Out-Law / Your Daily Need-To-Know
The UK government will invest in offshore wind power generation, with a view to "powering every home in the country" in the next decade, the prime minister has said.
Speaking at the Conservatives' virtual party conference, Boris Johnson announced plans to make the UK a "world leader" in offshore wind through increased investment, new jobs and more ambitious energy generation targets.
Johnson said: "As Saudi Arabia is to oil, the UK is to wind – a place of almost limitless resource, but in the case of wind, without the carbon emissions and without the damage to the environment".
The announcement is the first to come from the government's "ten-point plan for a green industrial revolution", full details of which will be published later in the year. This programme will set out targets and planned investment towards the UK's goal of achieving net-zero carbon emissions by 2050.
The government has increased its previous target of 30GW to 40GW of UK electricity usage to be produced by offshore wind by 2030. Johnson also announced a new target for floating offshore wind in deeper waters to deliver 1GW of energy, or over 15 times the current volume produced worldwide, by 2030.
Melanie Grimmitt
Head of Clients and Markets
There is now an urgent need for delivery of the long-promised Energy White Paper and commitment to sufficient contracts for difference or alternative routes to market and fiscal stimulus to deliver this target.
The government intends to double the capacity of renewable energy generation supported by its contracts for difference (CfD) subsidy mechanism when the next auction round opens in late 2021. It is also committing £160 million of investment to upgrade ports, infrastructure and manufacturing capability in areas where offshore wind generation is located including sites in northern England, Scotland and Wales.
Energy law expert Melanie Grimmitt of Pinsent Masons, the law firm behind Out-Law, welcomed the announcements.
"We see the ambitious target of 40GW of offshore wind by 2030 as vital not only to power homes but also to support the development of the low carbon - particularly hydrogen - economy," she said. "However, there is now an urgent need for delivery of the long-promised Energy White Paper and commitment to sufficient contracts for difference or alternative routes to market and fiscal stimulus to deliver this target," she said.
UK offshore wind currently produces around 10GW of energy, the largest installed capacity of offshore wind in the world. Newer 'floating' offshore wind, as envisaged by the UK government, can be installed further out to sea and in deeper waters than traditional fixed arrays, in order to take advantage of stronger winds.
In his speech, Johnson emphasised the role to be played by UK construction and manufacturing in delivering increased capacity. However, Melanie Grimmitt warned that increased 'local content' requirements could push up prices.
"It will be difficult for UK manufactured content to be competitive with other global manufacturing markets in the Gulf and Asia but it may help an otherwise stretched supply chain and there may be an opportunity to take a lead in manufacturing of components for floating offshore wind," she said.
Projects expert Gareth Phillips of Pinsent Masons warned that delivery of offshore wind on the scale envisaged by the government would require "significant change" to planning regulations, particularly those around protected habitats.
"As things stand, we can expect each new offshore wind farm to undergo a Habitats Regulations assessment and be required to deliver compensation measures at project level, which is a significant challenge," he said.
"To deliver on the aim to power all homes by offshore wind by 2030, the government must take a robust strategic approach to HRA and compensation measures – tackling these issues on a piecemeal basis at project level is not sustainable and would undermine the green recovery," he said.
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