United Kingdom

United Kingdom

"Timelines" published for each UK offshore wind farm

New CfD-based support system risks delaying projects

A chart detailing how quickly each of the UK's offshore wind projects is expected to reach full operational phase has been published by trade association, RenewableUK.

The Offshore Wind Project Timelines 2012 chart provides an indicative schedule for 53 offshore wind projects – including individual phases of larger projects - being developed in UK waters. Separate schedules are provided for large projects with multiple phases, such as Dogger Bank or Firth of Forth. The chart has been produced to offer the offshore wind supply chain "greater visibility".

Much attention has focused recently on the risk of delays due to contracting inefficiencies, and bottlenecks and gaps in the supply chain.

A quieter, but increasingly-urgent concern of companies developing Round 3 projects is the risk that the UK government's plan to overhaul the way it provides financial support to low-carbon electricity generators could make it far more difficult to attract the investment necessary to reach financial close and proceed with construction.

The new regime will be introduced as part of the UK government's programme of electricity market reform (EMR).

Some developers believe there is a real risk that the new financial support regime, which will be based around feed-in tariffs (FiTs) with contracts for difference (CfDs), could put off investors, particularly new investors without experience of investing in UK renewables. The new support scheme is viewed by some as highly complex and likely to make it more difficult for potential backers to judge UK projects' return on investment.

A 90-page draft operational framework outlining preliminary ideas about how the FiT CfDs will operate was published in late April. With the UK Department of Energy and Climate Change having set itself a deadline of mid-2014 for the new regime to enter into force, negotiations over the next two years between developers and policymakers will be highly significant in determining whether the projects listed on RenewableUK's chart keep to schedule.

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