A reform of Contracts for Difference as well as the streamlining of offshore wind sites development processes are among the key recommendations contained in a new report by RenewableUK.
Roadmap to net zero: a manifesto for a fully decarbonised power system by 2035 urged the Government to accelerate the pace and scale of decarbonisation dramatically “to reduce the UK’s vulnerability to the surging cost of gas by maximising the benefits of our cheapest sources of renewable power and rapidly developing a new green hydrogen industry.”
The wide-ranging recommendations include reforming Contracts for Difference to attract more investment, particularly in supply chains.
The report noted that although the CfD mechanism has successfully delivered new renewable capacity, the current market set up may not be enough to deliver the volume of projects needed to fully decarbonise by 2035, as surging global demand for offshore wind is increasing competition for investment and putting pressure on supply chains.
These global pressures, combined with maturing technology, means that the trend of ever cheaper prices may be at an end, the report said.
RenewableUK also said an ‘evolution’ of the CfD is needed to incentivise long-term capital investment in major projects, build up supply chains and continue to provide consumers with clean energy at low and stable prices.
It recommended that the Government should consider innovative new policies to make the UK the more attractive for investment in supply chains by, for example, creating new offshore wind enterprise zones where businesses can qualify for tax reliefs or tax credits, in line with the US.
Another key measure is to streamline the process for developing new offshore wind sites, bringing together the skills, experience and capacity which is currently spread across a whole range of disparate bodies into a centralised regulatory authority for consenting and licensing, it said.
The manifesto also highlighted the need for a “fundamental redesign of the way we plan and deliver network infrastructure to connect offshore wind farms to the grid, to minimise the impact on local communities.”
“Speed and scale are key: we must revolutionise the rate at which we build new projects onshore and offshore,” said RenewableUK’s chief executive Dan McGrail.
“We need to transform the way we plan and regulate our energy system, to make the UK the best place to invest in by reforming the CfD mechanism. This will help us to develop our supply chains and build up whole new industries in innovative technologies like floating wind technology and green hydrogen, which we can export worldwide,” he added.