Government gives green light to massive offshore wind expansion

The announcement came in the same week the World Wind Energy Association predicted that global wind power production capacity will grow by a record 25 per cent this year, despite financing difficulties for some projects in the economic downturn.

 
The extra UK capacity will be enough to power 20 million homes, creating 70,000 new jobs and generating £8 billion a year in the process.


Today’s announcement, made by Lord Hunt, Energy and Climate Change Minister at the BWEA Offshore Wind Conference, means that the Crown Estate can proceed with the third round of its leasing competition for development rights of offshore wind farms in UK waters.


Welcoming the announcement, Nick Rau energy campaigner at Friends of the Earth said: "At last the Government is starting to recognise the enormous potential of the UK's offshore wind power and its crucial role in slashing emissions and securing a national energy system based on clean, safe, renewable energy.” 
 
He added: "With this new round of investment, offshore wind could supply 25 per cent of the UK's electricity demand.”


However, Lord Hunt warned: “The rate of deployment will depend on a range of factors … including market uptake, the relative cost of offshore wind compared to other options, the ability of other technologies to deliver, the potential for energy exports to other countries and the need for increased renewables capacity beyond 2020.”


He acknowledged, however: “There is much that we, the Government, can do to facilitate the necessary expansion of the offshore wind industry – and indeed the wave and tidal industries.”


The importance of Government action was highlighted in two reports published by the BWEA today – one looking at the potential timetable, the other at the potential costs for a massive expansion in offshore wind power that could eventually see every home in the UK powered by electricity from offshore wind.


“Our report on costs predicts that offshore prices over the next five years will depend on investor confidence,” said the BWEA’s chief executive Maria McCaffery. “It will take three to four manufacturers in the market to boost competition enough to start pushing down prices. If we achieve an annual deployment of around four to five GW Europe-wide, then we could see prices fall by as much as 20 per cent from today’s £3.1 million per MW.


“Round three is set to deliver the UK portion of this capacity and the Government must pull out all the stops to accommodate this programme.”


One measure announced by the Government today was the launch of the tendering process for £15 billion of new cabling to connect offshore wind farms to the mainland.


The competitive tender process, which is to be run by Ofgem, has the potential to save generators £1 billion by getting the best deal, the Government claims.


Ofgem’s chief executive Alistair Buchanan said: “The offshore transmission regime will deliver significant cost savings to current and future consumers and renewable generators and make a real impact in Britain’s drive to tackle climate change. It’s a huge opportunity for investment under a long-term, low-risk regulatory regime.”