Uncertainty about planned changes to UK energy policy does not mean that the government is relaxing its support for offshore wind. "We are determined to remain the world’s leading market for investment in offshore wind," said energy minister, Ed Davey, speaking to Windpower Offshore.
Davey added that plans to introduce a new system in support of low-carbon generation – via contracts for difference (CfDs) - will not be introduced without further discussions with developers. Offshore wind sector players will be invited to provide feedback on CfDs later this year.
Unveiling the results of a thorough review by the UK Department of Energy and Climate Change (DECC) of financial support provided to more than 30 forms of renewable energy technologies, Davey said that evidence had driven decision making - not politics. "We have looked very hard at the evidence for each technology," he said.
A mooted 25% reduction in financial support for offshore wind from 2014/15 has been rejected, in favour of a slower and more moderate cut between now and 2017. This decision may have been influenced, in part, by results of two recently-concluded investigations into UK offshore wind’s cost of energy.
Leading offshore wind developer, Dong Energy, has welcomed DECC’s decision on the level of financial support that will be provided to UK offshore wind projects that reach the stage of negotiating support packages over the next five years.
"The results of the review show that the Government has considered the solid evidence provided by the industry and made the right decision," said the developer. It added that "publication of the banding review gives us more confidence to continue our UK focus and also helps to build investor confidence". With more than 750MW already in operation off UK shores, Dong is likely to install a further 1.8GW during the 2014-17 period.
Offshore wind was the "clear winner" in DECC's review, agreed Arnaud Bouillé, a director at Ernst & Young, speaking with Windpower Offshore. "The gradual step-down in support for offshore wind is a bit symbolic, but sends a signal to the industry that it needs to work on its costs."
The UK offshore wind sector is "on path" to deliver 18GW of installed capacity by 2020, commented Bernard Bulkin, chair of DECC’s office for renewable energy deployment. Bulkin added that another "at least" 18GW could be installed during the 2020s.