Offshore wind energy study calls for greater clarity over pricing

Simon Gray of EEEGR

Simon Gray of EEEGR - Credit: Archant

Ministers have been called on to provider greater leadership and clarity after the publication of a report warning that British is not making the most of its opportunity to become the “Saudi Arabia of offshore wind”.

The study, from the think tank IPPR, says the British Isles have ideal conditions for offshore wind turbines, with large areas of seabed in shallow waters, close to shore, but warns that the Government is not doing enough to bring down costs and secure British jobs in the sector.

It claims that just 4.4gigawatts of offshore wind capacity is likely to come online between 2020 and 2030 against a previous of target of 18GW which, it says, would mean the UK missing out on around 15,000 jobs.

Will Straw, associate director at IPPR, said: “The UK’s current policy trajectory could see it achieving a ‘worst of all worlds’ outcome: low volume, low jobs and high costs.

“This would fail our climate challenge, our jobs challenge, and our rebalancing challenge. Unless Britain ‘pumps up the volume’ there is little prospect of either bringing down the costs of offshore wind or creating domestic jobs.

“An alternative pathway is possible, if the Government can bring together an industrial strategy for the sector predicated on a combination of ‘carrots and sticks’. The industry should be given the long-term clarity that it needs, and which has been provided in other countries. A 2030 target for the carbon intensity or share of renewables in the power sector is a necessary condition as are long-term 20 year contracts.

“But developers must be expected to drive down costs with a subsidy regime that reduces the strike price over time. Developers and suppliers should do more to provide apprenticeships and sponsor university and further education courses.”

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Simon Gray, chief executive of the East of England Energy Group (EEEGR), the business-led regional alliance which aims to drive growth in the energy sector, said: “We have the expertise and the determination to maximise the opportunities for our region in this once-in-a-lifetime opportunity. However positive leadership, clarity and strong, sensible financial support from the Government is vital to attract investment.

“While we are delighted that Government has announced the draft strike price for offshore wind, the general reaction from EEEGR members is that the devil will be in the detail. To date, insufficient detail is available and more is due to be published in the next couple of months.

“One key issue that needs addressing is the duration of these prices. With the information published so far, we only have prices shown until 2020. For any business that requires such large sums of investment, the timescale will need to be far longer.”