Written by Evan Byrne, Account Manager in Madano’s Energy practice.
Good news! The UK Government is getting behind wind energy in a big way, in the hope that the renewable energy source will provide a third of the UK’s electricity by 2030.
The Wind Sector Deal will achieve this by:
- Providing forward visibility of future Contracts for Difference rounds with support of up to £557 million
- Getting the sector to commit to increase UK content in projects to 60 per cent by 2030
- Increasing representation of women in the offshore wind workforce to at least a third by 2030
- Setting an ambition of increasing exports fivefold to £2.6 billion by 2030
- Getting the sector to invest up to £250 million in building a stronger UK supply chain
Who could argue against that?
Isn’t it also great to see the same UK Government that’s been accused by some in the media about being indecisive about energy policy over the past few years (nuclear power anyone?), become suddenly so decisive, and defiantly state that offshore wind is the future and that’s that?
But when we take a look past the headlines – which admittedly are very exciting – there are a few things which ought to give us pause for thought. Primarily, this is an ambition, nothing more.
The wording is actually very careful because there’s no real clarity on how these targets will be met. The targets are dependent on modelling, which shows wind as a much larger potential proportion of capacity than before.
Now, this is not to say that supporting offshore wind is not necessarily a good thing; the UK is a genuine world leader in offshore wind, the sector is a major growth area for the UK, and more wind will ultimately be good for helping tackle climate change.
Yet, there’s a strong argument that Government should not be supporting a proven technology which is very capable of standing on its own two feet already.
Despite being one of the world’s largest markets for offshore wind, the UK has never delivered an offshore wind project subsidy free. But we are getting closer. Therefore, some might suggest that as the industry approaches the era of subsidy free, companies might start to disengage. So to keep them interested, Government has had to act.
Which is why it is making up to £557 million available for offshore wind.
As you read through the Wind Sector Deal, it becomes increasingly clear, that while laudable, the sector deal is largely aspirational, in terms of both targets and levels of support.
Problematically, it could create the impression that the UK Government is throwing its weight behind wind at the expense of other types of energy generation, which could have a negative impact on those other sectors.
So on the one hand, Government keeping a massive industry happy makes sense. This is normal across many sectors.
On the other hand, a merely aspirational deal which identifies wind energy as ‘first among equals’ in the renewable energy space risks alienating less developed industries and technologies as funding might be diverted from supporting new technologies to a proven one.
This doesn’t feel like good policy making when the UK is on the hook to decarbonise as quickly as possible to meet legal commitments to reducing carbon emissions.