The UK won’t meet its targets on renewable energy if offshore wind farm costs continue to spiral, the government has been warned. Centrica said the chance of making any money from wind farms being set up around the British coast were now only slim. Rising prices for raw materials, particularly steel and copper, had pushed up the prices being demanded by the handful of companies who make the giant turbines for the offshore fields. Centrica said it would continue with its plans for three UK wind farms but warned that the outlook was bleak. Sarwjit Sambhi, director of Centrica’s power business unit, said: ‘The economics at the moment make the returns marginal.’

Source: May, 2008. http://www.telegraph.co.uk/earth/earthnews/3341902…

Requirement:

• Would a critic be justified in saying that management accounting is holding back progress with developing renewable energy? (5 Marks) CLO 2
• What are non-accounting benefits of a wind farm that could be set against the accounting costs? (5 Marks) CLO 2
• Are there non-accounting costs of setting up a wind farm? (5 Marks) CLO 2