SSE Renewables is calling on governments and regulators across Europe and internationally to make greater use of non-price criteria (NPC) in offshore wind energy auctions, whether for seabed or for Contracts for Difference (CfD).
The developer argues that the use of NPC in auctions for new offshore wind can help support a sustainable renewable energy sector which delivers long term value for society.
To contribute to the debate, the company has published a short position paper on the use of NPC.
The paper separates out the type of criteria best suited for mature and new offshore wind markets, as well as those for an auction for seabed or for a CfD.
It argues that NPC must be well-designed, carefully implemented, with transparent assessment and monitoring of commitments to avoid overcomplication and risk of legal challenges.
In addition, SSE says seabed leasing auctions for offshore wind are best suited for use of NPC, as it is early enough in the development stage for commitments to be delivered and avoids having to rely on purely financial bidding which risks adding to the cost of offshore wind.
The most appropriate NPC are track record and deliverability of projects, according to the report.
Beyond that, criteria related to sustainability (circularity, workforce and skills), ecological protection and enhancement, and supply chain development should be priorities.
SSE Renewables has extensive experience of NPC, having participated in auctions including ScotWind, the most recent Polish offshore licence tender and the Hollandse Kust West tenders in the Netherlands.
Its director of corporate affairs Alexandra Malone said: “While the attractiveness of auctioning on the basis of lowest price is the belief that it will lead to the lowest costs in the short term, it doesn’t always reward the best site, project, or developer which often results in missing out on wider long term societal benefits – achieving industrial strategies, enhancing the environment and boosting innovation.
“That’s why we support greater use of non-price criteria in offshore auctions. If designed and implemented properly, they can help deliver and maximise longer term benefits for society by rewarding the projects and developers on a wider basis than simply who can bid the lowest, or the most in the case of seabed auctions or negative bidding.”
Following the publication of the position paper SSE Renewables will now engage constructively in discussions on this topic at a UK, European and global level through organisations such as Wind Europe, GWEC, and the Global Offshore Wind Alliance; as well as directly with governments and regulators.