64 Britain The EconomistSeptember 21st 2019
2 Hull. “We could see there was volume com-
ing,” explains Clark MacFarlane, who runs
the company’s British business. Siemens
will build longer blades in Hull for Hornsea
Two, so more power can be generated from
fewer turbines, lowering installation costs.
The new turbines’ diameter will be 167 me-
tres, 40% wider than the London Eye.
The rest of the industry has matured,
too. Orsted, a Danish firm that is now the
world’s biggest offshore-wind developer,
cut its teeth in Britain. In 2014 it won con-
tracts to build three big wind farms, includ-
ing Hornsea One. “It allowed us to start in-
dustrialising the way we built,” says Henrik
Poulsen, the firm’s boss. Orsted made bulk
purchases of turbines and cables, and re-
fined each stage of development, from site
planning to maintenance.
By some measures, results have been a
big success. In the past decade offshore-
wind capacity in Britain has grown 20-fold,
meaning it now comprises a quarter of re-
newable generation. The lowest price se-
cured in the first round of auctions, in 2015,
was £114.39 ($142) per megawatt hour
(mwh). In 2017 the cheapest projects, in-
cluding Orsted’s Hornsea Two, won with
bids of just £57.50. The next contracts are
expected to be announced on September
20th. Other countries, including America
and Taiwan, now have their own plans for
offshore wind, benefiting from the exper-
tise that companies honed in Britain.
Even so, big questions loom. In March
the government announced an agreement
with the offshore-wind industry that it
hopes will amplify its economic impact.
The government will hold auctions every
two years. In return, it said, “we expect the
sector to continue cutting costs, commit-
ting to lower their impact on bill-payers,
while investing in and driving growth in
the uk’s manufacturing base.”
Offshore wind has produced factory
jobs, as at the plant in Hull. But it is not
clear that creating British manufacturing
jobs advances the aim to lower power
prices, given Britain’s relatively high la-
bour costs. Richard Howard of Aurora En-ergy Research, an analytics firm, points out
that the country has expertise in building
and servicing wind farms, as well as ex-
ploring technical problems through re-
search. Britain “doesn’t tend to have a com-
parative advantage in making things—it
tends to have a comparative advantage in
making knowledge.”
The debate over costs may escalate, too.
In 2017 Dieter Helm of Oxford University
wrote a scathing review of Britain’s energy
market, pointing out that consumers were
paying high prices even as the cost of re-
newables plunged. He named lengthy, gen-
erous offshore-wind contracts as a princi-
pal culprit. Orsted agreed to build Hornsea
One for £140 per mwh, about three times
today’s wholesale price. Last year environ-
mental policies accounted for a fifth of
consumers’ electricity bills, according to
Ofgem, the energy regulator. Mr Helm ar-
gues that an economy-wide carbon price
would help the country choose the cheap-
est power with the lowest emissions. In-
stead, he says, “we make those choices byprotecting different technologies.”
As Britain aims for net-zero, it must also
grapple with the broader challenge of bal-
ancing the grid. This year the Committee
on Climate Change suggested that offshore
wind capacity may reach a staggering 75gw
in 2050. That would require about 180 of to-
day’s biggest turbines to be installed in
each of the next 30 years. Generating that
much more power from intermittent
sources will need investment in technol-
ogy that does not yet exist, including bat-
teries that can store power for weeks.
The current state of the grid does not in-
spire confidence. Lightning strikes on Au-
gust 9th contributed to halting operations
at Hornsea One and a small gas plant, caus-
ing a power-cut. The blackout illuminated
broader problems in Britain’s electricity
system that will need to be resolved as it
tries to decarbonise. The government was
due to publish an energy white paper this
year to deal with such questions. Amid
broader political turmoil, the paper, like so
much else, has been put on hold. 7TailwindsSource:BloombergNEFCumulative offshore-wind capacity, gigawatts010203040502005 10 15 20 25 30ChinaBritainGermany
UnitedStatesDenmarkFORECASTJapanT
o the disappointmentofMolly,a
19-year-old at the University of Ports-
mouth, the Waterhole Bar is no more. “I
enjoyed pre-ing in there with friends,”
she sighs. “We’d get together, have a few
snakebites, get hyped.” Access was re-
stricted to students, meaning it felt safe.
Karaoke Fridays were fun. But students
were recently told the bar would be
replaced with a “vibrant, student-centred
and social-gathering space”.
In a pre-mobile-phone era, university
bars were a place to bump into people
you knew and enjoy cheap drinks. Brew-
ers sold booze at below cost price to getstudentshookedoncertainbrands. No
longer. Abertay, in Dundee, has also
closed its bar. Chester and Coventry have
transformed theirs into “events spaces”.
Many have already become places which
offer not just alcohol but also pizzas,
coffee and laptop charging, notes Jim
Dickinson of Wonkhe, a think-tank.
In the 2000s pubs began competing
harder for students’ custom, taking
business away from university bars. And
young people are drinking less. Three in
ten 16- to 24-year-olds are teetotal, up
from two in ten in 2005. Many of those
who indulge will pre-drink at a friend’s
flat, rather than a bar, before heading to a
club. To stroll through Portsmouth’s
campus in freshers week is to be bom-
barded with information about nights
out: Dirty Disco (drinks: £1.50, or $1.90),
Connection (“indie, retro and electro
alternative”) and the Eskimo Project
(“the club so big it requires 2 venues”).
Ben Archer, a third-year student,
stayed away from the Waterhole. “It was
quite grim, it didn’t smell great,” he
recalls. College bars were not the best
places to induct foreign students—who
make up 14% of undergraduates—into
British drinking culture. And the culture
has anyway been watered down, says Ian
Dunn, Coventry University’s provost.
“Students are more serious about study,”
he explains. “The library is full.”Tequilacrammers
Abstemious studentsPORTSMOUTH
Once the centre of campus life, university bars are calling timeSwots do shots