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Released August 27, 2024 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The new Labour government in the U.K. has revealed record funding of £1.5 billion (US$1.94 billion) for renewable energy auctions to help its stalled offshore wind sector.
Energy Secretary Ed Miliband announced the raised budget, which is £500 million (US$650 million) more than was available last year under the Conservative Party-led government and whose offshore wind auctions in September received no bids from offshore wind developers. The bulk of the money, £1.1 billion (US$1.4 billion), will be used to attract developers to the offshore sector. Last September, the auction for up to 5 gigawatts (GW) of wind projects failed to receive a single bid, with developers claiming that the guaranteed price for power generated--or strike price--was too low to make the projects viable and didn't reflect a general increase in manufacturing and construction costs as well as supply chain difficulties exacerbated by Russia's war in Ukraine. For additional information, see September 26, 2023, article - U.K. Fails to Attract Any Offshore Wind Bidders.
"Last year's auction round was a catastrophe, with zero offshore wind secured, and delaying our move away from expensive fossil fuels to energy independence," explained Energy Secretary Ed Miliband. "Instead, we are backing industry to build in Britain, with this year's auction getting its biggest budget yet. This will restore the U.K. as a global leader for green technologies and deliver the infrastructure we need to boost our energy independence, protect bill payers, and become a clean energy superpower. Industry will now bid for a share of the funding through the government's sixth renewable auction -- known as the Contracts for Difference scheme -- which provides developers with initial subsidies for clean electricity projects across Britain with a built-in design to keep costs low for bill payers."
The new government has committed to doubling onshore wind and quadrupling offshore wind by 2030, as a cornerstone of its goal to fully decarbonise electricity by 2030. That means increasing onshore wind from 15 to 30 GW and offshore wind, where the country is already No. 1 in Europe, from 15 to 60 GW. Following the increase, the Allocation Round 6 (AR6) budget includes:
The new government has moved very quickly on a number of energy-related fronts since winning the election last month. Most recently, it approved three large solar farm projects with a combined generating capacity of 1.3 GW, which were denied planning permission by the previous Tory government. It also scrapped a nine-year ban on the building of onshore windfarms. The repeal of the ban, described as "absurd" by new Chancellor Rachel Reeves, may soon be backed by the possibility that large onshore projects could be classed as nationally significant infrastructure projects (NSIPs), which would allow the government to approve projects quickly without local council approval. For additional information, see July 23, 2024, article - Bright Future for U.K. Solar as Major Projects Permitted and July 17, 2024, article - U.K. Drops Onshore Wind Ban, but Oil & Gas Sector Worried.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
Energy Secretary Ed Miliband announced the raised budget, which is £500 million (US$650 million) more than was available last year under the Conservative Party-led government and whose offshore wind auctions in September received no bids from offshore wind developers. The bulk of the money, £1.1 billion (US$1.4 billion), will be used to attract developers to the offshore sector. Last September, the auction for up to 5 gigawatts (GW) of wind projects failed to receive a single bid, with developers claiming that the guaranteed price for power generated--or strike price--was too low to make the projects viable and didn't reflect a general increase in manufacturing and construction costs as well as supply chain difficulties exacerbated by Russia's war in Ukraine. For additional information, see September 26, 2023, article - U.K. Fails to Attract Any Offshore Wind Bidders.
"Last year's auction round was a catastrophe, with zero offshore wind secured, and delaying our move away from expensive fossil fuels to energy independence," explained Energy Secretary Ed Miliband. "Instead, we are backing industry to build in Britain, with this year's auction getting its biggest budget yet. This will restore the U.K. as a global leader for green technologies and deliver the infrastructure we need to boost our energy independence, protect bill payers, and become a clean energy superpower. Industry will now bid for a share of the funding through the government's sixth renewable auction -- known as the Contracts for Difference scheme -- which provides developers with initial subsidies for clean electricity projects across Britain with a built-in design to keep costs low for bill payers."
The new government has committed to doubling onshore wind and quadrupling offshore wind by 2030, as a cornerstone of its goal to fully decarbonise electricity by 2030. That means increasing onshore wind from 15 to 30 GW and offshore wind, where the country is already No. 1 in Europe, from 15 to 60 GW. Following the increase, the Allocation Round 6 (AR6) budget includes:
- £1.1 billion (US$1.4 billion) for offshore wind, an uplift of £300 million (US$390 million)
- £185 million (US$240 million) for established technologies such as onshore wind and solar, an uplift of £65 million (US$84 million)
- £270 million (US$351 million) for emerging technologies such as floating offshore wind and tidal, an uplift of £165 million (US$214 million)
The new government has moved very quickly on a number of energy-related fronts since winning the election last month. Most recently, it approved three large solar farm projects with a combined generating capacity of 1.3 GW, which were denied planning permission by the previous Tory government. It also scrapped a nine-year ban on the building of onshore windfarms. The repeal of the ban, described as "absurd" by new Chancellor Rachel Reeves, may soon be backed by the possibility that large onshore projects could be classed as nationally significant infrastructure projects (NSIPs), which would allow the government to approve projects quickly without local council approval. For additional information, see July 23, 2024, article - Bright Future for U.K. Solar as Major Projects Permitted and July 17, 2024, article - U.K. Drops Onshore Wind Ban, but Oil & Gas Sector Worried.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
