UK Offshore wind capacity set to double following Government announcement
23 July 2018
Posted by: Luke Clark
RenewableUK is welcoming the announcement by the Department for Business, Energy and Industrial Strategy on new auctions to secure renewable energy sources which mean that the UK’s offshore wind capacity is set to double over the next decade.
Ministers have today confirmed that the next competitive auction to procure new renewable power capacity which will take place in May 2019, with offshore wind, remote island wind and a range of other projects competing for Contracts for Difference (CfD). The Minister for Clean Growth and Climate Change, Claire Perry, also announced that further CfD auctions will take place every 2 years and that auctions will be supported by a budget of £557m.
The UK already has just over 7GW gigawatts (GW) of operational offshore wind capacity – the largest amount of any country – and a further 7GW under construction or with contracts secured. The Government’s announcement of support for an additional 2GW of offshore wind per year in the 2020s could deliver up to 16GW of new capacity, which would generate approximately 20% of UK power. In 2017, offshore wind generated 6% of UK power.
Today’s announcement follows last year’s successful CfD auction which saw the cost of power from new offshore wind farms fall by 50%, making it one of the cheapest options for new power in the UK – lower than the cost of new gas and nuclear power.
Welcoming the announcement, RenewableUK’s Chief Executive, Hugh McNeal, said:
“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. 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.
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”
Benj Sykes, Co-Chair of the Offshore Wind Industry Council and UK Country Manager at Ørsted said:
“I welcome today’s announcement which is a strong vote of confidence in our industry. 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. "
For further information, please contact:
· Luke Clark, Head of External Affairs 0207 901 3037 or 07973 481 907 Luke.Clark@RenewableUK.com
· Robert Norris, Head of Communications, 0207 901 3013 or 07969 229 913 Robert.Norris@RenewableUK.com
1. RenewableUK’s members are building our future energy system, powered by clean electricity. We bring them together to deliver that future faster; a future which is better for industry, billpayers, and the environment. We support over 400 member companies to ensure increasing amounts of renewable electricity are deployed across the UK and access markets to export all over the world. Our members are business leaders, technology innovators, and expert thinkers from right across industry. We are celebrating our 40th anniversary this year.
2. The Government’s announcement is available on the BEIS website
3. Contracts for Difference are awarded using a competitive auction to determine a fixed price for power produced for a period of 15 years. The last CfD auction covered projects delivering up to 2022/23. New auctions announced today are expected to support up 2GW of new capacity per year to 2030.
4. 1GW of offshore wind powers just over 1 million homes. 16GW of new offshore wind capacity would generate 67TWh, using the Government’s latest 47.7% load factor. Total UK electricity generation in 2017 was 338TWh.