The UK government has promised to hold three offshore wind auctions before the end of the decade provided the industry can meet cost reduction targets.
Energy Minister Amber Rudd (pictured) said in her long-awaited policy ‘reset’ speech today that the government is committed to supporting “our world-leading offshore wind industry”.
She said an initial auction will be held before the end of 2016 with two following through the life of the current parliament.
“Today I can announce that – if and only if the government’s conditions on cost reduction are met – we will make funding available for three auctions in this Parliament. We intend to hold the first of these auctions by the end of 2016.”
Rudd said on costs: “Industry tells us they can meet that challenge and we will hold them to it. If they don’t there will be no subsidy. No more blank cheques.”
Rudd confirmed existing plans to install 10GW of offshore by 2020 and said the new commitment could double that in the next decade.
The auction promise came as part of a wider speech on the government “new” energy policy, which includes consultation to end coal-fired generation by 2025 and an increase in gas and nuclear.
Rudd had little to say on onshore wind except, “We have enough onshore wind in the pipeline to meet our 2020 expectations.”
Trade body RenewableUK said the UK should not “turn its back” on this resource.
“If we want to cut emissions and keep bills low, government needs to show that it won’t stand in the way of subsidy free forms of power, like onshore wind, being able to access our energy market and compete head-to-head with options like nuclear and gas,” said R-UK deputy chief executive Maf Smith.
Smith welcomed the speech’s clarity over the future of offshore wind, which he said will give developers the confidence to invest.
“Industry has already shown it can rise to the challenge of reducing costs and offshore wind companies are confident they will be cost competitive with new gas and new nuclear by 2025,” he said.
Renewable Energy Association chief executive Dr Nina Skorupska said: “We welcome the clarification on the future of coal, but that is mere tinkering around the edges of existing requirements. What the minister has announced today will lock in more gas than we need at the expense of genuinely low carbon technologies.
“In the lead up to the crucial climate talks in Paris which Amber Rudd has stated she wants the UK to be leaders, but the rest of the world will see a country prepared to subsidise gas whilst simultaneously removing support to renewables.”
Brent Cheshire, Dong Energy’s UK chairman said: “Dong Energy welcomes the Secretary of State’s speech on future UK energy policy and her confirmation that offshore wind will continue to play an important role subject to cost cutting conditions being met.
“The UK currently leads the world in the deployment of offshore wind. Dong Energy, along with other key players in the sector, has this week published an offshore wind vision which shows that the technology is becoming increasingly cost competitive, has already created 13,000 jobs, is building a healthy UK supply chain and providing valuable export opportunities.”
DECC said it is committed to taking action on climate change and looking ahead to the conference in Paris in December where an international deal is expected to be agreed.
Rudd said: “Climate change will not be solved by a group of over-tired politicians and negotiators in a conference centre. It will take action by businesses, civil society, cities, regions and countries.
“Paris must deliver that and help unleash the levels of private investment needed. Our most important task is providing a compelling example to the rest of the world of how to cut carbon while controlling costs.”
Image: DECC
