Prime Minister Boris Johnson has pledged all UK homes will be powered by wind by 2030, though this has been dismissed as
Speaking at the Conservative party conference, he announced an investment of GBP160mln for factories building turbines, in a plan to create 2,000 jobs and support another 60,000 and make Britain the Saudi Arabia of wind”.
“Your kettle, your washing machine, your cooker, your heating, your plug-in electric vehicle – the whole lot of them will get their juice cleanly and without guilt from the breezes that blow around these islands,” Johnson said.
The goal is to install offshore wind capacity to reach 40 gigawatts over the next decade, up from the current 9.9GW, which consensus estimates say requires a GBP50bn investment.
Whistling in the wind
Analyst Joachim Klement at Liberum noted that the UK is already on track to have 38.8GW of offshore wind capacity installed by 2030, simply due to the rapidly declining costs for offshore wind.
This means Johnson’s 40GW target would only be a 3% increase.
With home electricity consumption having remained stable over the last five years thanks to increased energy efficiency, around 73% of current consumption of 110GWh per household per year can already be met by the UK’s installed offshore wind capacity.
If the annual growth trend of capacity seen since 2015 continues, the target of powering every UK home with wind would be reached in 2024.
“With the growth of electric vehicles, this might take longer but a goal of 100% of domestic consumption covered by wind energy in 2030 seems not too ambitious to us,” said Klement.
Drop in the ocean
Shadow Business and Energy Secretary Ed Miliband said the government’s announced funding “spread over ten years is a drop in the ocean, and pales in comparison to the investment by France and Germany in green jobs”.
Meanwhile, trade union Unite said the pledge is “only part of the picture” of what needs to be done to meet the country’s energy needs.
“What we are waiting for is the government’s much-delayed energy white paper which will show how the UK reaches its pledge of net-zero carbon emissions across all forms of energy by 2050,” said Unite national officer for energy Peter McIntosh.
Recent reports have suggested in the next few weeks and months the government is mulling announcements on hydrogen fuel, carbon capture and storage and an earlier ban on the sale of new petrol cars.
Tailwind for the economy
The wind initiative was welcomed as a “boost to the economy”, Klement said, enticing private investors to focus on wind projects since policy uncertainty is further reduced.
“The GBP50bn in investments over the next decade that might be needed to achieve the goal seems incrementally likely to come from private investors who choose to invest in countries that have a clear an unambiguous commitment to green energy, rather than countries with a more wavering political class,” he added.
The main beneficiaries will be wind turbines manufacturers such as Orsted, Vestas Wind, Siemens Gamesa Renewables and General Electric, though infrastructure companies such as Balfour Beatty plc (LON:BBY) and construction material producers such as Breedon could win new contracts.
Existing funds already focused on the area include Greencoat UK Wind PLC (LON:UKW), while energy storage firm ITM Power PLC (LON:ITM), whose technology can work alongside wind turbines, could also benefit from increases in this area.