Sebastian Payne — The Spectator — November 22, 2012
Your taxes are meant to be supporting smaller turbines. In fact, they’re making giant ones less efficient
Almost everybody agrees that wind turbines are ugly and inefficient. But you’d think that the government, if it must persist in subsidising renewable energy, would do everything it could to incentivise wind power producers to create as much energy as possible while keeping the aesthetic damage to a minimum. Astonishingly, it is doing the opposite.
Inquiries by The Spectator have revealed a scam known as ‘de-rating’. Green businesses are modifying large turbines to make them less productive, because perverse government subsidies reward machines that produce less energy at nearly double the rate of more efficient ones. It’s extraordinarily profitable for a few beneficiaries, even if it clutters the countryside and does little to save the planet.
Under the government’s Feed-In Tariff (FIT) scheme, which aims to make renewable energies competitive with fossil fuels, the size of a turbine is measured not by height but by power output. If a turbine pumps out more than 500kW, its owners receive 9.5p per kilowatt hour. But a ‘smaller’ sub-500kW one receives a subsidy of 17.5p per kilowatt hour, supposedly to compensate for its lower efficiency. The idea is to lure smaller wind-power producers into the market.
Problem is, while smaller turbines are more popular with the public, those designs don’t produce anything like the 500kW needed to take full advantage of the subsidy. So instead, investors are buying big, powerful turbines and downgrading them, tweaking their components to churn out no more than the magic 500kW. It’s simply far more lucrative to hobble bigger turbines — machines that ought to be capable of producing almost twice as much electricity.
For instance, it would cost a farmer roughly £1.5 million to plan, buy and put up a single 80-metre turbine, which could produce up to 900kW. He could run it at full capacity, and see a 7 to 10 per cent return on his investment each year. But if the machine’s efficiency were lowered, industry sources suggest, the return would jump to between 17 and 20 per cent. Clearly, the under-500kW subsidy bracket is where the money is. Last year, Ofgem reported a 850 per cent rise in FIT approvals for 100 to 500kW turbines, compared with 56 per cent for the 500kW to 1.5mW category.
Turbine suppliers boast about selling products that take advantage. The German firm PowerWind says on its website that it has developed its PowerWind 500 turbines ‘especially for the UK market’ and encourages potential customers to ‘secure the highest FIT in Europe’. In other words: turbines designed especially to game British subsidies.
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