The UK government’s announcement of this year’s Contracts for Difference clean energy auction has been widely criticised after it confirmed that not a single bid was made for contracts regarding offshore wind projects.
Greenpeace UK’s policy director Doug Parr said the failure to include offshore wind is a “monumental disaster” and the “the biggest disaster for clean energy in almost a decade”.
Started in 2014, the Contracts for Difference programme guarantees electricity prices for projects, boosting investor confidence.
Through competitive auctions, projects with the lowest costs win support, ensuring cost savings for consumers and separating newer energy sources from established ones for funding fairness and innovation in the renewables industry.
It is the first time since the launch of Contracts for Difference that offshore wind projects have not been included.
The “record number” of 95 renewable projects that have been awarded government funding include onshore wind, solar and tidal energy and for the first time, geo-thermal.
Energy and climate change minister Graham Stuart said the government still will “work with industry” to hit its targets.
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“Offshore wind is central to our ambitions to decarbonise our electricity supply and our ambition to build 50GW of offshore wind capacity by 2030, including up to 5GW of floating wind, remains firm,” Stuard said.
“The UK installed 300 new turbines last year and we will work with industry to make sure we retain our global leadership in this vital technology,” he added.
From 2010 to 2020, the UK has attracted almost half of all offshore wind investment in Europe, worth around £48 billion, making it the biggest market for capital spending commitments.
Research from RenewableUK also found that the UK’s offshore wind pipeline has reached almost 98GW – up from 91GW this time last year.
However, industry is urging the government not to be complacent.
KPMG vice chair and head of energy and natural resources Simon Virley warns that leaving out offshore wind projects in the Contracts for Difference auction is a “major setback in a critical time.”
Virley also argued the exclusion of offshore wind in the Contracts for Difference scheme “questions the government’s target of 50GW by 2030 and the ambition to get to a Net Zero power system by 2035.”
“This outcome reflects the growing inflationary and supply chain pressures affecting the offshore wind sector in recent years, which is making it harder to deliver these projects at the strike prices and other auction parameters set by the government,” he continued.
