The UK government has said it will close a “loophole” by requiring sub-300MW floating wind projects to submit supply chain plans before they can bid into the next UK Contracts for Difference (CfD) auction.
Under the Auction Round 5 plans, the government had previously said the requirement would only apply to developers seeking strike prices for floaters of 300MW or more.
But the Department for Business, Energy & Industrial Strategy has now confirmed projects below 300MW will be assessed on their supply chain commitments to prevent developers “downsizing” their wind farms to avoid the requirement.
They will have to score at least 50% on their questionnaires to be eligible to participate in the CfD scheme, while 300MW-plus floaters will need to score 60% or more to take part.
The projects will be judged on a range of criteria, including main suppliers being considered, public engagement, contracting strategy and investment in new manufacturing facilities.
However, the majority of respondents to a BEIS consultation on the proposals believe that the previous 300MW threshold for floating wind was appropriate “due to the fact smaller developers did not have a significant enough impact on the supply chain”.
They added that expanding the requirement for these developers was “disproportionate”.
Many also said the burdens of the supply chain process were not enough to incentivise developers to submit smaller projects, as the economic benefits of the big projects outweigh the negatives.
Yet the guidelines have also been welcomed by companies driving local content in the UK. Writing on Linkedin today, BW Ideol chief sales & marketing officer Bruno G. Geschier said the AR5 plans were “great news” for the floating substructure business given its “uniquely high local content solution” at Ardersier in Scotland.
AR5 is provisionally expected to start in spring 2023, though details on the exact timeline have yet to be released.
Given the nascent stage of floating wind technology, the CfD round is only expected to attract bids from sub-300MW projects. Simply Blue Energy and TotalEnergies’ 96MW Erebus in the Celtic Sea is among the most advanced floater projects in the UK but is still awaiting planning consent.
In its conclusion to the consultation, BEIS notes: “The government will keep the threshold for completing a Supply Chain plan under review but can confirm that we have no immediate plans to reduce the threshold for technologies other than Floating Offshore Wind, where we are keen to target its mass deployment potential.”