New Policy Brief on wind farm proposal

The Centre has published a new Policy Brief on the Government’s proposal for an offshore wind farm, which was announced on 17 October and on which a consultation has now commenced.

The proposal is for a wind farm off the south west coast of the Island, producing about six times the amount of electricity currently used in Jersey. The wind farm would cost several billion pounds to design and build and the intention is that it would be privately funded and built by companies that have substantial experience of similar developments elsewhere.

The consultation argues that for the Island there would be energy security, economic, tax income and environmental benefits. The brief analyses these aspects noting in particular that wind energy is unreliable and Jersey would need an alternative source of energy, that such a project would be risky and not guaranteed to bring financial benefits to the Island and that Jersey’s electricity, imported from France, is already carbon-free.

The brief notes that Jersey and Guernsey currently share responsibility for the import of electricity from France and that Guernsey wants to reduce its reliance on the cable link with Jersey. The wind farm would require detailed and difficult negotiations with Guernsey.

The brief examines the viability of the proposal, noting the huge size of the project and that Jersey would have to take the risk that that it would be able to sell surplus electricity at a profit. As a result of rising costs and falling prices a number of wind farm developments have recently been halted and the British Government has had to increase the maximum price it is prepared to pay for wind energy by 66%.

The brief suggests that in due course analysis will be needed on several issues including –

• What facilities will be required on-Island for the construction of the wind farm?
• Is it envisaged that Jersey would adopt the normal practice of agreeing in advance to buy all of the electricity produced by the wind farm at a fixed price?
• A sensitivity analysis of the potential profit/loss for different market prices.
• A realistic assessment of the market power of Jersey being able to sell surplus electricity.
• An analysis of the implications for the current arrangements with Guernsey, taking into account Guernsey’s new electricity strategy.
• An assessment of the alternative sources of energy for when wind power is not sufficient.
• An assessment of the cost of being the promoter, in particular conducting the auction or negotiating with one company.

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