UK Government plots course for additional offshore wind capacity
The UK Government has unveiled plans to add between 1GW to 2GW of renewable wind power annually throughout the 2020s, after Energy and Clean Growth Minister Claire Perry outlined the next wave of Contract for Difference (CfD) auctions.
Offshore wind and, for the first time, remote island wind providers are eligible to bid for contracts at the next CfD auctions, which will take place in May 2019 and then every following two years. The UK Government has set aside £557m for these auctions and, depending on prices, could deliver up to 2GW of additional wind capacity each year in the 2020s.
Energy and Clean Growth Minister Claire Perry said: “The UK renewables sector is thriving, with more offshore wind capacity here than anywhere else in the world and 50% of electricity coming from low-carbon sources last year in what was our greenest year ever.
“For the last decade, the offshore wind industry has been a great British success story: increasing productivity, raising earnings and improving lives in communities across the UK; and today the sector gets the certainty it needs to build on this success through the next 10 years.”
The results from the latest CfD auction saw the cost of offshore wind halve over the last two years to set a record low-strike price of £57.50 per MWh. The UK already has more than 7GW of operational offshore wind capacity – the largest of any nation – with a further 7GW already confirmed through secured contracts. Collectively, the offshore wind sector plans to double its generation output by 2030 to 30GW.
The announcement has been welcomed by the renewables industry, with RenewableUK suggesting that offshore wind could generate approximately 20% of UK power as a result of the auctions, compared with 6% today.
RenewableUK’s 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 to deliver the tens of billions of pounds of investment that will be needed to meet our ambition of at least 30GW by 2030.”
Greenpeace also welcomed the announcement, stating that offshore wind was the “logical choice to provide the backbone of the UK’s energy needs”. However, the organisation’s head of energy, Kate Blagojevic, labelled ongoing support for nuclear technologies as “confusing and irrational”.
Elsewhere, Scottish Renewable’s deputy chief executive, Jenny Hogan, claimed the CfD auctions would enable developers and supply chain companies across Scotland to “plan for projects over the next decade with more certainty”.
Wind developer Ørsted, which is now exploring battery technology to compliment offshore installations, has also welcomed the decision.
Ørsted’s UK country manager and co-chair of the Offshore Wind Industry Council, Benj Sykes, added: “I welcome today’s announcement which is a strong vote of confidence in our industry. As well as cost-effectively reducing carbon emissions to meet our climate change targets, the offshore wind sector is powering the clean economy, bringing investment, skilled jobs and supply chain opportunities to businesses up and down the UK.
“We have proposed a transformative ambition to deliver at least 30GW by 2030, enough to meet more than a third of the country’s electricity needs, which in turn, together with the pipeline of regular auctions announced today, could increase exports five-fold, create thousands of skilled jobs and reduce electricity system costs.”