WindEurope calls UK’s £1 billion offshore budget ‘disappointing’

The UK today (28 October) said its initial proposed budget was £900 million for fixed-bottom projects and £180 million for floating wind, which would translate into 5-6GW of generation capacity.

The UK, says WindEurope, currently has 12.5GW of offshore capacity and is well ahead of the rest of Europe, but if this amount were set aside for this auction, there would not be enough to hit the national target of 50GW by 2030.

“This budget risks severely restricting the growth of offshore wind in the UK,” said Giles Dickson, CEO of WindEurope, who is shortly stepping down from the role. “There are lots of good projects waiting to be built, and consumers and industry want the cheaper electricity that they’d bring. But with this initial budget proposal, only a quarter of the projects will get through. That would be a big missed opportunity for the UK. They’d miss out on millions in investment and thousands of jobs. It would undermine the UK’s leadership on offshore wind. And impact negatively on the whole of the UK and European wind supply chain.”

The AR7 auction, which will be held between November 11-17, will be the penultimate one before a final one held before the deadline of 2030, and Dickson said with this budget there was no way the target would be hit.

In AR5, in 2023, not a single bid was received from offshore wind developers, however last year’s AR6 round saw 5.3GW awarded.

“Every gigawatt of offshore wind brings £2-3 billion to the UK,” he said. ”And they’ve got the projects ready to deliver these benefits. More than 20GW of offshore wind are ready to bid in this auction. But only around a quarter of those would actually go forward with this budget.”

The government has set a maximum price for electricity from these projects: £113 per megawatt-hour for bottom fixed offshore wind and £271 per megawatt-hour for floating wind, reflecting the fact that floating wind is still a newer and more expensive technology.

Results of the auction, sealed bids for which must be sent in between November 11-17, will be announced on January 14.