Wind Power and Power Politics

International Perspectives

Peter Strachan, David Lal, David Toke

• Publisher: Taylor & Francis
• Year: 2009
• Print ISBN: 9780415961301
• eBook ISBN: 9781135898953
• Edition: 1
• Topic: Commerce
• Subtopic: Industrie de l'énergie

The aim of the book is to analyse the factors that have influenced wind power outcomes in a range of countries which have featured significant wind power deployment programmes. A central theme is the relationship between patterns of ownership and the outcomes. These flow from different social environments, but they are associated with different types of planning outcome and deployment rates. Grass roots ownership is more widespread than is commonly thought, although it is not a panacea for effective wind power programmes. Financial policies used to promote wind power also have important influences of the rates of deployment. However, what seems to be most important for wind power deployment is a double coincidence of widespread social support for wind power deployment and effective financial support systems for wind power.

1 Assessing National Patterns of Wind Ownership

Peter A. Strachan, David Toke, and David Lal

INTRODUCTION

Renewable energy sources including biomass, wave, tidal, solar, and wind power are near the top of European agendas for sustainable development. Cowell and Strachan (2007) note that renewable energy sources—wind power in particular—have an exalted position that is owed to a combination of factors. Concerns over ‘peak’ oil and security of energy, the economics and market for ‘green technologies’, and further climate change have all fuelled demands for renewable energy to make an ever-increasing contribution to the energy mix (Meyers 2007; Strachan et al. 2006).

In setting the international policy context for this book, one of the main motivations for the interest in renewable energy is that it offers countries a way of meeting their 2010 Kyoto obligations for reducing greenhouse gas emissions. Blok (2006) also notes the prospect of even more dramatic reductions in the years and decades to come. In Europe, the interest in renewable energies started back in 1996 with the publication of the Green Paper, Energy for the Future (CEC 1996), and in more recent years, European Union (EU) member-states have set ambitious targets for renewable energy. The EU has committed itself to increasing the contribution of renewable energy sources from the current 6 per cent to 12 per cent by 2010 (CEC 2001). Further, on 9 March 2007, European leaders committed the EU to generating some 20 per cent of its energy from renewable sources by 2020, with wind power having an elevated position (Cowell and Strachan 2007). The interest in wind power stems from the fact that it is currently the most technically and economically feasible option for supplying clean energy, as well as providing a strong basis for more sustainable or greener growth (Strachan and Lal, 2004).

If the market and environmental concerns propelling wind power are reasonably clear, what requires further explanation is the uneven progress of wind power deployment across and beyond the member states of the EU. This unevenness makes it an interesting laboratory for public policy and social science research. Further, in attracting social conflict and heightening debate about low-carbon alternatives, wind power raises important theoretical and policy-related concerns about target setting, instrument choice or support mechanisms, social acceptability, and, consequently, environmental governance. However, rigorous cross-national and theory-building renewable energy research is still in its infancy, with this book aiming to spark a more critical investigation of the factors affecting wind-power development, and to deepen possible policy and management lessons for future study. Such factors include financing and support mechanisms, and wind power and ‘the planning problem’ (Cowell 2007).

The financing and support mechanisms established to support wind power are widely identified as important factors influencing wind-power deployment. The key concern here is the extent to which governments offer subsidies to foster the growth of wind power, including importantly stable and favourable systems with long-term contracts. However, much of the energy—wind power in particular—literature has often been dominated by simplistic debates of the merits of feed-in tariffs which are deemed to be responsible for the expansion of wind power in Denmark, Germany, and Spain, and criticisms of renewable portfolio standards or quota systems that are commonly used in countries such as the United Kingdom.

A number of the chapters in this book, including Breukers (Chapter 3), Agterbosch (Chapter 4) and Ó Gallachóir et al. (Chapter 6), aim to move beyond such technical descriptions of the characteristics of policy instruments and support mechanisms and their respective claimed performance, and importantly investigate how a range of important factors influence the deployment of wind power in practice. The aforementioned contributors deal with a range of important factors, including the levels of political support and institutional arrangements; the market, planning, and regulatory environment; and social conditions, including the enthusiasm of key actors (e.g., corporate electricity companies and utilities, independent entrepreneurs, cooperatives, and local communities). On this latter point, Agterbosch (Chapter 4, this volume) states:

Not economic, but ideological arguments were decisive in the origin of the Dutch wind cooperatives. There were no national incentives in place when these organisations were set up. On the contrary, national social and institutional conditions. . . . were very much to their disadvantage. Despite these negative national conditions and despite limited organisational resources, such as finances and expertise, most cooperatives managed to implement one or a couple of wind turbines. This relative success depended on their own decisiveness and enthusiasm, combined with regional and local institutional regulatory and social conditions, such as the willingness at the side of the regional energy distributor to pay a proper compensation per kWh. Local social relations and short communication lines added to the implementation capacity of particular cooperatives.

Social resistance to wind-energy development is another factor that is widely identified as influencing deployment, leading many commentators, such as Breukers (Chapter 3, this volume) and Warren et al. (2005), to identify the planning system as a barrier that needs to be overcome. However, the planning process plays somewhat of a contradictory role in wind-power deployment. It also aims to resolve public and other social resistance to wind-power projects; balance the interests of key corporate, public, and other stakeholder groups; and minimize adverse environmental and other impacts where necessary. In illustrating these points, Breukers (Chapter 3, this volume) states:

In the early nineties, it became clear that municipalities in North Rhine Westphalia had difficulties in planning for wind power e.g. in balancing different interests, dealing with nature and landscape impact issues, and in aligning their plans with regional plans.

There has been significant opposition and, at times, organized resistance in various parts of the EU. Strachan and Lal (2004), for example, outline the position in the United Kingdom and, in particular, Scotland and identify the landscape and other sensory impacts of wind turbines, which have resulted in significant opposition. In Scotland and England, as well as a number of other EU member-states, such as The Netherlands and Germany, such opposition has led both governments and the business community to express concern about delays in the consents process and other barriers to the realization of wind-power projects (Toke 2005). Breukers (Chapter 3, this volume) further illustrates this point by stating: “Wind project developers in various (German) states were complaining about local permitting procedures, which they regarded as lengthy, inconsistent and complex.”

However, many of the chapters presented in this volume further reveal that member-states have used national energy policies and institutional planning structures to find a fairer or more acceptable distribution of locations. In some situations, central governments have funnelled national targets into preferred areas, or or left it to local government to identify the most acceptable locations for this technology. The Netherlands and later North Rhine–Westphalia (NRW) in Germany have adopted the former approach, but at times have met considerable resistance in doing so. Cowell (2007) also highlights a similarly emerging picture in the national context of Wales. However, Agterbosch and Breukers (Chapters 3 and 4 in this volume) also highlight a more bottom-up approach which seemed to work very effectively in Germany during the 1970s and 1980s, at least, and in doing so, a range of wider benefits have been realized. Breukers (Chapter 4) states that:

In North Rhine Westphalia, early wind energy policies—and not planning institutions—supported a practice of locally based project planning. A project development approach in which part of the local community was involved helped to garner local social acceptance and prevented the early rise of local opposition against wind projects.

While recognizing the importance of these factors, the key theme of this book centres around the issue of ‘wind ownership’ and how we conceptualize different ownership arrangements—by individuals, cooperatives, municipalities, and corporations—and the performance (including benefits and limitations) attached to different ownership arrangements. However, it would be inappropriate, as outlined above, to attempt to discuss ownership issues without fully considering financial and support mechanisms and the planning problem, as they are intricately intertwined. Hence, our broader interest in examining the political, corporate, and social dimensions of wind-power deployment more generally.

Commentators often portray a continuum from corporate ownership through to local ownership, where an important axiom of comparative policy commentary has been that smaller-scale, community, or locally owned wind turbines or farms provide a more effective means for expansion when compared to corporate ownership. This argument has been extrapolated from the experience of countries such as Denmark and Germany, where local ownership has been a critical feature of expansion, but this raises an interesting question: How far are the policies and strategies—and the social worlds which produced widespread local ownership in Denmark and Germany—replicable elsewhere?

The opposite view of ownership is one of a corporate-led wind-power industry which dominates in countries such as the United Kingdom, Spain, and the United States of America, with large corporations providing the finance and know-how to most effectively—or so it is argued—mainstream renewable sources into the energy mix. However, the issue of local ownership schemes and other community benefits has recently become of interest to both policy-makers and corporate interests in such countries, where wind-power expansion has been slower due to a combination of siting and planning issues and social acceptability problems.

The Department of Trade and Industry (DTI) Report, Community Benefits from Wind Power (2005), for example, recently identified that, in the absence of local ownership, other sorts of community benefits might accelerate the deployment of wind power. The DTI (2005: 6) states that such community benefits might include community fund contributions, community compensation, pre-approval contribution, local taxes, jobs, individual investments, and cooperative investments.

While ownership does appear to be an important issue, the following question, however, does arise in countries such as Ireland, the United Kingdom, and the United States: To what extent is ‘ownership’ actually central to the issues of public opposition and social acceptability to wind-farm developments?

THIS BOOK’S AIMS

It is against this backdrop that the threefold principal aims of this book are made manifest. The first is concerned with investigating and documenting examples of wind-farm ownership developments in different countries, particularly European countries where there has been significant growth in wind-power generating capacity in recent years. In particular, this book presents national case studies from Germany, Ireland, The Netherlands, Spain, and the United Kingdom. We have also commissioned a further chapter—on the United States—to provide a flavour for developments beyond Europe. Linked to the question of performance highlighted earlier, we attempt to address the following question: How can you account for national variations in wind-power deployment?

The second aim of this book is concerned with conceptualizing and documenting different types of ownership structures and then assessing the importance of other associated factors including support schemes, regulatory and planning structures, social and cultural conditions, and other factors, under which wind power is deployed. These key integrating factors will run through the presentation of the national cases and, in doing so, the prevalence, political and policy consequences, and advantages and disadvantages of corporate and local ownership will be examined. During the course of this book, a further research question which we attempt to address is: What impact do governmental support schemes, planning and regulatory structures, social and cultural conditions, and other factors have on wind-power deployment?

The final aim of this book is concerned with ascertaining what, if any, community benefits arise from corporate and local ownership schemes, the impact that ownership has on the rate of wind-power deployment in these countries, and whether the level or type of benefit might make a difference in planning consents and community acceptance, which has been identified as a key stumbling block.

Having now outlined the background and aims of this book, we provide an insight into corporate and local ownership definitions and patterns before providing a summary of the book’s chapters.

AN OVERVIEW OF OWNERSHIP AND ASSESSMENT OF NATIONAL PATTERNS

Strachan et al. (2006) indentify four types of corporate wind ownership around the world: (i) large utility companies and developers with a portfolio of generating capacity; (ii) independent wind farm developers; (iii) wind turbine manufacturers and companies involved in the supply of component parts, such as blades, gearboxes, and generators; and, (iv) companies providing specialist services. In Spain, the United Kingdom, and the United States the vast majority of wind farms are financed and constructed by large electricity suppliers and independent companies specializing in renewable energy. We refer to some of these companies in the country summary later in this chapter, and also in the main chapters in the book. However, it is useful to flag some interesting points. One interesting feature is the trend toward multinational concentration of wind-power ownership. In Europe, multinational links are being forged in the electricity industry. E.On, for example, has been active in buying up wind-power capacity in the United States, and also developing wind farms in the United Kingdom, although paradoxically, it owns practically no wind power in its German homebase, and even criticizes the German wind-power programme. Iberdrola, the leading Spanish electricity company (and owner of Spanish wind power), has bought up Scottish Power, which is a major British wind-power developer. Meanwhile, among the wind-generator manufacturers, Vestas based in Denmark has so far retained its position as an independent concern. It also retains its position as having the largest share of the world’s wind generator manufacturing market, and is followed in importance by GE Wind (United States), Enercon (Germany), and Gamesa (Spain).

However, the existence of significant trends toward local ownership in several countries is interesting given that the electricity industry is otherwise generally dominated by corporate and multinational ownership. Local ownership, or at least ownership that is independent of major traditional or investor-owned electricity companies, is common in Germany, Denmark, Ireland and The Netherlands.

Toke (2007) notes that ‘local ownership of wind power can mean several things’. Often, definitions focus on local cooperatives as the purest and most desirable form of ownership. Local wind farm cooperatives have most famously been implemented in Denmark, whereby the wind turbines are owned fully by local residents. Along with Denmark, wind-power cooperatives are also very common in Germany, and have been named ‘Burgerwindparks’. The method of financing and investing in such wind-power cooperatives does vary. In Denmark, for example, wind turbines have been financed primarily from equity capital, with no or little money borrowed from banks. The German ‘Burgerwindparks’ follow a more standard project financing method, with banks lending a large proportion of the required capital, but shareholders and other investors also playing an important role.

Toke (2007) notes, however, that ownership which falls outside the major electricity companies might also include nonlocal and noncommercial cooperatives and farmer ownership. First, examples of nonlocal ownership can be found occasionally in the United States, but particularly in Germany, where normally higher income earners invest in wind farms and earn a good return on their investment. Further, in The Netherlands, many wind-power cooperatives can perhaps be best described as ethical investor operations, where collections of private investors might or might not necessarily be local. It is interesting to note that commercial cooperatives in Germany might also be best described as ‘corporate-ownership’. Second-farmer ownership dominates in Denmark, where farmers own a limited liability company, sometimes in collaboration with other farmers. Such farmers tend to borrow the bulk of the money needed to finance the project f...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• List of Figures
• List of Tables
• List of Appendices
• Foreword
• 1. Assessing National Patterns of Wind Ownership
• 2. Wind-Power Outcomes: Myths and Reality
• 3. Local Social Acceptance through Local Involvement: The Case of Wind-Power Implementation North Rhine–Westphalia
• 4. The Wind-Power Market in the Netherlands: Assessing the Performance of Wind Cooperatives
• 5. Corporate Interests and Spanish Wind-Power Deployment
• 6. Wind-Energy Policy Development in Ireland: A Critical Analysis
• 7. Assessing the Performance of the UK Renewables Obligation: Cinderella or an Ugly Sister?
• 8. Gone with the Wind?: Prospects of Community-Owned Wind Energy in the United States
• 9. The Development of Wind Power in the Netherlands and Denmark: The Impact of Different Innovation Strategies and Policies
• Contributors