RenewableUK has welcomed an announcement by the Department for Business, Energy and Industrial Strategy on new auctions that will secure renewable energy sources and see the UK’s offshore wind capacity nearly double over the next decade.
Ministers have confirmed the next competitive auction to procure new renewable power capacity will take place in May 2019, with offshore wind, remote island wind and a range of other projects competing for contracts for difference (CfD).
Minister for Clean Growth and Climate Change Claire Perry also announced that further CfD auctions will take place every two years and will be supported by a budget of £557M (US$653M).
The UK has just over 7 GW of operational offshore wind capacity – the largest amount of any country – and a further 7 GW under construction or with contracts secured. The government’s announcement of support for an additional 2 GW of offshore wind per year in the 2020s could deliver up to 16 GW of new capacity, which would generate approximately 20% of UK power. In 2017, offshore wind generated 6% of UK power.
The announcement follows last year’s successful CfD auction which saw the cost of power from new offshore windfarms 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 the UK’s world-leading offshore wind industry and its ability to deliver for consumers, businesses and British industry.
“Boosting our ambitions for offshore wind is win-win for consumers, as the industry’s success at cutting costs mean that 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 to deliver the tens of billions of pounds of investment that will be needed to meet our ambition of at least 30 GW 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.”
Scottish Renewables deputy chief executive Jenny Hogan said, “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.
“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.
“To help UK businesses reach their full potential and realise government’s industrial and clean growth ambitions it’s vital that all innovative technologies are able to benefit from this cost reduction pathway and to compete meaningfully in auctions using the regulatory tools BEIS has at its disposal.”