PROPOSED cuts to funding received by the offshore wind sector would harm the Humber’s chances of developing a world-class renewables hub, an industry leader has warned.
Sam Pick, of the Renewables Network, said today’s announcement by the Government, to consider reducing the subsidies available for wind energy, will “place more pressure” on the industry.
It comes as the Humber region looks to be a capital for offshore wind companies, with turbine manufacturers and operators identifying Hull and Grimsby as possible UK bases. The area is just 12 hours’ sailing time from giant wind farms planned for the North Sea, known as Round Three sites.
But Mr Pick, who is business development director of the Renewables Network – a Humber-based organisation that helps companies enter the green energy market – said: “While we appreciate the significant level of support the offshore wind sector receives from the Government, a cut cannot be spun as positive.
“The margins behind offshore wind investment are already tight and a cut will make it harder for projects to progress.
“We have the opportunity to provide energy independence for the UK and build a world-leading industry, but this cannot be achieved without solid, dependable and predictable government support.”
Green electricity receives support though a scheme called Renewables Obligation Certificates (ROCs).
The Government consultation on banding levels for the subsidies, announced by the Department of Energy and Climate Change today, suggests decreasing the amount of support offshore wind receives, over the next five years.
Mr Pick said: “A reduction of 0.2 of a ROC for offshore wind in 2016 would make more projects in the ambitious Round Three offshore wind farms marginal.
“Developers are already seeking 30 per cent cost reductions to make them viable under the current ROC banding.
“This announcement essentially places more pressure on the industry.”
He added: “If we are to meet the demands of the sector, Humber-based businesses need to expand.
“However, in a very tight credit market, small and medium-sized businesses across the Yorkshire and Humber region need all the support they can from government if we are to meet the challenge.
“If the Government doesn’t wake up and smell the coffee we will continue to lose out on to Europe in the renewables race.
“At present, 80 per cent of the money spent on British offshore wind farms goes to non-British businesses. This is because European governments supported the industry in its very early stages.
“We are playing catch up and the UK Government needs to take its foot off the brakes.”
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Source: footprintrenewables, October 21, 2011