‘Disappointing’ AR7 Budget Undermines UK’s Offshore Wind 2030 Target, Says Industry

Several industry organisations expressed dissatisfaction with the UK government’s offshore wind budget for Contracts for Difference (CfD) Allocation Round 7 (AR7), with WindEurope calling it “disappointing”.

WindEurope described the UK government’s GBP 1.08 billion budget as disappointing, saying it undermines the growth of the country’s offshore wind sector and could affect the wider European industry.

The UK has 12.5 GW of offshore wind capacity in operation and a 50 GW target for 2030. With only two auction rounds left to reach that goal, the current budget could leave the country far behind schedule, added WindEurope.

“Crucially, with this budget, the UK would miss out on £53 billion in private investment and 45,000 jobs.  Every gigawatt of offshore wind brings £2–3 billion to the UK. And they’ve got the projects ready to deliver these benefits. More than 20 GW of offshore wind are ready to bid in this auction.  But only around a quarter of those would actually go forward with this budget,” said the organisation.

“This budget risks severely restricting the growth of offshore wind in the UK. There are lots of good projects waiting to be built, and consumers and industry want the cheaper electricity that they’d bring. But with this initial budget proposal, only a quarter of the projects will get through,” added Giles Dickson, CEO of WindEurope.

RenewableUK’s executive director of policy and engagement, Ana Musat, said that the budget will not maximise investment in new offshore wind farms.

“We have a record amount of offshore wind capacity eligible for this auction – more than 20 gigawatts – and the current budget would only procure about a quarter of that. Given the amount of competition in this year’s auction, we expect to see competitively-priced bids, so the Government should adjust the budget to maximise procurement, which could attract up to £53 billion in private investment in the UK economy,” added Musat.

“It’s important that this allocation round supports further development of floating wind technology. Early investment in these demonstration-scale projects will help build up supply chains and bring down costs to enable us to scale up in the next decade.“

Claire Mack of ScottishPower Renewables said this year’s auction will be crucial for driving new growth in Scotland’s offshore wind sector and capitalising on existing supply chain investments. She warned that if the round fails to deliver, it could jeopardise Scotland’s energy security and future industry growth.

“A record amount of capacity is eligible for AR7 and this fierce competition will ensure new capacity is secured at the best possible value to consumers, despite increasing global cost pressures. The budget announced today would significantly restrict that value from reaching consumers and communities. We urge careful consideration to ensure the final budget best delivers on our long-term national interests,” added Mack.

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