Pay communities to host offshore wind farms, Leadsom and Rudd urge UK Government

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The pair have issued the warning in a new report from Policy Exchange today (8 July), to which they have written the foreword. Entitled ‘Crossed Wires: Avoiding Local Backlash Against Offshore Wind Farms’, the document argues the case for better community engagement from the UK Government as it strives to deliver an ambition for the nation to host 40GW of offshore wind generation capacity by 2030.  

According to the report from the thinktank, offshore wind has, “to date”, avoided much of the backlash from local communities that has been seen with onshore wind and, latterly, fracking. But the report stipulates that this could change as the sector scales rapidly this decade, with communities likely to be “concerned about the sheer amount of infrastructure built by individual offshore wind companies” and its impact on “precious inland areas”.

To that end, the report outlines a string of recommendations that would minimise the amount of new onshore infrastructure needed for new offshore wind farms and for the expansion of existing projects.

It states that the Government’s current approach to energy system planning is too short-term; 30-year timescales should now be considered long-term instead of 10-year timescales, in light of the UK’s legally binding net-zero target for 2050. Power and utilities are often described as enablers of the net-zero transition for other sectors.

More specifically, the report recommends the creation of a new independent body to plan and operate Britain’s onshore and offshore electricity network, modelled on the Independent System Operator (ISO) hosted by the US Government. Such a body would be independent from National Grid and accountable to the Department for Business, Energy and Industrial Strategy (BEIS). Another body, a ‘UK Sea Authority’, could be established to ensure that the offshore electricity sector’s needs are compatible with those of other seabed users, including fishing, shipping, carbon capture and nature restoration and conservation organisations.

Additionally flagged in the report is the creation of a ‘ring main’ – a piece of offshore infrastructure that could transmit electricity directly to customers in cities inland, including London. This could minimise the need for new substations, power lines and pylons. Creating a ring main would require neighbouring offshore wind farms to coordinate infrastructure and timelines, but the report concludes that this would be possible. Developers could potentially be incentivised to build and connect wind turbines in the places where they will reduce energy bills the most, feeding into the Government’s ‘levelling up’ agenda.

Where new onshore infrastructure is necessary, the report argues, communities should be compensated for the disruption they face. Developers of wind farms should be mandated to pay into ring-fenced ‘wealth funds’ which could pay for upgrades to facilities in the communities or for local skills programmes. Policy Exchange is proposing that developers allocate £2m per year to ‘wealth funds’ for each project, per GW of capacity installed, for 15 years. This is similar to the mandates already placed on onshore wind developers.

Policy Exchange’s senior research fellow for the energy and environment unit Ed Birkett said: “Offshore wind is a huge UK success story. But success brings new challenges. Unless the Government gets ahead of this problem, new offshore wind farms will be delayed or even blocked by increasing local resistance.

“The Offshore Transmission Network Review is a great start, but it needs to be part of a wider package to reform the electricity sector. It’s vitally important that these changes are included in any Energy Act that the Government brings forward in the next couple of years.”

The original Energy Act was created by the now-defunct Department for Energy and Climate Change (DECC) and received Royal Assent in 2013. It covered the period through to 2020 and was aligned with the original Climate Change Act, which mandated an 80% reduction in the UK’s emissions by 2050. An updated version is now being developed in light of the net-zero target. Since that target was announced in 2019, the main policy change has been the launch of the Energy White Paper.

Funding boost

The Policy Connect report comes shortly after BEIS announced a multi-million-pound investment boost for offshore wind equipment and infrastructure manufacturers SeAH Wind and Smulders Projects UK.

This funding is being offered as grants and was first announced last year, with the creation of an Offshore Wind Manufacturing Support Scheme that initially had a £160m pot. The grant funding is being added to private sector investment and BEIS has announced that £180m will be spent across the two firms.

SeAH Wind and Smulders Projects UK are based in Humber and Newcastle-upon-Tyne respectively. BEIS has estimated that their projects will create more than 1,000 new jobs.

“With the largest installed capacity of offshore wind in the world, we are determined to grow and nurture a strong, world-class manufacturing base so British businesses and our workforce can fully seize the economic benefits being a windy island nation brings,” Energy Secretary Kwasi Kwarteng said.

Indeed, the UK Government has this month proposed changes to the Contracts for Difference (CfD) scheme that would require developers to disclose supply chain plans for new projects. Plans would need to detail how developers would ensure that 60% of the manufacturing associated with their projects is UK-based. Such a mandate could come into force from 2030, subject to consultation.

Sarah George

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