With GST looming on the horizon for Guernsey, some people are still in pursuit of alternatives that could plug the island’s financial deficit while funding our public services.
Some of the candidates vying for a seat in the next States believe the money could be made by realising our renewable energy sources.
A wind farm is the most commonly cited example in the 82 manifestos available for perusal.
Express has been analysing what the candidates are saying – and what could happen if their ideas come to fruition.
Manifestos
82 individuals are standing for election and 32 of them outright mention a wind farm in their manifesto.
They all mention it positively as a possible or definite financial attribute that the States needs to get behind.
This list includes, unsurprisingly, GST opponents Deputies Carl Meerveld, Chris Blin, and John Dyke, who, along with Deputy Lindsay de Sausmarez led on the recent States work streams regarding a wind farm.
Others, including current deputies and new candidates, also express an interest in exploring the potential of a wind farm – or solar or tidal energy sources – as an alternative to the looming introduction of GST which is due to come in as part of a wider package of changes to tax and social security systems from July 2027.
Current Deputy Aidan Matthews wrote in his manifesto that “preventing the need for GST is a priority but may not be possible”. He further wrote that “we can move forwards with renewable energy generation, through offshore wind which shows real promise of delivering results and revenue earnings”.
Deputy Liam McKenna wrote in his manifesto that “Guernsey’s powerful 10-metre tides offer world-class potential for tidal energy development”.
“A strategic investment in renewable energy—particularly tidal and wind—can create jobs, generate revenue, and drive innovation without burdening the taxpayer.”
Deputy Sue Aldwell agrees that renewable energy sources can help fund Guernsey’s public services, but she thinks that’s a solution for the future, not for now.
“Corporate Tax has always been part of any solution, more recently an offshore windfarm may help in the future, possibly in ten years’ time which would certainly be welcome. At present however, we are spending more than we are earning, and we need to face that today.”
Looking further in to the future, Deputy Aldwell does believe that if GST+ comes in during the next few years, then it could be removed once a wind farm is up and running and earning.
“Guernsey had a purchase tax after the war, and when the island got back on its feet, it was subsequently removed. If the offshore wind farm were to become a reality, then the consumption tax could possibly be removed.”
First time candidate Rob Curgenven believes a wind farm will not only aid the island’s finances, but it could replace GST+ and it could help the wider economy by creating jobs.
“Continue on with the wind farm project,” he wrote in his manifesto.
“Leasing just 6 % of our territorial waters for an offshore-wind concession returns around £40 million a year (equivalent to a 5 % ‘GST Plus’). This is also set to create up to 200 new jobs.”
Many of the candidates are using a wind farm not as a golden ticket to solve Guernsey’s financial problems – but to aid our green credentials.
Current Deputy Sasha Kazantseva-Miller wants to “advance the energy transition by supporting offshore and onshore wind for greater energy independence” while Deputy Chris Le Tissier’s manifesto says “regardless of your views on climate change, our priority must be affordable, reliable electricity via cable, on‐island generation, wind, or solar—whichever is cheapest.”
New candidate Lexi Lundberg’s manifesto includes a pledge to advance “renewable energy sources such as wind, tidal, and solar to achieve carbon-neutral objectives by 2050”.
Forward Guernsey/Future Guernsey
Each of the six candidates standing under the Forward Guernsey party are supporting efforts to accelerate the completion of an offshore wind farm.
The political party’s joint manifesto pledges says this will “generate new revenues, improve energy security, create high paying jobs, and deliver cheaper energy”.
Forward Guernsey’s candidates are backing in full the manifesto produced by political campaign group Future Guernsey.
Future Guernsey says it does not support GST+ in its current form.
It wants to work with Jersey to amend corporate tax rates, and it is also keen to explore renewable energy sources as a revenue raiser as well as adding to Guernsey’s green credentials.
“Accelerating the completion of an offshore wind farm, that will generate new revenues, improve energy security, create high- paying jobs and deliver cheaper energy” – Future Guernsey’s manifesto.
Money talks
Those candidates who are talking about renewable energy seem unanimous in extolling its green virtues, as well as its possible financial benefits for the island.
Figures bandied about suggesting it could raise anything from 10s to 100s of millions of pounds per year for Guernsey’s public purse.
If the higher predictions are true then the island’s current financial problems would be well in the rear view mirror.
It is accepted that any financial wind fall from a wind farm is a way off though.
In the short term, there could be a few million coming our way if the island were to sign any contracts giving a developer an option on the sea bed.
Deputy Carl Meerveld has been one of the most vocal proponents of a wind farm off Guernsey and he described it in his manifesto as “the single most impactful and beneficial opportunity I wish to focus on getting done in the next term”.
He claims that developing all of the land available for use as a wind farm could generate more than £150m – three times that which a goods and services tax will earn for the island annually.
“Assuming we develop the full 610 km² that experts initially identified as potential wind farm sites, the estimated annual base-case lease revenue is over £150 million, with an optimistic estimate more than double that amount. With expectations of receiving initial revenue in 2027, before the planned introduction of GST. The policy letter did not mention the potential corporate tax revenue, which could be even more than the lease payments, and only alluded to revenue generated by activities associated with the wind farm development, potentially adding millions to government revenue per year.
“By comparison, a 5% GST would raise approximately £50 million in net revenue annually, and a 10% increase in income tax would raise around £28 million. Therefore, a large-scale wind farm could generate around double the revenue of a 5% GST and a 10% increase in income tax combined!”
“We must move decisively, and at pace, to complete the groundwork and begin delivery. I am determined that Guernsey captures the benefits of offshore wind” – Deputy Chris Blin’s manifesto.
Deputy Chris Blin has chaired the Offshore Wind Sub-Committee during the current term of office.
He describes the “bold renewable energy initiative for Guernsey” as a means of assuring “substantial future revenue and economic diversification through seabed leasing”.
“To clarify, simply leasing less than 10% of our seabed on our 6-12nm area could generate £40m per annum in revenues (Source: gov.gg/offshorewind – Net Present Value – NPV).”
Speaking in more detail, Deputy Blin said the economic potential of leasing part of our seabed to a wind developer would be a “key economic enabler” for the island.
He believes it would “diversify our economy, create skilled jobs, and stabilise future energy costs”.
“Assuming we develop the full 610 km² of viable seabed. Based on independent experts’ calculations, the lease income could be over £150 million a year, around twice the revenue of a 5 % GST and a 10 % rise in income tax combined,” Deputy Blin explains.
He also said it would help “accelerate our journey toward decarbonisation and a cleaner, greener Guernsey”.
Deputy John Dyke is another election candidate who sat on the Offshore Wind Sub-Committee.
He also extols the potential positives of a wind farm in his manifesto. As well as generating revenue, he focused on the environment.
“We need to continue to reduce our energy consumption and generally become more sustainable, but only in a gradual, economic way that does not push up energy prices and electricity bills. Net zero is probably unachievable. We should not try to push ahead on that whilst 80% of the world economy is still using fossil fuels with no intention of stopping.
“Our big contribution to clean energy will be to push forward with plans to lease our seabed for wind farm installation. The plans will not involve us taking on economic risk: they will only involve acting as lessor of our seabed to others who will take on the building project and enter into the relevant contracts with the UK or France. The planning on this has advanced well and must be pursued.”
Where we’re at
In April this year, the current States voted unanimously to “further examine offshore wind potential” for the island.
This means the island is investing a further £1.3m during the next two years to develop a framework that could facilitate the island receiving substantial financial returns from an offshore windfarm developer.
It also sets out the case for the establishment of a delivery entity to take the work forward as an arm’s length body with appropriate political oversight.
The work of the sub-committee has so far suggested that the most suitable option is based on a single sample site in Guernsey’s territorial sea, which has been the subject of technical research. It is based on a site area of 157km sq, with installed capacity of 1.27GW and with a high but feasible energy density of around 8MW/km sq.
“Reasonable base case assumptions suggest a developer would achieve significantly greater returns than required to cover their costs,” explained P&R.
“The Net Present Value (how much an asset is worth throughout its lifetime) of such a windfarm could be on the order of £300m according to initial modelling – which could be shared between a private developer and the States of Guernsey as an upfront payment. The precise mechanism for sharing this would be subject to commercial negotiation. On a deferred basis this could be up to a total of £1,300m over a 35-year contract, with payment shared with the developer taken annually, subject to commercial negotiation.
“While this is a reasonable base case, there is a significant potential range for this valuation due to the sensitivity of the assumptions, particularly price and investor expectations. The base case valuation is £300m but could range to high cases of £707m.”
Policy and Resources cautioned that “a more accurate picture can only be gained via more work, which is why the Committee is proposing further exploratory investment”.
That was supported by the States and will continue under the next States elected next week.