Chapter 4: North, South and Nimbys

Introduction

In Britain today, the total capacity of wind farms is about 30GW. If you look at a map of British wind farms, it's likely the first observations you'll have are:

• The North Sea is dominant: About 50% (15GW) of wind capacity is offshore, three-quarters (12GW) of which is in the North Sea.
• Scotland is covered with windfarms: About 30% (10GW) of wind capacity is onshore and in Scotland.

It's tempting to think this is a rational and logical distribution. After all:

• The North Sea makes sense It's much easier to build wind turbines offshore in the North Sea than elsewhere. It's incredibly shallow; it's only 15-30 metres deep 80-125 miles from the coast at Dogger Bank. North Sea oil and gas has been exploited for 60 years; it's well mapped and there are many ports on the east coast with the infrastructure and facilities to construct and maintain the infrastructure. It's also adjacent to major energy trading partners and power grids in Germany, Nordics (Denmark/Norway), the Netherlands/Belgium; whereas the west coast only borders Ireland.
• Scotland is wild and windy Scotland has 8 times fewer people per square mile than England (70 vs 1,100 people per square mile). Land costs are dramatically lower too - agricultural land in Scotland averages around £4,000 per acre compared to £10,000-15,000 per acre in much of England, with prime farmland in the South East reaching £20,000+ per acre.

However, politics is as influential as climate and economics. Understanding why this distribution exists requires examining both the historical development of Britain's energy system and the political decisions that have shaped it.

The Historical Context

If you start studying or working in the British energy market today, there's little to formally distinguish the energy system in Scotland from the rest of England and Wales. It's part of the same wholesale market, retail consumers north and south of the border choose between the same suppliers. Regulation on competition is identical. Taxes are the same. And while the Scottish Government is devolved some powers in the energy space, which it has used to permit more onshore wind development in the planning system and offer more generous support for heat pumps and insulation over the years compared with Westminster administrations, this understanding misses key historical aspects.

History lessons can often be a bit boring, and many younger readers may be questioning why reading about what went on in the 1980s and 1990s might seem irrelevant. But we need to set the scene: Scotland and the Highlands in particular are absolutely front and center of the decarbonisation strategy that the UK is taking. The central challenge of our electricity system over the next 10-20 years is to deliver ever-increasing, affordable and reliable supplies of wind energy, managed intelligently and flexibly with modern technology from north to south. Understanding why this is such a challenge requires going back to how the system was originally designed, and what the institutional and political frictions are as well as those of physical geography.

In England, the electricity grid started as private (or municipal) undertakings in major cities in the late 19th century, with coal power stations built to serve nearby factories and housing. The first National Grid wasn't built until the 1920s/30s. Even then, it didn't extend north of central Scotland (Glasgow and Edinburgh). Electricity in the north of Scotland followed later, and focussed more at localised hydro schemes, where the region's unique geography and population density compared to the rest of the country created a radically different grid setup. However, after 1945 the electricity systems were largely separated and given different structures. In England, all the power stations (generators) were grouped together with the transmission grid, with separate regional electricity companies doing the local distribution and retail to end consumers. In Scotland, two vertically integrated companies were created to cover north and south Scotland, both spanning everything from generating power to retail. There was a small amount of capacity between Central Scotland and Northern England to move electricity north or south, but these links were not radically expanded over the decades even as electricity usage grew.

Fast forwarding to the privatisation of the 1990s, and the model adopted reflected the setup in England and Wales, rather than Scotland. Whereas in England there had long been a distinction between the transmission grid (which became National Grid) and siloed regional distribution grids, in Scotland such barriers were less distinct. In very rural areas, it didn't make sense to have distinct organisations strictly focussed at different voltage levels because the distances between settlements were so great and the population density so low that maintaining separate transmission and distribution networks would have been economically inefficient. Scotland was also more self-sufficient and contained, it wasn't as important to the national generation strategy. It would have been considered quite strange to try and transmit large amounts of electricity from the Highlands all the way to the south of England when there was so much coal generation capacity already located in the industrial heartlands of the Midlands and South.

Forcing Retail Competition on Scotland

The vertically integrated Scottish electricity companies had powerful brands. Not only did they generate and transmit/distribute electricity, but in rural areas without gas supplies, storage heaters were supplied and maintained by the electricity companies with special tariffs and widespread use of remote controlled charging. The Scottish electricity companies also had powerful retail brands, with high street shops and a local (nationalist) identity. Even British Gas identifies itself as Scottish Gas north of the border. Even when customers were allowed to choose a supplier in Scotland after 1998, far fewer chose to switch than in England. And companies with origins south of the border found it much harder to win customers in Scotland.

Merging wholesale markets

For 15 years after initial privatisations, Scotland remained outside the wholesale market for England and Wales. It only fully joined in 2005, 15 years later than the rest of England and Wales. The Scottish market remained dominated by the two vertically integrated electricity companies and wholesale prices were regulated. In a market as small as Scotland, it was deemed there simply wasn't enough competition to rely on a free market to set prices, and there wasn't enough transmission capacity with England to be part of that much larger market.

Prices in Scotland remained higher, despite which Scotland never saw the same "dash for gas" that took hold south of the border, in part because without a liquid private market, it was more difficult for developers to privately finance such developments. Over time, it became clear the same impediment would limit the development of Scotland's increasingly abundant wind resources, which needed access to markets south of the border.

NIMBYism and the Onshore Wind Ban

Since the first onshore wind farm in Britain was built in Delabole, Cornwall in 1991, some local residents have been reluctant to accept wind farms. Interestingly, much of the opposition to the Delabole project focused on noise abatement; today, visual disturbance tends to be the top concern, along with construction traffic and disruption.

Wind farms are relatively unique in Britain for bringing into conflict two quite different groups of stakeholders. On the one hand, you have the developers; typically working-age urbanites who are highly educated and strongly focused on national and international climate challenges and supply chains. On the other hand, you have local communities with a more diverse age range, including many retired and non-working groups, for most of whom their home represents their largest financial asset or pool of savings.

As Britain has a national grid with uniform pricing, there are no automatic bill savings for communities located close to wind farms. With the recent rejection of regional (and zonal) pricing; this looks set to remain the case for the large part; however there are ways for groups of energy users and generators to use the same energy supplier and primary substation in order to avoid some grid levies for electricity.

Given how complex the planning and engineering can be, if a developer or operator of a wind farm disturbs the day-to-day life of local communities, getting recourse or compensation through legal means against a large private company is likely to be too intimidating for most local communities, even if they can organize together.

The center right (i.e. the Conservative party) of British politics has long harboured a scepticism for wind and solar, and despite the need for state financial support has preferred nuclear energy. Following their return to office in 2010 and coupled with the rapid expansion of onshore wind farms in conservative leaning rural districts, the Government in 2015 effectively banned any new onshore wind in England (QUESTION: through what mechanism? For instance, a single objection can halt the planning process?). In Wales, Scotland and Northern Ireland the decision was taken by their respective Governments to continue with onshore wind. The decision in England was a mistake which was particularly profound because of the lack of mitigation for the consequences:

1. Connect and manage - Britain took the view that it was acceptable for wind developers to build projects in areas that were poorly served by the national and local distribution grids. This meant a lack of coordination between projects being built and the local grid being upgraded to accommodate them. When the two weren't in sync, the result was—and continues to be—that wind farms are compensated for being turned off (or down), which now costs £3-4 billion per year.

Had more wind farms been built in areas like Devon/Cornwall and the Pennines, there would have been fewer grid problems because the biggest constraints are north/south, especially across the Scottish border. Additionally, because demand would be closer to generation, there would also be smaller losses in transporting electricity long distances through cables. The current concentration of wind farms in Scotland and the North Sea creates a bottleneck where power has to flow south through limited transmission capacity, while England's southern regions remain heavily dependent on imported electricity, both from abroad and further north.

2. Unequal jobs/benefits - Much of rural England struggles for quality, year-round jobs. By forcing more of the onshore wind North of the Border, the Conservative Government robbed deprived parts of the Westcountry, Pennines, Northumbria, and other windy regions of England that could have benefited from wind farm development. This is particularly problematic because the windiest parts of England tend to be the poorest and most isolated—areas like Cornwall, the Pennines, Northumberland, and parts of Yorkshire. These regions are typically:
   • Further from major cities and economic hubs
   • Lacking high-quality arable farmland (often only suitable for sheep farming or marginal agriculture)
   • Struggling with depopulation and limited employment opportunities
   • In need of economic development and infrastructure investment

Wind farms could have provided these communities with construction jobs, ongoing maintenance work, and annual payments to landowners—often the only significant income some of these areas see. Instead, these benefits were concentrated in Scotland, leaving England's windy but economically deprived regions without this potential lifeline.

In contrast, many parts of rural Scotland have attracted large numbers of engineers—both working for the onshore wind developments and for the grid infrastructure that facilitates them. Having a year-round job with significant training and investment from a large employer is often difficult to find in rural areas, but can offer a much more stable quality of living to many rural people of working age. These skilled positions provide not just employment, but career development opportunities that are rare in isolated rural communities.

By keeping and indeed attracting new people of working age to an area, this sort of development also helps to preserve other parts of the social fabric such as keeping schools, shops, pubs, and medical facilities open. Rural depopulation is a vicious cycle—as young people leave for better opportunities elsewhere, local services close, making the area even less attractive to families and businesses. Wind farm development can break this cycle by providing stable, well-paid employment that allows people to stay in their communities and support local services. Energy related jobs also enable people to finance mortgages and buy homes in rural areas. Without stable employment, many rural communities become dominated by second homes, holiday lets, and retirees, with few young families able to put down roots. Wind farm development creates the economic foundation that allows working-age people to build lives in rural communities rather than being forced to move to cities for employment opportunities.

This creates a chicken and egg problem: because there are few working-age people in rural areas to advocate for economic development and renewable infrastructure, local politics becomes dominated by older, close to retirement and retired people. These residents typically have less focus on economic development—especially job market expansion—and more focus on preserving the asset value of their homes and maintaining the "character" of their communities. Older residents naturally focus more on the short-term disruption of construction rather than any longer term benefits. This political dynamic makes it even harder to attract the very development that could bring working-age people back, creating a self-reinforcing cycle of rural decline.

This represents a clear tragedy of the commons failure: while each local community rationally seeks to avoid hosting renewable energy infrastructure (to preserve views, property values, and local character), the collective result is a suboptimally low amount of renewable energy deployment nationally. Without national coordination and the ability to force through renewable infrastructure projects, Britain will continue to fall short of its climate targets and energy security needs, while individual communities remain trapped in cycles of economic decline and political opposition to the very development that could help them.

Marriage of Mutual Convenience

Now fully part, at least financially of the GB power market, investment in power generation in Scotland has boomed in the last 20 years. The two major renewables support schemes (ROCs and CfDs) collect revenues a bit like taxes but instead as levies on electricity bills across Great Britain (England, Wales and Scotland). The legal guarantee of these subsidies or support is the key to unlocking private finance that then pays the substantial upfront cost of building the windfarms (and the associated grid infrastructure). Given the focus on wind energy within the renewables push, even back in 2010 it was obvious that Scotland was always going to punch above its weight in the national generation mix. After all, Scotland only has about 10% of the UK's population. However, particularly with the onshore wind ban in England in 2015, this only accelerated Scotland's role as Britain's renewable energy powerhouse.

This has created a situation where Scotland receives substantial renewable energy investment financed by British electricity consumers, while the economic benefits - jobs, business rates, infrastructure investment, and community development - are concentrated in Scottish communities. The onshore wind ban in England has effectively made Scotland the primary beneficiary of Britain's renewable energy push.

What has emerged is an asymmetric relationship. Scottish renewables projects are financed through levies on electricity bills across Great Britain, meaning Scottish consumers do contribute to the costs - but with Scotland representing only about 10% of Britain's population, their contribution is proportionally much smaller than the benefits they receive. Scotland gets the lion's share of investment in new infrastructure, jobs, tax revenues, and substantial business rates from renewable energy projects. For example, Highland Council alone receives over £20 million annually in business rates from renewable energy projects, with some individual wind farms contributing £500,000-£1 million each year to local council coffers. With a population of just over 235,000 people, this represents around £85 per person annually in additional council revenue from renewable energy - a significant boost for one of Britain's most sparsely populated and economically challenged regions.

It's a bit like all British bill payers (including Scots) agreeing to a debt repayment surcharge on their electricity bills to concentrate energy infrastructure projects in Scotland. While Scottish consumers pay the same levies as everyone else, they represent only about 10% of the total contributions but receive a much larger share of the local economic benefits. The costs are spread across 67 million people, but the local economic benefits - the new infrastructure, the jobs, the business rates, the economic development - are concentrated in areas with just a fraction of that population.

However, the size and scale of the investment would likely not have been possible in a country the size of Scotland on its own. Having access to the capital markets of the City of London and sterling currency are equally essential to Scotland's renewable energy boom. Had Scotland (as it nearly did) voted for independence in 2014, or during a later schism post-Brexit, unpicking the long-term contracts and arrangements in the electricity infrastructure would have been one of many thorny issues that would have had to have been negotiated. The complex web of CfD contracts, transmission agreements, and cross-border electricity trading arrangements would have created a legal and financial nightmare for both sides.

In addition to pushing the investment north, this concentration also requires more infrastructure to bring the energy 500 miles south to where most of the demand is located. This in turn adds costs and complexity to the grid, increases transmission losses, and creates more political tension from NIMBY opposition to new pylons and transmission lines. The very communities that rejected local wind farms are now being asked to accept massive new transmission infrastructure to bring Scottish wind power to southern markets.

Transmission losses over such distances are significant - typically 2-3% per 100 miles for high-voltage AC transmission, meaning 10-15% of the energy generated in Scotland is lost before it reaches southern markets. Even with modern high-voltage DC transmission used on undersea bootstrap cables (which has lower losses of around 1-2% per 100 miles), the 500-mile journey from the Highlands to London still results in 5-10% energy losses. These losses represent not just wasted energy, but also increased costs that are ultimately borne by all British electricity consumers.

Such a dynamic was always going to happen to some extent between urban and rural areas - cities need energy but can't host large-scale renewable projects, while rural areas have the space and resources but limited local demand. However, the onshore wind ban in England has exacerbated this natural tension by forcing a significant portion of the development into Scotland rather than allowing for a more balanced distribution across Britain's rural areas.

This highlights a fundamental tension in Britain's energy system that was recently exposed by the rejected consideration of zonal electricity pricing. The proposal would have created different electricity prices in different regions based on local supply and demand, which would have made electricity cheaper in Scotland (where there's abundant wind generation) and more expensive in southern England (where there's high demand but limited local generation). The rejection of this proposal shows how politically difficult it is to address the geographic imbalances that the current subsidy system has created - where Scottish communities benefit from renewable energy development while English and Welsh consumers pay the bills, but any attempt to reflect these real costs and benefits in pricing is politically unpalatable.

UK Diversification

When learning about investment portfolios, one of the first lessons you learn is to reduce risk by diversifying. Certain assets decline while others rise, smoothing out overall returns. There's a direct parallel with the distribution and location of wind farms around the UK.

While some areas are outright windier than others (Scotland vs. the South East), the real benefit comes from geographic diversification. Not just that, but often when it's windy in one part of the country, it's less windy elsewhere. Much of our weather consists of fronts emerging from the North Atlantic. Often these hit the northern part of Britain (e.g., Scotland) harder, occasionally the south. Sometimes these fronts hit the UK at a different angle, tracking from the south-west, west, or north-west. And because wind speeds tend to be strongest around the line of the weather front, there is almost always a timing lag between a weather front hitting one part of the UK and the other.

Some weather systems move from west to east, others from south-west to north-east, creating complex patterns where wind generation varies significantly across different regions at different times. This geographic and temporal variation means that a well-distributed portfolio of wind farms across Britain would provide much more stable and predictable generation than concentrating all capacity in just a few areas.

The current concentration of wind farms in Scotland and the North Sea creates a "single point of failure" problem. When weather conditions are unfavourable in those regions (which can happen for days or even weeks during certain seasons), Britain's renewable generation drops dramatically. A diversified portfolio would include more:

• Coastal wind farms in Cornwall, Devon, Wales and Western Scotland (exposed to Atlantic weather systems)
• Upland wind farms in the Pennines and Northumberland (benefiting from orographic effects - where wind is forced upward by hills and mountains, creating higher wind speeds and more consistent generation)
• Southern and eastern wind farms (catching different weather patterns, especially in the Channel)

This diversification would reduce the volatility of renewable generation, decrease the need for expensive backup generation, and improve Britain's overall energy security. The onshore wind ban in England has prevented this diversification, leaving Britain's renewable energy portfolio dangerously concentrated and vulnerable to regional weather variations.

European Diversification

Even with a diversified UK portfolio of wind and solar assets, the UK remains a relatively small country with a relatively confined climate. Having access to trade electricity with the wider continent allows the UK to benefit from changes in weather patterns over a much larger area, exporting at times of surplus and importing surpluses elsewhere at times of scarcity back home. As noted in Chapter 16, Brexit has introduced extra friction to short-term electricity trading of the sort which is particularly helpful in balancing renewables. However, the construction of 5 new interconnectors since 2016 has thankfully still occurred despite these challenges.

Fastforward to 2025

Taking its history into context, the challenges of making Scotland the center piece or mecca of our energy system today, as we are trying to make it, are enormous. Political history lessons can be boring and sometimes seem a bit irrelevant, but it's quite important to understand just how much of a challenge or strain we're putting on infrastructure and organisational arrangements that simply weren't set up for the top-heavy, wind generation-focused system in the north of Scotland that we are hoping to now get from our electricity system.

Until quite recently, the Highlands and Scotland were basically a backwater - or a sideshow that was never conceived of or properly integrated into Britain's main electricity and energy system. The grid was designed around serving the industrial heartlands of England, with Scotland's hydro schemes and later nuclear plants providing supplementary generation rather than being central to the national strategy. The idea that Scotland would become the powerhouse of Britain's renewable energy system would have seemed absurd to the engineers and planners who built the original grid infrastructure.

Getting electricity from the Highlands to Southern England is, a bit like the equivalent road/rail journey, a tortuous process from the perspective of both physical and institutional geography. It requires transmitting electricity through assets owned three different transmission companies (SSE, Scottish Power, and National Grid). Indeed, if the generation project is connected at lower voltage, it may also involve the entirely (separate) distribution part of SSE. That's a large number of stakeholders, each of which has to be separately managed and regulated. Each of these companies has different perspectives, cultures, and financial objectives. If an investment fails to work out, it's much harder to hold any particular organisation accountable. Indeed, it's arguably simpler to bring power from the near continent (France, Belgium, Netherlands) to the South East of England, and when you look at the flows this is exactly what happens much of the time.

This fragmentation raises the question of whether Britain might need to consider merging or reorganising its grid further - beyond the National Energy System Operator (NESO) that the government recently created. While the creation of NESO was a step toward better coordination, the fundamental problem of multiple transmission companies with different objectives and regulatory frameworks remains. A truly unified transmission system might be necessary to efficiently manage the north-south flows that Scotland's renewable energy boom requires.

Unexplored Solutions

The extent of the transmission gap between the north of Scotland, the Central belt and the rest of England and Wales is finally being addressed. While the continued growth of renewables continues to put more strain and set higher standards or move the goal posts up, by the 2030s it's expected that many of the current issues will be in the past assuming that grid upgrades go ahead as planned and expected. Other accelerations such as the growth in grid scale battery storage and smart grid technology could also have a rapid impact on what remains quite an unsophisticated and unmanaged grid today.

That said there are a number of other levers which with correct coordination the respective parts of government could start to accelerate in a way that might receive political consent and mitigate or at least buy time for the parts of the system which are struggling to expand the transmission grid.

For example, the frequent surplus of electricity which Scotland faces today could be addressed by an acceleration or concentration of the growth of new demands for electricity there over the south of England. Ruling out zonal or nodal pricing removed an important market signal which could have achieved this automatically however there remain policy levers which could affect this over time:

1. Data centres - Despite higher land prices in the south of England, data centre developers overwhelmingly choose locations around London and the M4 corridor. While not every computing workload is suitable for northern locations, the planning system could actively encourage data centre projects further north by streamlining application processes and reducing bureaucratic complexity. A similar argument could be made for other electricity intensive forms of industry, including manufacturing.

2. Air source heat pumps - Scotland has historically provided more generous support for insulation and energy efficiency measures compared to England and Wales. Using Westminster funds, this support could be further extended to boost electricity demand in Scotland and reduce transmission constraints on the national grid.

3. Electric vehicles - EV incentives are currently identical across Scotland and the rest of Britain, with both offering £350 grants for home chargers and similar vehicle grants. This could be differentiated by exempting Scottish-registered vehicles from vehicle excise duty, or exempting Scottish EV chargers from VAT. These measures would accelerate EV adoption in Scotland and reduce transmission constraints caused by excess power generation in the north.

Summary

The concentration of Britain's renewable energy development in Scotland, driven by the 2015 onshore wind ban in England, has created a complex web of economic, political, and technical challenges. While Scotland benefits from substantial investment and job creation, the costs are spread across all British electricity consumers, creating an asymmetric relationship that is difficult to address politically. The resulting transmission constraints, energy losses, and lack of geographic diversification leave Britain's energy system vulnerable and inefficient. Addressing these challenges will require both technical solutions and political courage to overcome the NIMBY opposition that created this situation in the first place.