UK offshore wind energy capacity is set to double, according to industry experts, following this week’s announcement from the country’s Department for Business, Energy and Industrial Strategy confirming the next competitive auction will take place in May of 2019, and every two years after that.
The UK currently boasts over 7GW worth of operational offshore wind capacity, with another 7GW under construction or with contracts already secured.
Add to that figures published last month by Renewable UK, the country’s wind, wave, and tidal energy trade body, which show that the UK has an offshore wind portfolio worth 35.2 GW – made up of projects in operation, under construction, or in various stages of development.
However, no matter the strength of an industry, further development can be stymied unless the local government provides firm commitments of future support.
As such, the announcement on Monday by UK Business Secretary Greg Clark and Energy and Clean Growth Minister Claire Perry has been widely praised and welcomed by the offshore wind industry.
Specifically, the government has not only committed to future competitive auctions starting in May of 2019 and ongoing every two years after that, but is also putting its wallet where its mouth is, signalling support worth up to £557 million ($A989 million).
“The UK renewables sector is thriving, with more offshore wind capacity here than anywhere else in the world and 50 per cent of electricity coming from low-carbon sources last year in what was our greenest year ever,” said Claire Perry.
“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 UK’s Contracts for Difference competitive auctions have been driving development of renewable energy for several years now, and for the first time remote island wind will be eligible to compete with other “less established technologies” such as offshore wind (for a given value of “less established”).
Depending on the price achieved for each auction, the auctions will deliver between 1-2GW worth of offshore wind each year throughout the 2020s, solidifying the UK’s position as the world’s leading destination for offshore wind development.
“I welcome today’s announcement which is a strong vote of confidence in our industry,” added Benj Sykes, Co-Chair of the Offshore Wind Industry Council and UK Country Manager at Ørsted.
“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.”
The move was unsurprisingly warmly welcomed by those in and around the UK’s offshore wind energy industry.
“This is a ringing endorsement by Government of our world-leading offshore wind industry and its ability to deliver for UK businesses and British industry,” said RenewableUK’s Chief Executive, Hugh McNeal. “Boosting our ambitions for offshore wind is win for consumers, as 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 30 gigawatts 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.”
The confirmation of future auctions will also be a specific boon to Scotland’s offshore wind energy industry, led in part by the ground-breaking European Offshore Wind Deployment Centre (EOWDC), located in Aberdeen Bay. The EOWDC is set to become a global leader in offshore wind scientific research and is already home to the world’s largest offshore wind turbines – two 8.8 MW turbines, installed by MHI Vestas and currently generating electricity to the national grid.
“This support from the UK government will be welcome news to Scotland’s offshore wind industry,” added Gina Hanrahan, Acting Head of Policy at WWF Scotland.
“Last year’s auction saw the cost of new clean electricity tumble, and with more auctions the price of new energy will continue to fall. We have 25 per cent of Europe’s offshore wind potential and this certainty will power us into the next decade. This is great news for our environment, a shot in the arm for our consumers and most of all a huge vote of confidence in our renewable industry.”
“Today’s confirmation that next year’s auction will take place in May, and the schedule laid out for future rounds, provides much-needed clarity to Scotland’s renewables industry,” said Jenny Hogan, Deputy Chief Executive at Scottish Renewables. “Developers and supply chain companies across Scotland can now plan for projects over the next decade with more certainty.
“The CfD framework has already helped cut the cost of offshore wind by 50% compared to the previous auction round, and these new auctions will be open to a wide variety of less-established technologies at different stages of maturity.”
In addition to the confirmation of future competitive auctions, however, the UK government also committed to supporting research & development and the building of more supply chains throughout the country.
The Offshore Renewable Energy Catapult in Blyth and the Centre for Process Innovation in Redcar, part of the High Value Manufacturing Catapult, will benefit from a governmental cash injection intended to support the development of products and services which will be in growing demand as part of the country’s Industrial Strategy.
“The UK has a world beating reputation for innovation and we are building on this strength as part of our Industrial Strategy with the largest investment in R&D in 40 years,” said Business Secretary Greg Clark. “This investment will drive local growth and innovation across the country, creating more opportunities for high-skilled, well-paid jobs across the country.
“The Catapult network plays a key role in building on UK strengths in sectors and technologies that are going to be in high demand in the years ahead, bringing ideas to products and services on the market. Today’s investment builds on the unique strengths the North East has in renewable energy and advanced manufacturing, helping drive the region’s future economic growth.”
The government will also focus on developing local Industrial Strategies throughout the North East and Tees Valley regions, and help to support supply chains throughout the country to ensure that the offshore projects built in the country are done so using products from local supply chains.