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The UK Government has announced a\u00a0low\u00a0budget\u00a0for its next offshore wind auction round\u00a0(Allocation Round 7,\u00a0\u201cAR7\u201d). This is disappointing.\u00a0It\u00a0undermines the growth of offshore wind in the UK \u2013 and the outlook for whole of Europe\u2019s offshore wind industry.<\/p>\n
The UK Government has today announced an\u00a0initial budget for the next offshore wind auction round (Allocation Round 7, or AR7).\u00a0The initial proposed budget is \u00a3900m for conventional bottom-fixed offshore wind and \u00a3180m for floating wind.\u00a0 This would \u201cbuy\u201d only 5 \u2013 6\u00a0GW of capacity in the auction.\u00a0The UK currently has 16.6 GW in offshore wind and wants 50 GW by 2030. They have only this auction and the one next year to deliver that. The proposed budget\u00a0would leave the UK\u00a0falling\u00a0well\u00a0short.<\/p>\n
Crucially,\u00a0with this budget, the UK would miss out on \u00a353 billion in private investment and 45,000 jobs.\u00a0Every gigawatt of offshore wind brings \u00a32\u20133 billion to the UK.\u00a0And they\u2019ve got the projects ready to deliver these benefits.\u00a0More than 20\u00a0GW\u00a0of offshore wind are ready to bid\u00a0in this auction.\u00a0But\u00a0only around a quarter of those would actually go forward with this budget.\u00a0 \u00a0<\/p>\n
The initial budget announced for AR7 isn\u2019t a fixed amount of money that will definitely be spent.\u00a0Instead, it sets a maximum limit for how much the government is willing to support through the auction. The actual cost will depend on future electricity prices. For example, in a previous round (AR2), the government set aside \u00a3290 million, but because electricity prices rose sharply during the energy crisis, the projects actually paid back \u00a3120 million to consumers.<\/p>\n
The government has also set a maximum price it\u2019s willing to pay for electricity from these projects: \u00a3113 per megawatt-hour for bottom fixed offshore wind\u00a0and \u00a3271 per megawatt-hour for floating wind. These prices reflect the fact that floating wind is still a newer and more expensive technology.<\/p>\n
The UK leads the rest of Europe in offshore wind.\u00a0An auction with these lower volumes than expected would undermine that leadership.\u00a0And ti would impact adversely on the wider UK and European wind energy supply chain, which is counting on big volumes in AR7.\u00a0 \u00a0\u00a0<\/p>\n
Quote from Giles Dickson, CEO of WindEurope:<\/p>\n
\u201cThis 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\u2019d bring. But with this initial budget proposal, only a quarter of the projects will get through.\u00a0\u00a0That would be a big missed opportunity for the UK.\u00a0\u00a0They\u2019d miss out on millions in investment and thousands of jobs.\u00a0It would undermine the UK\u2019s leadership on offshore wind.\u00a0\u00a0 And impact negatively on the whole of the UK and European wind supply chain.\u201d\u00a0\u00a0\u00a0\u00a0<\/p>\n
Next Steps<\/p>\n
The sealed bidding window for offshore wind technologies in AR7 is scheduled to take place between 11 and 17 November, with results to be announced on 14 January.<\/p>\n","protected":false},"excerpt":{"rendered":"The UK Government has announced a\u00a0low\u00a0budget\u00a0for its next offshore wind auction round\u00a0(Allocation Round 7,\u00a0\u201cAR7\u201d). This is disappointing.\u00a0It\u00a0undermines the…\n","protected":false},"author":2,"featured_media":231225,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[2926,84,1294,12543,56,54,55],"class_list":["post-231224","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-auction","tag-business","tag-economy","tag-offshore","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/231224","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=231224"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/231224\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/231225"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=231224"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=231224"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=231224"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}