Following the publication of the Offshore Wind Group (OWG) report on a possible offshore wind farm development off Guernsey’s West coast in the GP on 18th October, we feel compelled to respond to point out that the report is short on detail, long on speculation and generalisation, and lacking in substantive credibility.
Our board member, Rupert Dorey, says this from the perspective of someone who believes strongly in the benefits of renewables in our energy mix (of which wind power is but one element), as well as from the implied societal, economic and environmental benefits that could accrue to Guernsey from developments in these technologies.
He further added he is perplexed as to why the self-appointed OWG group (consisting of 15 Deputies, including 3 from P&R ,and the Chief Minister) felt it necessary to undertake a report when the States has already mandated authority to E&I amongst others to prepare a Policy letter on the Electricity Strategy for discussion in the States in Q1 2023, which will consider the Electricity Strategy in its entirety, rather than just parts of it.
The OWG is at pains to highlight the importance of engagement with many stakeholders in any infrastructure project for it to have any chance of success, including engagement with local communities, consultations with private and public bodies, including business and political leaders.
This report by contrast appears to be a siloed exercise that lacks any serious substance and that the OWG is acting in a way that is the antithesis of effective good governance and appropriate authority.The report is full of generalisations and unverified figures (such as references to “tens of millions of pounds”, which it mentions on seven separate occasions). This is designed to grab the readers’ attention, but lacks any form of precision, and is unsupported by any evidence.
There is little evidence supporting the commercial viability of such a project. The report appears to rely on the OWG’s perception of the goodwill of the developer to not only pay a handsome up-front licensing fee but also to offer Guernsey discounted electricity as well. Needless to say these kinds of issues are integral to the commercial returns of a project, not some kind of speculative beneficial gift to Guernsey to sort out its energy poverty issue, or to finance the subsidised installation of heat pumps etc as the OWG speculates.
There is little substance to the complex issues of the legislative and regulatory framework, which are brushed aside with the cursory explanation that as Guernsey is self-governing it has an ability to make “quick and nimble decisions”. This is something that is rarely witnessed in practice.
The estimated development costs cited in the report of £4-5bn, do not sit easily with comparator projects. The deputies may be aware that the Spanish utility Iberdrola is currently building a 500MW windfarm in the bay of St Brieuc off the North Brittany coast, some 25 miles to the south of Guernsey, consisting of 64x 9MW turbines on steel jackets in c.20m of water. The cost is reported to be around €3bn. It seems far fetched to suggest that a windfarm of three times the size off Guernsey, in far more hostile and deeper waters, and requiring far more expensive semi-submersible wind installations could be achieved on a pro rata unit cost of output for around 50% less. It is worth noting that floating turbines are still relatively embryonic in their commercial usage currently, although their time will come. The experimental Kincardine floating turbine windfarm off Aberdeen is one example, where the costs per unit output are double the £2.5m/MW that the OWG report estimates for its proposal.
The OWG report goes on (correctly) to point out that Guernsey is unlikely to be able to rely on the use of CFDs (contracts for difference) that larger sovereign Governments can offer to act as buyer of last resort for electricity. Instead, it speculates that Guernsey might be able to achieve something similar by obtaining insurance for this eventuality. Typically, insurers only offer or settle claims via a one-off payment, so negating any ability for them to act as the marginal buyer of surplus electricity.
The OWG report also suggests (speculatively) that their proposed windfarm development would negate the need for other infrastructure capital expenditure, notably a new harbour on the East coast and a second direct interconnector cable to France, saving around £450m. To even suggest that these are connected issues is so far-fetched as to be laughable, particularly when the OWG report acknowledges a development time of over 10+ years for the windfarm, if one started immediately, vs 3-5 years for a second interconnector.
So in the spirit of speculation, our board (member Rupert) would like to ask others why Deputy Meerveld and the OWG felt encumbered to appoint themselves to undertake a report that serves no practical purpose other than to offer heightened and unrealistic expectations, based on an unsupported and unverified analysis? None of them are experts in the energy field, whereas the States have already mandated E&I to engage paid experts to assist in their recommendations.
The OWG are setting themselves up to be on the receiving end of a very disappointed population when their grandiose plans are found to be falling far short of expectations. That is no way to run a cohesive Energy Strategy or to deliver an effective Infrastructure project.