Blow to offshore wind industry after Government scheme flops completely

The UK’s growing renewable energy sector has been dealt a major blow after a scheme to grow offshore wind farms failed to attract a single bid.

The Government has confirmed that while a number of solar and onshore wind projects had won backing in the annual contracts for difference (CfD) auction, none of the offshore wind which is the backbone of the UK’s renewables system, had won a contract. Industry experts have warned that rising costs and supply chain issues means the price offered by the Government for energy generated on offshore wind farms was not sufficient to make new developments economically viable.

The lack of any new developments is a blow to companies, particularly along the North Sea coast, who have been hoping to take advantage of a boom in renewable energy. There are also fears that the lack of new offshore wind projects – which provide the cheapest form of power generation – could hit customer bills.

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After announcing 25 onshore wind projects, mostly in Scotland, 56 solar schemes and a number of tidal and geothermal schemes, the Government said that “significant numbers of solar power and onshore wind, and a record number of tidal energy schemes, have been awarded funding today.”

Energy and climate change minister Graham Stuart said: “Offshore wind is central to our ambitions to decarbonise our electricity supply and our ambition to build 50GW of offshore wind capacity by 2030, including up to 5GW of floating wind, remains firm. The UK installed 300 new turbines last year and we will work with industry to make sure we retain our global leadership in this vital technology.”

One industry source said: “There is no offshore wind and that’s the backbone of our transition to clean energy and attempts to stop using gas, which must be a worry for Government.”

And Labour’s Shadow Climate and Net Zero Secretary said: “Ministers were warned time and again that this would happen, but they did not listen. They simply don’t understand how to deliver the green sprint, and Rishi Sunak’s government is too weak and divided to deliver the clean power Britain needs.”

Each year the Government awards contracts to supply renewable electricity to British households for 15 years at a set price. By guaranteeing the price that a company will be paid for its electricity, it gives firms certainty that they will not go bankrupt should electricity prices fall, as well as keeping household bills lower than they would otherwise be if electricity prices soar.

This year offshore wind producers were allowed to bid at most £44 per megawatt hour (MWh) of electricity but energy firms said that would not cover their outlays after the cost of building an offshore wind farm had soared by 40% for much of the industry.

Earlier this week an industry report warned that private sector investment worth up to £100bn is needed to deliver key projects to safeguard UK energy security. Offshore Energies UK’s 2023 Economic Report said the sum is also needed to install all the renewable infrastructure required to get the UK to net zero by 2050.

Original artice – https://business-live.co.uk/all-about/yorkshire-humber

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