The offshore wind industry has warmly welcomed plans announced by the Department for Business, Industry and industrial Strategy that Contracts for Difference auctions will be held every two years for ‘less established’ technologies – largely offshore wind and wind farms on remote islands, with the allocation round for such technologies “by May 2019”.
Energy and clean growth minister Claire Perry promised that the government will hold another allocation round in 2021 and auctions around every two years. The government is holding firm to a promise to provide £557 million of support from consumer bills. The minister said, “Depending on the price achieved, these auctions will deliver 1-2GW of offshore wind each year in the 2020s.”
RenewableUK chief executive Hugh McNeal, said: “This is a ringing endorsement by government of the UK’s world-leading offshore wind industry and its ability to deliver for consumers, businesses and British industry. Boosting our ambitions for offshore wind is win-win for consumers, as the industry’s success at cutting costs mean that offshore wind is now one of the cheapest options for new power in the UK.
“Today’s announcement confirming the budget and timing of new auctions, sets us on the path do deliver the tens of billions of pounds of investment that will be needed to meet our ambition of at least 30GW by 2030. This is good news for domestic supply chain which can look forward to a pipeline of new offshore wind projects that will support tens of thousands of jobs across the UK.”
Sir John Armitt, chair of the National Infrastructure Commission, went further, saying: “I welcome today’s announcement from the Government of a long-term pipeline of support for offshore wind, helping to give investors confidence in the market and to maintain the UK’s leading position in this field.
“But if renewables are to make up at least 50 per cent of our energy mix by 2030, I would urge ministers to go even further and extend this support to other technologies including onshore wind and solar power.”
Clark MacFarlane, managing director of Siemens Gamesa Renewable Energy UK said: “A regular commitment to auctions and higher deployment is exactly what the supply chain needs to consolidate today’s jobs and plan for the future ones.”
Matthew Wright, UK managing director of Ørsted, said: “Through Contracts for Difference, the industry has slashed its costs, led by projects like Hornsea Project Two, which recently won an auction at the lowest ever price for offshore wind in the UK, halving the auction prices seen just two and a half years earlier. The benefits of offshore wind are already being realised in coastal regions such as the Humber, where the industry has brought new skilled job prospects, opportunities for businesses and millions of pounds worth of community funding.”
Danielle Lane, UK country manager for Vattenfall said: “Providing visibility of future auctions will help support investment in clean growth and further drive down the cost of offshore wind. Vattenfall has invested around £3.5 billion in UK wind since we entered the market in 2008 and the government’s announcement will help us to deliver jobs and growth around Britain in line with our purpose to power climate smarter living”
MHI Vestas offshore wind chief executive, Philippe Kavafyan, said: “Through our involvement with Blyth Offshore Wind Park and other pioneering projects, MHI Vestas is committed to UK offshore wind expansion and innovation. With our local blade manufacturing on the Isle of Wight already providing exports, this announcement is welcome news as MHI Vestas stands ready to expand our industrial footprint.”