Government denies policies are stalling offshore wind developments
The government has rejected accusations that its policies are stalling offshore wind development and that the UK could lose its lead in generating capacity by 2015 as a result.
The UK is looking to expand its 1.5GW of offshore wind energy capacity to around 18GW by 2020 as the giant Round 3 wind farms come online, and the government unveiled electricity market reforms and a Renewables Roadmap in July setting out how to achieve these goals.
But research drawn from recent studies showed that just 300km of offshore cables are currently on order for planned UK developments, compared to almost 2,000km for German projects.
Consultancy firm Enventi, which compiled the research, said the gap between the two countries showed that investor uncertainty over planned government reforms is creating a delay between projects currently in construction and those already given consent.
“Despite what the government has said about transitional measures protecting investment, it appears that uncertainty arising from Electricity Market Reform is preventing consented projects achieving financial close and proceeding to construction,” said Scott Macknocher, general manager at Enventi.
Germany is set to install a High-Voltage Direct-Current (HVDC) network to link clusters of offshore wind farms, and Macknocher warned that the UK could be left behind over the next decade.
“This hiatus in the UK will be a crucial factor in the race to install the next phase of offshore wind farms in north western Europe,” Macknocher said.
“Germany is already well advanced in the installation of an integrated HVDC network … and it is likely that this groundwork will allow Germany to surpass the UK as the world leader in installed offshore wind capacity sometime between 2015 and 2020.”
But the government denied that its package of reforms had deterred investment. A Department of Energy and Climate Change spokesman told BusinessGreen that the country is still rated as a top destination for investment in low carbon infrastructure, citing a Deutsche Bank report from July that praised the transparency, longevity and certainty of the UK’s policy framework.
The spokesman added that the policy of selling licences to run offshore cables meant that operators would typically order cables only when the wind farms are close to exporting power.
“The UK, unlike Germany, has introduced a market approach for the construction, operation and management of offshore transmission,” he said in a statement. “Comparisons of supply contract orders should take this into account.”
Trade body RenewableUK also expressed scepticism at the findings, saying that German power cables need to be longer as environment conditions force them further from the shore than UK wind farms. This also means a greater proportion of German cables are likely to be HVDC, which have significantly longer order timelines.
The UK is looking to expand its 1.5GW of offshore wind energy capacity to around 18GW by 2020 as the giant Round 3 wind farms come online, and the government unveiled electricity market reforms and a Renewables Roadmap in July setting out how to achieve these goals.
But research drawn from recent studies showed that just 300km of offshore cables are currently on order for planned UK developments, compared to almost 2,000km for German projects.
Consultancy firm Enventi, which compiled the research, said the gap between the two countries showed that investor uncertainty over planned government reforms is creating a delay between projects currently in construction and those already given consent.
“Despite what the government has said about transitional measures protecting investment, it appears that uncertainty arising from Electricity Market Reform is preventing consented projects achieving financial close and proceeding to construction,” said Scott Macknocher, general manager at Enventi.
Germany is set to install a High-Voltage Direct-Current (HVDC) network to link clusters of offshore wind farms, and Macknocher warned that the UK could be left behind over the next decade.
“This hiatus in the UK will be a crucial factor in the race to install the next phase of offshore wind farms in north western Europe,” Macknocher said.
“Germany is already well advanced in the installation of an integrated HVDC network … and it is likely that this groundwork will allow Germany to surpass the UK as the world leader in installed offshore wind capacity sometime between 2015 and 2020.”
But the government denied that its package of reforms had deterred investment. A Department of Energy and Climate Change spokesman told BusinessGreen that the country is still rated as a top destination for investment in low carbon infrastructure, citing a Deutsche Bank report from July that praised the transparency, longevity and certainty of the UK’s policy framework.
The spokesman added that the policy of selling licences to run offshore cables meant that operators would typically order cables only when the wind farms are close to exporting power.
“The UK, unlike Germany, has introduced a market approach for the construction, operation and management of offshore transmission,” he said in a statement. “Comparisons of supply contract orders should take this into account.”
Trade body RenewableUK also expressed scepticism at the findings, saying that German power cables need to be longer as environment conditions force them further from the shore than UK wind farms. This also means a greater proportion of German cables are likely to be HVDC, which have significantly longer order timelines.
You can return to the main Market News page, or press the Back button on your browser.
