United Kingdom

United Kingdom

Government plan puts UK offshore investment 'at risk'

UK: The UK government's Electricity Market Reform plans leave a "high degree of uncertainty" and could damage investment in offshore wind, the Committee on Climate Change has warned.

Secretary of  state for energy and climate change, Ed Davey
Secretary of state for energy and climate change, Ed Davey

The advisory body said in a letter to secretary of state for energy and climate change Ed Davey that plans beyond 2020 fail to commit to offshore wind. They also allow for scenarios with minimal investment in the sector.

While the letter welcomed the recent publishing of the delivery plan, which sets out the policy mechanisms up to 2020, it criticises the lack of clarity beyond then.

"Industry has been very clear that more certainty is required to support supply chain investment, which is a necessary condition for competition, innovation and cost reduction," the committee said.

The proposed strike prices for offshore wind also come under fire, with the government apparently counting on unrealistic cost-reduction projections.

"Our analysis suggests a degression closer to £5/MWh (rather than [the government's figure of] £15/MWh) between 2016/17 and 2018/19 is more likely to be appropriate."

These factors, together with the apparent reduction in ambition for 2020 to around 8-10GW, are characterised by the committee as blocking investment in the UK offshore market.

This seems to be borne out in the government's record in attracting manufacturers to Britain. Siemens, Gamesa, Alstom and Areva are among those who have outlined plans to built factories in Britain but have been unable to commit to due the uncertainty surrounding the EMR.

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