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UK Offshore Wind Industry Decisions Needed for 2020

Decarbonisation will require next parliament to set up systems for sector to achieve best results

Offshore wind turbines

Offshore wind turbines

The UK has a world-leading offshore wind industry. This country has deployed more offshore wind power than any other country: 3.7GW, or 3.5% of total electricity generation. This will mean jobs and an estimated £1.8 billion investment per year, a new report suggests. However difficult decisions need to be taken in the next parliament if the sector is to contribute to its decarbonisation targets. The report highlights fears that these targets will not be met due to changes in the policy framework.

Matthew Spencer, Director of the Green Alliance which published the report, says, “Policies are out of kilter with the political cycle. We need a “Commit and Review” process, not a “Wait and See” process.” The UK should have up to 25GW of offshore wind by 2030 to do the “heavy lifting” of decarbonising its energy system. However the report analyses the complex structure of commissioning and the supply chain, and sees areas where this could come unstuck. It suggests five critical policy refinements which would reduce risk and ensure that the target is met.

1. Set a decarbonisation target for the sector. This would reduce uncertainty and therefore financial risk.

2. Confirm the size of the Levy Control Framework (LCF) – the amount of subsidy to the sector by 2017.

3. Set dates for the Electricity Market Reform (EMR) allocation rounds, again to reduce uncertainty.

4. Encourage a steady trajectory for the industry by setting offshore wind deployment minima, to avoid a cycle of “boom and bust”.

5. Identify new ways to rebalance risks. Currently the sector is too risky and the balance of risks between government and developers should be made fairer, drawing on European experience.

The development of a larger offshore wind industry including manufacturing in this country would have significant benefits for the economy including jobs and exports, as well as helping to reach the carbon reduction targets required. The report concludes, “In return for greater certainty, the government should expect a sustained reduction in the cost of electricity generation and continued growth in investment and UK jobs.”

Report

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