New UK government auctions set to begin May next year will allow offshore energy companies to bid for subsidies which will cover the additional cost involved with maintaining wind farm projects not on the mainland
A new UK government scheme will compensate offshore renewable energy developers for the increased cost of building wind farms away from the mainland.
Companies can become eligible for financial subsidies by competing at new auctions as part of the Contracts for Difference (CfD) initiative starting in May 2019, with auctions every two years therein set to provide up to £557m in support.
With the amount of offshore wind around the UK set to double over the next ten years, experts predict that local communities in Scotland, which account for much of Britain‘s offshore capacity, will be transformed.
The scheme could provide up to two additional gigawatts (GW) of offshore wind per year in the 2020s, bringing total capacity up to 30GW by 2030 from current levels of 7GW in operation, and 7GW in construction.
Industry body RenewableUK’s chief executive Hugh McNeal said: “Boosting our ambitions for offshore wind is win-win for consumers, as the industry’s success at cutting costs mean that offshore wind is now one of the cheapest options for new power in the UK.
“Today’s announcement confirming the budget and timing of new auctions sets us on the path to deliver the tens of billions of pounds of investment that will be needed to meet our ambition of at least 30 gigawatts by 2030.
“This is good news for the domestic supply chain, which can look forward to a pipeline of new offshore wind projects that will support tens of thousands of jobs across the UK.”
UK offshore renewable energy: Scotland to benefit
The CfD scheme will provide electricity generators with a stable revenue, while ensuring customers are protected against rising bills.
This comes as great news for Scotland, which has proven ideal for wind power given the blustering conditions.
UK ministers have now confirmed that wind farms in far-flung areas such as Shetland and Orkney will be able to benefit by competing for the upcoming subsidy auctions.
UK minister for Scotland Lord Duncan said: “Wind projects in the remote islands of Scotland have the potential to generate substantial amounts of electricity and cut emissions, supporting economic growth and delivering lasting benefits for communities.
“Enabling these projects to compete in future auctions will reinforce the UK’s position as a world leader in renewable generation, as well as providing Scottish jobs in any projects supported.
“I urge local communities, developers and other stakeholders to work together to ensure that such projects deliver lasting benefits to the islands.”