Aug 19, 2014

Offshore Wind Industry Expresses Concerns Regarding Policy in the U.K.

3 min
Late last month, trouble was spotted just over the horizon for the U.K.’s offshore wind industry. The world’s leader in the still young r...

Late last month, trouble was spotted just over the horizon for the U.K.’s offshore wind industry. The world’s leader in the still young renewable energy source, the U.K. moved to cap its subsidies for renewable energy projects at £205 million per year. This allowed £50 million for more mature technologies, while £155 million would be allocated for less-mature projects, such as offshore wind farms.

Maria McCaffery, chief executive of RenewableUK, said that this cap has caused “muted shock” across the industry. Writing for BusinessGreen, McCaffery explained how this cap limits the growth of the less mature industries, such as offshore wind. This would allow only one London Array-sized project with funding. There are 5 or 6 of these projects expecting funding, and this cap jeopardizes that.

The government claims the next round of funding will be larger, but naturally, the industry is skeptical. McCaffery is worried that the £1 billion in funding through 2020 won’t be enough to cover all the projects that need to get done.

"This £1bn has to fund all future renewables, including any decision to fund converting coal stations to burn biomass and new carbon capture and storage schemes," she writes in BusinessGreen. "Funding all of this will cost much more than £1bn. All these unknowns create significant uncertainty for investors, the complete opposite of the government's EMR [Electricity Market Reform] intentions."

McCaffery believes the industry’s aspirations are far outpacing the government’s policies and that the future is much closer than the government perceives.

"Government needs to accept that actually 2019 is not that far away," McCaffery says. "Government clearly understands this about our nuclear programme—setting prices out to 2023... Offshore wind needs similar visibility. This means providing access to CfDs (Contracts for Difference) before the second allocation round all the way to 2020/21, as well as action to establish a new Levy Control Framework which will fund projects—renewable, nuclear and carbon, capture and storage—in the 2020s. To develop an offshore wind farm can take 10 years. But right now we only have knowledge of support for six years and access to CfDs on a four-year horizon."

A spokesperson for the Department of Energy and Climate Change believes the U.K. is doing more than any country in the world to support offshore wind. While the industry looks as though it may be stretched thin, growth is still occurring.

ABB was just awarded a $30 million contract to design, engineer, and supply a 25km 220kV AC submarine cable which will export power from the Burbo Bank Extension offshore wind farm in the U.K.

“Offshore wind is making an increasing contribution to boost the share of renewables in Europe's energy mix and this project will support the UK Government's efforts in this area,” ABB power systems division head Claudio Facchin said. “ABB has considerable experience in executing such projects and the technologies to support the efficient integration of renewables into the grid.”

Once the extension is complete, the farm is expected to generate electricity for 240,000 households.

It’s important to note, though, this project is an extension and not a new farm. 

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