Whilst there wasn’t much, or any, push from Hunt’s budget relating to how it plans to tackle climate change there was some thought to energy security, further to what was touched on in the Kings Speech in November. As such, to further incentivise renewable energy development to the UK, the key details of the Contracts for Difference (CfD) round 6 auction have been shared.
For this latest round there has been a budget allocation worth just over £1bn, £800m specifically for offshore wind. This is the largest ever allocation and certainly a welcome promise to developers, and in turn consumers. The auction is set to take place later this month, March 27th (with full details of the parameters due for release on 13th March). Last years’ auction failed to secure any new projects, but this new allocation looks more likely to pique greater interest.
Whilst this looks promising for the investors and security for the next year, analysts are warning that it may be too little, too late, to meet the climate target. To reach the targeted 50GW of power from offshore wind by 2030, there needs to be a further 21GW of new capacity, in addition to the 14GW currently under construction and 15GW in operation. But LCP Delta, via Carbon Brief, calculate this as only 4-6GW of new capacity.
Regardless of how far that pot stretches, a key take away from the allocation is a renewed price stability for developers, keeping continued investment in offshore wind attractive. Andrew Bowie, Minister for Nuclear and Renewables, states ‘this unprecedented renewables budget…will keep the UK at the cutting edge of the industry’, giving the UK the security it wants. It will also provide an opportunity for up to 90,000 more jobs in offshore wind. A very welcome headline to our agency!
Overall, the headlines, as ever, have conjured up mixed interpretations and feeling towards the budget but the crux is positive. There is more money allocated to driving offshore wind farms forward in the UK – an already global pioneer in the industry.
It doesn’t go all the way, but some, and it will help future proof the supply chain and, eventually, meet climate needs – but perhaps not their own targets!
