New edition on Policy Brief on wind farm

The Policy Centre has updated its comprehensive brief on the proposal for an offshore wind farm in the south-west of its territorial waters following the decision of the States Assembly that the issue should be pursued. Key points include -

• The wind farm would cost between £2 billion and £3 billion to build and would take about 10 years from approval to producing electricity.
• The role of the Jersey government would be to negotiate a leasing arrangement for the seabed with the operator and develop the appropriate financial arrangements, and policies in respect of planning, taxation and regulation.
• Most of the electricity generated by the wind farm would have to landed in France as it would not be feasible for Jersey to install the necessary infrastructure.
• A wind farm would increase Jersey’s resilience in respect of energy if it was an additional source of supply, as opposed to the only source, but a key question is whether Jersey Electricity would be obliged to buy electricity from the wind farm.
• The government has suggested that there could be a substantial tax benefit to Jersey from the profitable operation of the wind farm, but it is not certain how much of any profit would be taxable in Jersey.
• There would be significant indirect benefits to the Island economy from the construction of a wind farm, in particular through employment and hospitality requirements.

The brief suggests that n the short term a better understanding of, and clarity on, a few issues is needed –

• Is there an acceptance that the role of Jersey would be limited to leasing the seabed and agreeing financial arrangements, and that it would not seek to be an operator of the wind farm?
• Is there an acceptance that it is not feasible for there to be an onshore substation in Jersey and therefore most of the electricity would land in France not in Jersey?
• Would the government seek to require the wind farm operator to supply electricity at a fixed price to Jersey Electricity? Similarly, would it require Jersey Electricity to buy the bulk of its electricity from the wind farm?
• Over the last few years capital costs have risen while the wholesale price of wind energy has fallen. A brief analysis of the implications of these trends for the economic assumptions underlying the wind farm is needed.
• It would be helpful to have an initial analysis of the issues determining the jurisdiction in which various taxes would be liable to be paid.

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