Keith Anderson, CEO of ScottishPower Renewables, addressed the Renewable UK Global Offshore Wind Conference in London today.
He called for stable regulation and close working between the industry and the Government in order to ensure that the UK gains the maximum benefits from the offshore wind power industry.
In his speech, Keith Anderson said: “The UK energy sector is on the cusp of being transformed. From the era of King Coal and dash for gas we saw in the 20th century, the 21st will be era of renewables.
“However, there’s a long way to go. Offshore only accounts for a small percentage of the world’s total wind power. It is still a new industry, which at present relies on financial support to make it economic to build and operate. But that will change, and quickly. To be clear, we want to see subsidies phased out, and for the technology to compete on equal terms with mainstream generation. We can’t expect governments to continue providing support indefinitely, especially in economically constrained times globally.
“The good news is that costs are already coming down. For example our East Anglia One project has seen costs reduce sharply and we secured a contract for difference at under £120 per MWh recently. This is a lower price than many people thought possible and was a clear illustration of the progress that we are making. We are confident that we can get offshore generation costs below £100/MWh by 2020 – and beyond that parity with traditional generation will be in target range.
“In this sector, to deliver cost reductions and wider economic benefits, we need stability of government policy. The renewable energy sector has without doubt been impacted by abrupt and often unexpected changes in policy direction over recent years. Just last week we saw the UK Government opt to end its Renewable Obligation support mechanism a year earlier than scheduled. We welcomed the fact that grace periods are being allowed for projects where there has been a substantial commitment made, but we remain disappointed at the decision.
“Stability and predictability allows the industry to plan and invest far into the future with confidence – not just developers but manufacturers and service companies across the supply chain too. This industry needs to be given the right conditions to invest for the long term in innovation and large scale industrialisation.
“Stability is our ask, but growth for the UK is our offer. Already, in the UK alone, offshore wind is supplying enough power for four million homes and has attracted more than £12 billion in private sector funding, supporting thousands of UK jobs.
“Emissions can be cut, vast quantities of renewable power can be generated, the economy and UK jobs can receive a fantastic boost, and costs can be driven down rapidly for consumers. But securing all this will require teamwork and the industry and government both need to pull together.”