The UK Government has brought Orkney and Shetland in from the cold with a support package for remote island and offshore wind energy worth nearly £600 million.
The new Contracts for Difference (CfD) package, which will allow smaller and remote island developments to bid for contracts able to power up to four million homes, was announced today by minister for energy and clean growth, Claire Perry.
The clean electricity auctions are to be held in 2019 and every two years from then on, with a support package up to £557m available.
Ms Perry said: “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.
“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.
“With wind turbines already providing 15% of the UK’s electricity, today’s fresh vote of confidence in the sector will secure its position as a global leader in a thriving industry, enhance confidence and encourage businesses to make long-term investment. The government has already met its ambition set out in the Clean Growth Strategy to produce 30% of its power from renewable sources by 2020/21 and this fresh support will see the UK secure its position as a world leader in low carbon energy.”
The move could deliver up to an additional two gigawatts (GW) of offshore wind per year in the 2020s, to bring total capacity up to 30GW by 2030 from current levels of 7GW in operation, and 7GW in construction or with contracts.
That will be enough to meet more than a third of the UK’s power needs, boosting jobs and cutting costs for consumers, industry bosses said.
The announcement will be welcomed by renewables organisations after widespread confusion last week concerning the ending of the feed-in-tariff.
Jenny Hogan, Deputy Chief Executive at Scottish Renewables, 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.”
The support package also aims to provide support for the renewables supply chain alongside smaller UK renewables businesses.
Benj Sykes, co-chair of the Offshore Wind Industry Council and UK country manager at Orsted said: “As well as cost-effectively reducing carbon emissions to meet our climate change targets, the offshore wind industry is powering the clean economy, bringing investment, skilled jobs and supply chain opportunities to businesses up and down the UK.
“Our sector has 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 could increase exports five-fold, create thousands of skilled jobs and reduce electricity system costs. Today’s announcement is a vote of confidence in our industry, and will directly enable more investment in the UK.”
Gina Hanrahan, acting head of policy at WWF Scotland said: “This support from the UK Government will be welcome news to Scotland’s offshore wind industry. Last year’s auction saw the cost of new clean electricity tumble, and with more auctions the price of new energy will continue to fall.
“We have 25 per cent of Europe’s offshore wind potential and this certainty will power us into the next decade. This is great news for our environment, a shot in the arm for our consumers and most of all a huge vote of confidence in our renewable industry.”
