Floating wind has stalled at the gate in the UK after no floating projects were awarded in the latest Contracts for Difference auction.
RenewableUK Cymru, the Welsh arm of the UK trade body, said the result would delay floating wind investment decisions for developers, supply chain companies, ports and infrastructure and have “knock-on effects.”
The group’s director Jess Hooper attacked the government for its focus on cost reduction amid high costs and supply chain pressures for the sector.
She said the auction was due to be the sole source of revenue for 100MW floating wind project Erebus, Wales’ first floating wind demonstration project planned off Pembrokeshire.
But the strike price the government set was too low and it was thought the Erebus project did not enter the auction, trade body representatives said. This was a signal to reform the auction mechanism.
Erebus and Blyth 2 are thought to be the only two UK floaters that were fully consented and ready to enter.
Erebus is backed by Blue Gem Wind, a JV of France’s TotalEnergies and Irish developer Simply Blue Group. Blyth 2 is being developed by French state-owned utility EDF.
Swedish developer Hexicon’s 32MW TwinHub off Cornwall was first floating wind farm ever to win a CfD last year.
Only 80MW of floating offshore wind is running in the UK at present and there are no commercial floaters in operation in the country.
Tom Hill, Marine Energy Wales programme manager and chair of the Celtic Sea Developer Alliance said the move “is deeply worrying for the sector”.
He added: “The UK government is not providing the confidence for investment that this industry desperately needs.
“Unless the CfD process is reformed to move away from a focus on competition for the lowest electron, the supply chain in Wales and the UK will be disadvantaged, particularly at this stage, where developments are in their infancy.
“The absence of offshore wind developers on the list of contract winners is also a huge blow for Wales and Welsh government net zero ambitions.
“The fact that the Erebus project could now be delayed will have tremendous knock-on-effects on Welsh supply chain, ports and send the wrong message to the world.”