Responding to today’s Contracts for Difference (CfD) results, Energy UK’s chief executive, Emma Pinchbeck said:
“The absence of any new offshore wind projects confirms the industry’s worst fears that this auction round would fail to deliver and put the Government’s own 2030 target in jeopardy. As that target shows, offshore wind should be making a huge contribution to ensuring cheaper, cleaner energy for our country and bolstering our energy security by reducing our reliance on costly fossil fuels. While the support for solar and onshore is welcome, it doesn’t compensate for the lack of offshore wind.
“Failing to invest properly risks blowing a hole in our ambitions for providing cheaper, domestic energy and puts the UK in danger of going from leader to loser in offshore wind. Customers are still facing historically high bills because of the volatile cost of fossil fuels and independent analysis suggests the lack of new offshore wind projects could end up costing billpayers as much as £1 billion a year,
“Despite warnings that costs for offshore developers had increased by as much as 40% since the last auction, amidst growing global competition for investment, the Government pressed ahead with terms that were actually inferior to last year’s. CfDs have been a huge factor behind the expansion of new clean energy sources while driving down costs. However they have done that by providing the right level of certainty to developers making huge long-term investment commitments while ensuring their returns are linked to energy prices – and that’s what’s been missing here.
“The Government must learn the lesson quickly that failing to invest properly in our own clean energy sources will cost us dearly – both through higher bills and in missing out on the wider economic benefits that these projects bring like job creation, growth and boosting the domestic supply chains – as shown by our latest report.
“Offshore windfarms take a long time to become operational, and only happen through commitments made years earlier – so we are already playing catch-up on the 2030 target. The Government needs to ensure future auctions recognise the increased costs to develop and build critical infrastructure in the current climate, and produce a robust response to growing global competition for clean energy from the US and EU in the upcoming Autumn Budget.”