UK offshore wind budget slashed by £200M, analyst warns of missed targets
Britain has announced a reduced budget for offshore wind in its upcoming auction, aiming to stimulate investment in renewable energy.
However, government documents released Monday indicated that an analyst believes this move will make it difficult for the country to achieve its clean power objectives, according to a Reuters report.
The upcoming auction round for offshore wind projects in Britain will see a substantial reduction in the allocated budget for traditional, fixed-bottom installations.
Budget decline
Documents released on Monday revealed that the budget has been set at 900 million pounds, a decrease from the 1.1 billion pounds allocated in the previous year.
This significant cut of 200 million pounds could have implications for the development of new offshore wind farms, potentially impacting the pace of the UK’s renewable energy transition targets.
The reduction suggested a possible shift in government priorities or a re-evaluation of investment strategies within the renewable energy sector, particularly concerning the more established fixed offshore wind technology.
Further details surrounding the rationale for this budget decrease and its potential long-term effects on project viability and investor confidence are anticipated.
An additional £180 million is allocated to early-stage floating wind technology.
This year, unlike last year, it has a dedicated budget and will not have to compete with other developing technologies such as tidal and geothermal.
Britain’s goals
Britain is aggressively pursuing a decarbonisation strategy for its electricity sector, with a firm target of achieving this by 2030.
A cornerstone of this ambitious plan is the substantial expansion of its offshore wind power capacity.
Currently, the UK’s offshore wind capacity stands at approximately 15 gigawatts (GW).
However, by the end of the decade, the government aims to significantly boost this to a range of 43-50 GW.
This massive increase underscores a clear commitment to renewable energy sources as a primary means of transitioning away from fossil fuels and securing a sustainable energy future.
This focus on offshore wind is driven by its immense potential, given the UK’s extensive coastline and favorable wind conditions, positioning it as a global leader in this technology.
Auctions and funding
To facilitate project development, annual auctions are conducted where renewable power developers are offered Contracts for Difference, guaranteeing a fixed price for their electricity.
“Our competitive new auction process will allow us to buy the right amount of clean power at the right price,” British Minister for Energy Michael Shanks was quoted in the Reuters report.
According to Pranav Menon, a senior researcher at Aurora Energy Research, the proposed funding will probably be insufficient for the country to achieve its clean power goals.
Securing approximately 4.9 GW of new capacity is probable if this year’s auction achieves prices comparable to last year’s, he stated.
Additional funding will be allocated to other renewable energy projects, including geothermal and tidal stream technologies.
However, the government has not yet disclosed the specific budget for these initiatives.
The auction held last year allocated a total budget of £1.5 billion across all technology types, with £1.1 billion specifically earmarked for fixed offshore wind projects.
The post UK offshore wind budget slashed by £200M, analyst warns of missed targets appeared first on Invezz