Subsidies for offshore wind fell to a record low in the latest round of contracts, awarded by the Government this week.
As technology improves, and windfarms and turbines get bigger and more efficient, the electricity they generate becomes cheaper.
The strike price for electricity from two schemes due to come on stream in 2022-23 is set to fall to £57.50/MWh, down from £120 only two years ago.
That compares with £92.50/MWh for electricity from the planned Hinkley Point C nuclear power station in Somerset.
Environmental campaigners have seized on these figures.
Caroline Lucas, co-leader of the Green Party, described them as the “nail in the coffin” for nuclear new build.
She said: “While clean, green, wind power has the potential to seriously cut people’s bills, the Government’s undying commitment to new nuclear risks locking us into sky-high prices for years to come.
“The Government should now commit to this technology – and scale up investment in offshore wind so it becomes the backbone of British energy.”
Cumbria has a foot in both camps.
E.ON operates the Robin Rigg windfarm in the Solway Firth while Danish company Dong Energy has three windfarms off the Furness peninsula – Barrow, Walney Offshore, and West of Duddon Sands – with a fourth, Walney Extension, under construction. This has just started to generate electricity.
When complete in 2019, Walney Extension will overtake the London Array to become the world’s biggest offshore windfarm with a capacity of 659MW, which Dong says is enough to power more than half a million homes.
Meanwhile, further along the Cumbrian coast, NuGen wants to build a nuclear power station at Moorside, next to Sellafield. Its three reactors could supply electricity to 6m homes, according to NuGen’s estimate.
But Moorside has stalled because of a financial crisis affecting its sole backer, Toshiba. The project’s future is uncertain.
NuGen has yet to agree a strike price with the Government for the electricity generated, although chief executive Tom Samson has said he expects it to be below the £92.50/MWh figure agreed for Hinkley Point. It is unlikely to undercut the latest offshore wind contracts, however.
While clean, green, wind power has the potential to seriously cut people’s bills, the Government’s undying commitment to new nuclear risks locking us into sky-high prices for years to come.
So is this, as Caroline Lucas says, “the nail in the coffin” for nuclear power in general and Moorside in particular?
Rob Johnston, Chief Executive of Cumbria Chamber of Commerce, believes there is still a strong case for nuclear new build, including Moorside.
He said: “It’s wrong to see offshore wind and nuclear as mutually exclusive options. It’s not an either/or. There has to be room for both.
“The issue with offshore wind is that it isn’t reliable. When the wind doesn’t blow, you don’t get electricity.
“That means you have to build, say, gas turbine power stations to plug the gap when offshore wind is offline. The figures quoted for offshore wind contracts don’t take into account the costs of these back-up plants.
“Storing electricity generated by offshore wind is another option but remains a challenge despite falls in battery costs.”
He added: “We believe there is a place for nuclear power as part of the low-carbon energy mix, and it is in the national interest for Moorside to go ahead.
“Equally, we are keen to see further expansion of offshore wind and are seeing encouraging signs that the supply chain in Cumbria is starting to capitalise on the opportunities presented by the sector.”
In terms of potential employment creation and GVA impact in Cumbria, offshore wind is dwarfed by nuclear.
NuGen says that Moorside would employ up to 6,500 people during construction and 1,000 permanent jobs once operational.
By contrast, Dong Energy estimates that it supports 200 jobs in Cumbria – either employed by the company directly or in supply chain businesses – although it expects this figure to rise.
It will have invested £5.4bn in its North West windfarms by the time Walney Extension and Burbo Bank, off Liverpool, are complete, providing a significant boost for British manufacturing. But only a proportion of this is spent locally.
Construction of Walney Extension is co-ordinated from a base at the Port of Barrow, which also hosts the operating and maintenance teams for Dong’s established windfarms.
Walney Extension is made up of 40 turbines supplied by MHI Vestas Offshore Wind, the blades for which are made at its factory on the Isle of Wight, and 47 turbines from Siemens, manufactured in Hull.
We believe there is a place for nuclear power as part of the low-carbon energy mix, and it is in the national interest for Moorside to go ahead.
Closer to home, MPM North West, in Maryport, has won a £2m contract from Dong Energy for its floating bollard system, which allows vessels servicing the wind turbines to moor within an 11m tidal range at any time.
Dong Energy’s involvement in Cumbria doesn’t end there.
It has set up the Walney Extension Community Benefit Fund, which will provide £500,000 to support community and environmental projects, in an area from Seascale to Fleetwood, for each of the 25 years the windfarm operates.
Another £100,000 a year goes into a skills fund to support educational and training initiatives to equip people to work in industries such as offshore wind.
Dong has already set aside £45,000 for a scholarship scheme, in partnership with Furness College, which helps engineering students who would otherwise struggle to finance themselves through their studies.
Likewise, E.ON runs a £1m community benefit fund for Robin Rigg, which supports projects in West Cumbria and Dumfries and Galloway.
Rob said: “We believe there will be more opportunities for businesses in Cumbria to supply the offshore wind sector.
“Part of our role at Cumbria Chamber, through our Growth Hub service, is to help businesses seize those opportunities.”
For information on how Cumbria Business Growth Hub can help your business, click here or call 0844 257 84 50.© Cumbria Chamber of Commerce