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COLUMN-UK tests payoffs for wind and shale opponents: Wynn
June 6, 2013 / 2:50 PM / in 5 years

COLUMN-UK tests payoffs for wind and shale opponents: Wynn

(The author is a Reuters market analyst. The views expressed are his own.)

By Gerard Wynn

LONDON, June 6 (Reuters) - Developers still have some numbers to crunch, but Britain’s wind power industry may just about be able to breathe a sigh of relief after the government published changes to industry planning and regulation on Thursday.

The new rules may also yet prove better news still for companies in the emerging shale gas industry.

Wind power players had been bracing for some time for the results of the Department of Energy and Climate Change’s consultation, which follows a cut in subsidies last year and vigorous campaign by rural groups in the ruling conservative party who do not like how modern windmills look.

On the face of it, the department has played to that audience with more restrictive planning rules and fivefold increase in payments that wind developers must make to local communities.

But the latter move also gives the industry hope that in doing so opposition can be bought off - and may provide a blueprint for how shale gas projects will be able to do likewise in future.

For the bulk of the projects being pushed through to meet 2020 EU targets on renewable power generation, the horse has also already bolted.

Britain is hugely dependent on onshore wind to meet the legally binding targets, but approved projects already account for some 90 percent of the 14,890 MW in generation planned by the end of the decade.


The overall changes give communities more control over new wind power projects, either to reject wind farm applications or else to benefit financially from supporting them.

Planning guidance in England will change to give local communities mandatory earlier input in the planning process, and to give more weight to landscape over renewable energy targets. (“Onshore Wind Call for Evidence: Government Response”, June 2013)

“The Government will make pre-application consultation with local communities compulsory for the more significant onshore wind applications,” DECC said.

Involving local communities sooner, and their landscape concerns, will weigh against approvals.

That adds to recent changes where local planning authorities no longer have to adopt targets for wind farms set at regional level.

On the other hand, the government has increased fivefold the amount of money developers will return to local communities, in a voluntary measure which will apply to projects where construction has not yet started, and which could sway communities in favour of projects.

At present, under a formal, voluntary agreement called the “Community Benefits Protocol”, the trade body RenewableUK recommends that onshore wind developers return 1,000 pounds annually per MW installed for the lifetime of the project to the local community, for them to spend as they please. (“A Community Commitment - The Benefits of Onshore Wind”, Feb. 2011)

RenewableUK on Thursday supported the government’s recommendation to increase that to 5,000 pounds.


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The Conservative Party has strong representation in rural areas of southern England, where a typical view opposing wind farms was expressed by the leader of Conservative-led Lincolnshire County Council, Martin Hill, last year.

“We feel that enough is enough,” he said, quoted in a UK Parliament memo on onshore wind planning policy. “Not only are these things spoiling our beautiful countryside for future generations, they could also seriously damage our tourism industry.”

As of April 2013, a total of 13,327 megawatts (MW) had been approved, compared with some 6,677 MW refused planning permission and some 4,183 MW of withdrawn applications. (See Chart 1)

Of the approved projects, some 6,346 MW are now operational, the data show.

Of the remainder, some 6,737 MW are either under or awaiting construction. (See Chart 2)

But it is unclear how many of the approved projects awaiting construction will be actually built: the profitability of these will now be directly impacted by Thursday’s measure.


Another motive for the increase in community benefits could be to test similar community sweeteners for shale gas, where a gas industry-backed initiative could work in a similar way.

Public acceptance will be key to shale gas development in Britain, given high population density and the fact that landowners do not own mineral rights, and so cannot benefit from selling these to developers as in the United States.

The government only allowed shale exploration to resume in December, under tighter rules, a year and a half after tremors set off by hydraulic fracturing triggered a ban.

In March the administration also created a new Office of Unconventional Gas and Oil (OUGO) within its energy and climate department, whose task was to develop a community incentive scheme for shale by the summer.

An energy and climate panel of lawmakers also gave strong backing to direct benefits for communities in a recent report.(“The Impact of Shale Gas on Energy Markets”, April 2013)

“Local communities must be able to benefit from any shale gas development in their area and the new Office will look into how this can be properly achieved,” the government said in March. (Editing by Patrick Graham)

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