TP24. Windfall Gains

It is often claimed that Scotland’s topography and weather patterns could enable it to become the renewable energy capital of Europe. In the mid 20th century the rainfall over the deep glens to the north and west was exploited for hydro power, with huge concrete dams creating new reservoirs or extending existing lochs.

Now it is the turn of wind power. The efficiency of the turbines increases exponentially in relation to increases in wind speed, and Scotland’s exposed mountains and moors offer many ideal locations. Not everyone is happy though, and arguments rage in the press about the reliability and desirability of wind energy. Tourism is a major component of the economy of the Highlands and Islands, and businesses fear the consequences of industrialisation of the relatively unspoilt landscapes. Environmentalists are divided into two camps – those who wish to safeguard the landscape and its wildlife and those who see the need to address climate change as a greater priority. Local authorities wrestle with a flood of planning applications for windfarms and blame central government for the absence of a coherent renewables strategy.

In order to achieve the target of 10% of electricity to be derived from renewable sources by 2010, the government’s Renewables Obligation provides financial incentives to suppliers. The National Audit Office calculated in 2005 that “Pursuit of the target will result in costs for the consumer and taxpayer exceeding £1 billion a year by the end of the decade, which will increase the price of electricity by around 5 per cent.” (1) . They also noted that “some projects using the cheapest technologies (onshore wind and landfill gas) at the best sites receive more support :trom the Renewables Obligation than necessary to see them developed.(2)

So where has our money been going? Into the pockets of landowners for a start. When windfarms first started to appear in Scotland in the mid 1990s, the going rate for rent was understood to be between £1500 and £2200 per turbine per annum. Now it is over

£ 1 0,000.(3) There was public outrage a few years ago at reports that the Duke of Roxburghe, one of Scotland’s largest landowners, stood to receive an estimated £ 14m over the 25 lifespan of a windfarm for allowing 56 turbines on his grouse moors in the Borders.(4) More recently, the 36-turbine Braes of Doune windfarm near Stirling is reported to be generating not only 72 megawatts of power, but £400,000 of megabucks per annum to the landowner.(5)

Our society has almost become inured to the idea of landowners making easy profits out of monopoly rights to natural fesources and out of the investment of public money without having to do anything themselves. But windfarms add another dimension to this, and the concept of private fortunes being made out of the way the wind blows over the hills, driven by weather systems originating thousands of miles away over which -no-one has control, is causing a few more raised eyebrows – especially when it is all so obviously happening at the expense of the consumer and taxpayer.

Elsewhere in Scotland windfarms have been proposed for community-owned land and have split local opinion. In April 2008 the Scottish Government overturned a decision by Western Isles Council by refusing permission for a colossal development on the Isle of Lewis. With 181 turbines, 140 metres in height from tower-base to blade-tip and generating 652 megawatts, it would have been the UK’s biggest at the time. The turbines would have stretched in an almost unbroken corridor across the northern part of the island, utterly transforming the landscape and destroying internationally important peatlands. Of the three estates it was to cross, one is community-owned and would have received part of the rent. It is hard to criticise rural communities in economically marginal areas for wanting their share of the bounty, but the opportunity to turn commercially unproductive land overnight into an income-generating asset must inevitably influence the decision-making process and contribute to the division within those communities.

Scotland’s renewables potential stretches way beyond onshore wind, but it is generally acknowledged that the financial incentives in the Renewables Obligation system have skewed the industry towards wind power at the expense of developing other technologies such as wave and tidal energy. Government incentive schemes distort markets and often leave an unwanted legacy, and we may well look back and compare the renewables industry with commercial forestry where tax breaks led to so much environmental destruction. Ironically, there are proposals to clear a coniferous forest in Caithness created in the 1980s under that regime – to make room for a huge windfarm!6 The landowner is always the winner in our madcap economy.

(1) NAO: Press Release – Department of Trade and Industry: Renewable Energy (11/02/2005)

(2) NAO: Press Release – Department of Trade and Industry: Renewable Energy (11/02/2005)

(3) The Scotsman: 25/02/2005

(4) The Scotsman: 25/02/2005

(5) Dunoon Observer: News Archive (01/12/2006)

(6) John 0′ Groat Journal: 16/02/2007