In the run-up to the Chancellor’s Autumn Statement on 5th December, RenewableUK is urging the Government to strengthen its support for offshore wind energy by adopting a series of proposals outlined in a thought-provoking new position paper published today, “Offshore Wind: Decision Time”.
The document was written by Charles Ogilvie, former Chief of Staff to the Energy Minister Gregory Barker. In it Mr Ogilvie explains how the offshore wind sector faces “an unprecedented challenge” as it strives to ensure that rapid and successful growth is maintained, and momentum isn’t lost.
The need to create confidence among investors, as well as continuing to drive down costs, are seen as the keys to unlocking further growth. However, the document warns that mixed messages from politicians about support for offshore wind are having an impact on future investment.
Various Government departments have put forward a range of scenarios suggesting how much offshore wind could be installed by 2020, ranging from 8 gigawatts to 16GW. Surveying the range of detailed forecasting that has been done to date, the document identifies a tipping point of between 13 and 17GW to ensure the sector can achieve economies of scale, and bring wind turbine manufacturers to the UK to open factories here rather than abroad.
The document also suggests that the Government should commit to a minimum installed capacity target for offshore wind within the Levy Control Framework (the Government’s budget for spending on renewables). There is no such target at present. A minimum should not be an end in itself Mr Ogilvie argues, rather a means that will demonstrate that the sector is deploying at a rate that can achieve the cost reductions to deliver a return on the investment taxpayers have made in the sector to date.
Mr Ogilvie also recommends that the proposed level of financial support for offshore wind should drop less steeply between 2017 and 2020 than is mooted in the Government’s draft strike prices. The level of support currently falls too fast to allow the industry to grow healthily, meaning that Britain risks losing the massive industrial benefits that offshore wind offers. The level of support should be reduced more gradually up to 2020, so that it could potentially fall faster after that date, when the industry is big enough to bear such cuts.
RenewableUK’s Director of External Affairs, Jennifer Webber, said “The title of the document, “Decision Time”, says it all; the Government must decide whether it’s fully committed to reaping the benefits of clean energy and job creation that offshore wind offers. It’s not rocket science to say that if we want to bring big wind turbine manufacturers to the UK, we need to get the level of financial support for the industry right. We need to reach that sweet spot where the price is set at a realistic level to unlock investment and growth. That’s why we’re calling for the Chancellor to make his support for offshore wind clear in his Autumn Statement”.
Press release, November 28, 2013