Chapter 11 - Economic and Political Considerations

Summary

This chapter is a largely non-technical overview of economic and political aspects of wind energy policy. The cost of wind energy is assessed in terms of Levelised Cost of Energy (LCoE) with equations given in full and simplified form. Using a large database historic installed costs for UK wind both on- and offshore are given, from the earliest projects to the present day. The observed trends are discussed. Operational and balancing costs are outlined, the latter reflecting the intermittency of wind power. LCoE estimates are made for a range of installed costs and output capacity factors at typical discount rates, and compared with current generation prices. The chapter considers the economics of onsite generation with the example of a private business using wind energy to offset demand; the energy displacement and export statistics are extrapolated to compare with a national scenario for 100% renewable electricity generation. The topic of ownership is introduced and examined in the context of the UK’s first community-owned windfarm. The chapter concludes with a brief review of UK renewable energy policy, which originated with legislation to protect the nuclear power industry.