8 September, 2023
Daily Express, by Christian Calgle
Britain’s goal of reaching 50GW of offshore wind by 2030 may now be at risk after the Government were left humiliated in the latest contract auction round.
Not a single energy company submitted bids in the Government’s annual offshore wind auction, after Mr Sunak ignored warnings that the offered price was now too low to reflect the soaring cost of making turbines.
While wind is still significantly cheaper than than new gas plants, the war in Ukraine has cost core materials such as steel, aluminium and copper to skyrocket, hurting eco manufacturers.
Today’s auction announcement could have led to an extra five gigawatts of wind power, enough to power five million homes.
Instead consumers will now miss out on savings of up to £1 million a year as they’re forced to rely on more expensive gas.
Only projects offering the lowest cost to energy-bill payers are awarded contracts by the Government.
Ministers use a mechanism called ‘contracts for difference’, which guarantee consumers will pay a fixed price for the energy generated by the bidder.
When wholesale prices are lower, subsidies are added onto bills to top up the difference. When they are higher, developers pay back the difference.
Because of fluctuating energy prices and soaring construction costs, it appears firms were unable to offer the low prices Government wanted.
This morning, Britain Remade - a campaign promoting economic growth in Britain - slammed the Government for complacency and incompetence.
The group’s campaign director, Sam Richards, blasted Mr Sunak and said it was a “catastrophic outcome”.
“Yet because of the war in Ukraine the costs of core materials used in offshore turbines such as steel, aluminium and copper have skyrocketed, as they have for businesses across the economy.
“Despite this, Ministers and mandarins decided to ignore warnings from the industry that this would mean, for a short time, the cost of offshore wind would rise - while still being significantly cheaper than new gas plants.
“By capping the price the sector could bid at too low, Government set it at a level that made it impossible for investors to meet their costs. This will condemn consumers to higher bills than necessary and means Britain loses out on vital jobs and billions in investment.
“At the same time as the Government capping the price at an unrealistic level, ministers have also failed to deliver the necessary planning reforms that will speed up delivery and cuts costs. It cannot be right that it takes up to 13-years to build an offshore wind farm, when construction takes only two years.”
Labour’s net zero spokesman Ed Miliband said the Tories have “now trashed the industry that was meant to be the crown jewels of the British energy system.
“They broke the onshore wind market by banning it, they undermined the solar industry, and they caused chaos in the home insulation market.”