Amber Rudd warns of ‘progressive reductions’ to offshore wind subsidies
Energy Secretary Amber Rudd has warned that subsidies for offshore wind will need to be "progressively reduced" in order to keep the public on board with the UK's decarbonisation goals.
Giving the keynote address at RenewableUK’s offshore wind conference today (June 24), Rudd praised the progress the technology has made in the last 15 years, but warned “there is no bottomless pit of bill payer support for low carbon”.
She said: “Government support must help technologies eventually stand on their own two feet, not to encourage a permanent reliance on subsidy. Cost must come down, subsidies must be progressively reduced.
“We have a responsibility to keep costs to consumers down,” said Rudd. “Because only by keeping costs down will we maintain public support for the action we are taking to bring down carbon emissions and combat climate change.”
Rudd called for further cost reduction for the industry to reach £100/MWh in the near future: “Every pound saved puts offshore wind in a strong position to contribute even further to our decarbonisation objectives in the next decade.”
Offshore wind capacity recently passed the 5GW milestone for the first time. There are now 1,452 operational offshore wind turbines in the UK, making it the country with the world’s largest offshore wind capacity.
Rudd also said in her speech the UK’s offshore wind industry had to potential to take advantage of exports to overseas markets in future, saying: “£40bn in component supply and construction contracts will be made available through competitive tender procedures.
“My department and I are determined to back you.”
— DECC (@DECCgovuk) June 24, 2015
On the day of the conference, before Rudd’s speech, RenewableUK released a report urging the government to support the expansion of the offshore wind industry.
The report said offshore wind currently supplies 5% of the UK’s electricity supply and employs 13,000 people in the sector. It stated the industry had already reduced costs by 11% in the last five years.
However, the document warned the UK’s offshore wind potential could be missed without continued support from government policies.
RenewableUK chief executive Maria McCaffery said the industry needed clarity on financial support and regular auctions for Contracts for Difference (CfD). “We’re asking the government to put the right policies in place to safeguard growth – not just for now, but for the long term.”
She added: “We’re also calling for a strong ministerial statement on the role of offshore wind in the energy mix beyond 2020. This should be underpinned by a vision of offshore wind’s contribution to the 4th and 5th carbon budgets which extend out to 2030. Without clarity, the industry can’t unleash new investment.”
Rudd failed to provide the clarity the industry was looking for, saying on CfDs: “As you would expect, I am considering plans for the next CfD round and will set those out in due course.
“I am determined that our low-carbon future remains on a stable long-term footing and therefore I am determined to ensure that the financial support is sustainable before proceeding.”
Rudd also took the opportunity to reiterate the Government’s end to new onshore wind subsidies, saying: “We already have enough onshore wind in the pipeline to hit the middle of the range we need for that technology.”
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