UK: Energy Bill to Boost Offshore Wind Sector

Energi Coast, North East England’s Renewables Group, believes the upcoming Energy Bill will inject confidence into the offshore wind sector, but warned that delaying setting decarbonisation targets could jeopardise investment after 2020.

Ahead of the publishing of the Energy Bill, due next week, the Government has revealed it will provide £7.6billion towards low carbon electricity infrastructure by 2020, including offshore wind.

This news will be welcomed by investors that have delayed decisions about investing in offshore wind projects as well as the supply chain, which has been poised to support the next stage of Round 2, Round 2.5 and early Round 3 UK wind farms.

In addition, the Energy Bill will confirm the Government’s commitment to achieving a balanced energy future utilising a mix of hydrocarbon and renewable resources, which is a position supported by Energi Coast.

It is hoped the confidence delivered by the Bill will create the opportunities required by the offshore renewables supply chain including the companies represented by Energi Coast.

Energi Coast, which is made up of a steering group of 24 North East companies, says that the region is primed to support the delivery of offshore wind projects.

Already Energi Coast companies have invested, between them, £400m in offshore wind activities and employ around 6,000. The group predicts that a further 2,000 jobs could be created in the region if the stability and clarity can be achieved in the industry.

However, there is a concern that investment decisions post-2020 will be affected, which will impact on the large Round 3 projects, many of which will still be under construction in eight years’ time.

The Bill will not include a limit for the amount of carbon dioxide that can be emitted per megawatt hour of power from the electricity sector by 2030, which may lead to developers of Round 3 wind farms facing decarbonisation target issues if the next government uses the powers placed in the Bill to set a target in 2016 after the next election.

 Alex Dawson, Chairman of Energi Coast, said: “It appears the Energy Bill will bring much needed clarity to the offshore wind sector that will drive investment and create opportunities for the supply chain.

 “The North East is already a key location for offshore renewables activities with companies successfully serving early projects in the sector. Following the publishing of the Bill, momentum will build in the market and the next stage of projects will begin to come online with support from our supply chain, which is poised and ready to go.”

Alex added: “While the arrival of the Bill is welcomed, the political infighting that has led to compromises being made in its content are concerning. Eight years is not long enough to introduce an effective energy infrastructure. The Government has created a cliff edge as debates over decarbonisation will continue, which will become a future election issue and potentially disrupt the confidence of investors and operators.”

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Press release, November 23, 2012; Image: energicoast