Campaigners slam ‘pitiful’ level of support for next wave of offshore wind farms. The government has today confirmed £60m will be assigned for the next clean energy contract auction in spring 2019, sparking fierce criticism that the lower than anticipated level of support could jeopardise UK climate goals. Speaking in the House of Commons today, Energy and Clean Growth Minister Claire Perry said that as part of Offshore Wind Week the government was in the final stages of concluding a new offshore wind sector deal. “It will include both £60m for the Contract for Difference (CfD) auction next spring and a series of substantial commitments from the operators in the sectors to increase the UK content that will be spent,” she said. Industry insiders said it was good to have the level of support confirmed, predicting that it should enable the development of around 2GW to 3GW of new capacity. But privately executives described the funding allocation as “very disappointing” and well short of the 4GW of capacity the sector had been hoping to deliver through each contract round up to 2030. The government has assigned £557m to be divided between a series of CfD auctions through to 2025, and with onshore wind and solar projects currently unable to compete in the auctions offshore wind and nuclear projects remain the primary means of delivering large amounts of clean power capacity during the 2020s.
Business Green 20th Nov 2018 read more »
The Department of Business, Energy and Industrial Strategy (BEIS) is set to finalise a draft allocation of £60m for the next Contract for Difference (CfD) auction, raising questions as to how the remaining £497m set aside for future auctions will be spent. BEIS has today (20 November) issued its CfD Draft Allocation notice, allocating a £60m budget for “less-established” Pot 2 technologies, for the delivery years 2023-24 and 2024-25. Earlier this year it was revealed that offshore wind and, for the first time, remote island wind providers would 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. However, it appears that BEIS is set to impose a capacity cap of 6GW for the third CfD allocation round, with strike prices set below the record levels set in the previous auction. An administrative strike price for offshore wind has been set at £53-56/MWh, while the newly added remote island onshore wind technologies will have a strike price of £82/MWh for both delivery years. Developers, green groups and politicians had welcomed previous results from the UK Government’s 2017 CfD auction, which has seen the cost of offshore wind halve over the last two years to set a record low-strike price of £57.50 per MWh. However, the publication of the draft allocation has been seen by some green groups as a missed opportunity to lower offshore costs even further. Greenpeace UK’s head of energy, Kate Blagojevic, said: “This is a genuinely bewildering move by the government that misses the opportunity to drive down offshore wind costs as fast as possible. “They promised over half a billion pounds in investment, that was widely expected to be divvied up and made available in sizeable chunks over the next few years. But this first chunk is a pitiful sum that could end up limiting UK export potential and jeopardising our climate goals.”
Edie 20th Nov 2018 read more »
The government has slashed the financial support on offer for new offshore wind farms, forcing developers to find further cost savings if their projects are to proceed. Claire Perry, the energy minister, said that the government aimed to “secure more energy from renewables for less” after announcing that it would award subsidy contracts worth up to £60 million a year to new projects through an auction in May. The budget is barely a third of the value of subsidies awarded via the last auction in 2017, when wind farms with a capacity of 3.2 gigawatts got the go-ahead. The government said that it expected the reduced budget to be able to deliver more wind farm capacity than last time, of about four gigawatts. The maximum price that new offshore wind farms will receive for the electricity they generate will be at least 40 per cent lower than the price for power from the Hinkley Point C nuclear plant. Writing for The Times website, Ms Perry said the auctions would “make the UK a beacon for inward investment and provide the private sector with the certainty it needs to invest”.
Times 21st Nov 2018 read more »
Offshore wind farm developers will need to put up a fight to clinch contracts worth £60m a year under new rules which will slash the starting price the upcoming subsidy auction in half. The cost of supporting offshore wind farms has plummeted in recent years, but ministers expect even deeper cuts to the auction bids put forward by developers this spring. The starting bid for wind projects which begin generating power in the 2023/24 financial year cannot be higher than £56 per megawatt hour of power produced. This is already cheaper than the rock-bottom bid of £57.50/MWh which earned developers a contract in last year’s auction where bids tumbled from a maximum price of £105/MWh. Offshore projects which begin spinning in the 2024/25 financial year cannot enter a bid higher than £53/MWh , almost half the cap set only eighteen months ago. The Government’s subsidy expectations are lower than the market price for baseload power futures contracts which have remained stubbornly above £60/MWh since the summer. “The Government is really turning the screws on the offshore wind industry in this auction,” said Richard Howard, an analyst at Aurora Energy. “In order to be successful, projects will have to be brought in at a lower cost than any offshore wind project in the UK to date. This cost trajectory will be challenging for the offshore wind industry to achieve, and relies on the supply chain bringing forward a new generation of very large turbines,” he said. Meanwhile, ministers are finalising the details of a sector deal for offshore wind which will force developers to include more UK manufacturers in the construction of major offshore projects.
Telegraph 20th Nov 2018 read more »
CLAIRE PERRY: Offshore deal sows the wind to reap a clean energy whirlwind. Thanks to the economic conditions created through our modern industrial strategy, local economies are seizing one the greatest industrial opportunities of our time. Around 75 per cent of contracts for operations and maintenance of our offshore wind farms are being won by UK companies. Look to Hull, Grimsby, Barrow-in-Furness, Great Yarmouth, Campbeltown and Lowestoft, and you’ll see areas reaping the rewards of this thriving sector. Over the next three years the sector is expecting to invest £17.5 billion around the country, creating thousands of more quality jobs and local growth. But we don’t want the success story to stop there. We’re determined to do all we can to enhance the business environment to ensure the sector grows even further. In July, I set out how offshore wind and remote island wind providers and other renewable electricity generating technologies, can bid for contracts to power over four million homes from Cornwall to the Shetland Isles. These clean electricity auctions will be held in 2019 and every two years from then on, signalling support worth up to £557 million for industry. Today we’re announcing that £60 million of this funding will be available for the May 2019 auction, with the goal of securing more energy from renewables for less. These auctions will continue into the 2020s, making the UK a beacon for inward investment and providing the private sector with the certainty it needs to invest.
Times 21st Nov 2018 read more »
GE Renewable Energy and the Offshore Renewable Energy (ORE) Catapult last night announced a £9 million research partnership. Both firms will seek to reduce offshore time in the offshore wind sector as part of a four-year deal. Glasgow-based ORE said it would “enhance both safety and operating costs for offshore wind farms”. The deal is part of GE’s broader offshore wind strategy for the UK, collaborating with firms to drive down the cost of electricity and improve reliability of offshore wind projects.
Energy Voice 21st Nov 2018 read more »