UK Offshore Wind Set To Double As Government Confirms Future Auctions

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The UK offshore wind energy industry is set to double after the country’s Department for Business, Energy, and Industrial Strategy announced on Monday long-term political support for the country’s offshore wind energy industry by confirming the next competitive auction would take place in May 2019 and every 2 years afterwards, with Government support worth up to £557 million.

It is no secret that the UK is the global offshore wind energy leader, with over 7 gigawatts (GW) of operational capacity and a further 7GW under construction or with contracts secured. In fact, when bringing into account the entire pipeline, recent figures from RenewableUK, the country’s wind, wave, and tidal energy trade organization, showed that the UK’s entire offshore wind portfolio sits at just over 35 GW.

More than that, however, the UK is also one of the world’s leading destinations for manufacturing, research and development, and technical expertise.

Unsurprisingly, therefore, predictions that the UK’s offshore wind sector could reach up to 30 GW by 2030 might be underselling the opportunities available. With state-of-the-art offshore wind developments hubs around the country, an entire coastline of potential offshore wind development, and even the groundbreaking European Offshore Wind Deployment Centre off the coast of Scotland, the UK stands head and shoulders above other countries looking to break into and build up their own wind energy development.

This is increasingly the case now that the UK Department for Business, Energy, and Industrial Strategy (BEIS) has announced new commitments to the offshore wind energy industry in the form of confirmed Contracts for Difference competitive auctions every two years, starting in May 2019. The stable timeline for auctions comes in conjunction with support for two world-leading North East research centers, and a focus on developing Local Industrial Strategies in the North East and Tees Valley regions.

“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,” explained 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 most important aspect of this new announcement was the news that, starting in May 2019, new competitive auctions for offshore wind power (as well as remote island wind providers) will be able to bid for contracts to power up to four million homes. The Contracts for Difference auctions will be held every two years and, depending on the prices achieved in the auctions, there will be between 1 to 2 GW worth of offshore wind each year in the 2020s. The Government has also signaled support worth up to £557 million for the offshore wind energy industry.

“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,” said Energy and Clean Growth Minister 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.”

In addition to confirming the new competitive auctions, the UK Government unveiled support for the Offshore Renewable Energy Catapult in Blyth and the Centre for Process Innovation in Redcar, part of the High Value Manufacturing Catapult.

“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,” said Secretary Clark. “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.”

“We’re working with local leaders and businesses who know their areas and its unique strengths best to develop tailored Local Industrial Strategies to create more opportunities and drive growth across the UK.”

The announcements have led those within the country’s offshore wind industry to predict the UK’s offshore wind capacity could double over the next decade with this new injection of financing and political support. RenewableUK’s chief executive Hugh McNeal said of the deal:

“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.

“This is also an important boost for remote island wind, which like other renewables, is popular with the public and is a unique economic opportunity for island communities.”

“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.”

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Joshua S Hill

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