate which was much quicker than had been expected and that, as such, they would require a lot more money to maintain than had previously been thought. This discovery was reported widely in both scientific journals and in the media. One journalist wrote that leading economists had predicted that ‘in the coming decade far more investment will be needed to replace older and ineffective turbines – which is likely to be passed on in higher house-hold energy bills.’ (Cohen, 2014.) Here, the journalist makes the argument that not only would wind energy be a bad investment for the UK government but it would also be a bad investment for the people who live in the UK as they would need to meet any extra charges which resulted from needing to replace wind farms. Later in the same article the argument is made that in countries which have effective systems for generating wind power, this is only the case because they charge high costs for maintenance and that this cost is reflected in the amount of money which is raised from taxes.
This research has, however, been discredited recently and it seems that wind power may be a good investment in terms of the amount of time that individual wind turbines may last and how much energy they may continue to produce. Several newspapers and publications have reported recently that there is good evidence to suggest that wind turbines will last much longer than the previous reports had suggested. A study which was conducted recently found that ‘the UK’s earliest turbines, built in the 1990s are still producing three quarters of their original output after 1 years of operation.’ (Myers, 2014.) The writer also states that, while this was to be expected of the turbines when they were built, turbines built more recently are expected to be even more productive and to continue to produce high amounts of energy for much longer than those which were constructed in the 1990s. This new research suggests that wind power is a good investment for the UK in terms of the amount of time that individual wind turbines will last and how much energy they will be able to produce throughout their lifetime.
One reason why it may seem that wind power is not a good investment for the UK in terms of its policy towards renewable energy is that wind turbines are often seen to have a negative environmental impact. This has led to occasional protests from community groups who claim that the beauty of the countryside is spoilt by having large wind turbines which spoil the view around them. It is has been the case recently that the politics of wind power has involved other domestic interests. In one particular instance it emerged recently that two very expensive wind turbines could not be used as they would interfere with local radar signals. One journalist write that;
‘The pair of 130m tall turbines, which cost a combined £7m, were designed to produce 10,000 Mwh of electricity annually…enough to power 3,000 homes…But the rotating blades pose a problem for air traffic controllers because they cause a blinking light to appear on radar screens at nearby East Midlands Airport.’ (Collins, 2014.)
This inconvenience and sense of bad planning has also led to a large amount of criticism directed towards the developers of that particular project and towards the UK government as a whole. (Collins, 2014.) This political complication has led to a retardation of the development of renewable energy options in the UK and may suggest that it is a bad option for investment. This is also often reflected by political figures and parties who have a prejudice against wind power due to the environmental effects which is it described as having. In 2012, The Economist reported that an ‘anti-wind zeal runs through the [Conservative] party.’ (Economist, 2012.) This zeal and political disagreement threatened to overshadow the desire to increase the amount of investment in renewable energy, and especially in wind power. As it is often the case that wind power is caught up in political debates, then it could be argued that wind power is not a good investment. It can be seen to be divisive and to lead to tension within political parties and within community groups. However, the existence of large scale investment in wind power seems to suggest that these factors have not so far deterred investors from putting money into the area, and therefore that they do not seem to be a major factor in determining whether or not wind power should be seen as a good investment for the UK.
A common criticism which is made of wind power, and of renewable energy in general is that it is very expensive, and that these expenses will sooner or later need to be passed onto the consumers of the energy which is produced in the form of higher bills and taxes. It is also observed that the devices which generate wind power are expensive to produce and that they may not necessarily lead to a large return. In January 2014 The Economist reported that this was largely due to the fact that few companies have invested in the process of actually making things such as wind turbines and that therefore they are costly to produce. (MJ. 2014.) The author of the piece also notes that, because most of the cost of wind farms is paid for at the start, i.e. when they are produced, they are especially vulnerable to the flow of capital in different countries. (M.J. 2014) A large amount of money is needed at the start and therefore many wind farms simply never get built. However, the apparent expense of the process of production has been argued against by those who seek to promote the use of on-shore and off-shore wind farms in the UK. In 2012 a think-tank produced a paper which sought to lay out the arguments for and against the use of wind power in the UK. They argued that the relative expense involved was unimportant when one considered the benefits of wind-power, both for those who invest in it and for the country as a whole. They write, however, that these benefits can only maximised as the result of careful infrastructure and planning: ‘The main concerns in choosing the best energy technology mix are not network stability but economic cost and environmental side-effects.’ (Bassi et al. 2014, 34.) They claim that wind power should stand as one part of a varied policy towards investment in renewable energy in the UK. It could therefore be argued that once several factors have been taken into account, wind power still stands as a good investment for renewable energy in the UK, however this investment should also include other renewable energy sources and should also constantly take account of economic and environmental factors.
In conclusion, this paper has argued that wind power is a good investment for the UK. It has noted the amount of investment which has recently taken place and has also identified several problems which may exist with it. Its concluding argument is that wind power is a good investment, however that it cannot stand alone and should be thought of as one part of a wider investment in renewable and non-renewable energy.
- ‘A lot of Hot Air:’ The Government’s Energy Policy Gets Mired in Politics.’ The Economist, 17th November, 2012. Retrieved from: http://www.economist.com/news/britain/21566680-governments-energy-policy-gets-mired-politics-lot-hot-air
- Bassi, Samuela et al. 2012. The Case for and Against Onshore Wind Energy in the UK. Grantham Research Institute on Climate Change and Policy. Retrieved from: http://www.lse.ac.uk
- Collins, Nick, 2014. ‘£7m Wind Turbines at Standstill Over Radar Fears.’ The Telegraph, 13th May 2014. Retrieved from: http://www.telegraph.co.uk/earth/energy/windpower/10828204/7m-wind-turbines-at-standstill-over-radar-fears.html
- Cohen, Tamara, 2012. ‘Wind Turbines Only Last Half as Long as Previously Thought as Study Shows Signs of Wearing Out After Just 12 Years.’ The Daily Mail, 31st December 2012. Retrieved from http://www.dailymail.co.uk/news/article-2254901/Wind-turbines-half-long-previously-thought-study-shows-signs-wearing-just-12-years.html.
- Davey, Ed 2014, ‘Britain’s Renewable Energy Investment Boom is a Story Rarely Told’ The Guardian, 23rd April 2014.
- M.J. 2014, ‘Why is Renewable Energy So Expensive.’ The Economist. 5th January 2014. Retrieved from http://www.economist.com/blogs/economist-explains/2014/01/economist-explains-0.
- Myers, Maxine, 2014, ‘New Research Blows Away Claims that Ageing Wind Farms are a Bad Investment.’ Science Business, 26th February 2014. Retrieved from: http://www.sciencebusiness.net/news/76470/New-research-blows-away-claims-that-ageing-wind-farms-are-a-bad-investment
- Murry, James, 2014, ‘UK Green Bank Invests £460 in Offshore Winfarms.’ Guardian, 31st March, 2014.
