8 September, 2023
BFM Business

While the Ministry of Energy welcomes a "record of clean energy projects which have been allocated public funds", it admits that no offshore wind project appears in this year's allocation .

The British government's last call for tenders for the allocation of new offshore wind farms ended in failure, a sign of the crisis in this sector, which is nevertheless crucial for the United Kingdom's energy transition. If the Ministry of Energy welcomed in a press release on Friday a "record of clean energy projects which have been allocated public funds", it admits that no offshore wind project appears in the list. allocation this year.

Energy Minister Graham Stuart assures that such results have also occurred during similar calls for tenders in Germany or Spain, "a consequence of the global surge in inflation and the impact on the supply chain. 'supply".

In the wake of the war in Ukraine, the price of materials used in offshore wind turbines such as steel, aluminum and copper has soared and considerably increased the cost of projects, while the tariffs for the electricity supplied once they are operational is capped. Utilities claim that this ceiling is currently insufficient to make these projects profitable.

Additional electricity costs of one billion pounds per year for taxpayers
Critics were flying from all sides on Friday. "The failure of the renewables tender is the worst clean energy disaster for at least a decade and puts UK decarbonisation targets at risk ," environmental NGO Greenpeace said.

“It makes the UK more dependent on imported and expensive fossil fuels,” she adds, calling for a rapid reform of the tendering system.
Economic growth charity Britain Remade estimates that the tender flop will cost British taxpayers some £1billion a year in additional electricity costs. She blames the UK government for not heeding warnings from companies in the sector.

A sign of the crisis which has befallen this sector where the United Kingdom is nevertheless a leader in Europe: in July the Swedish electricity group Vattenfall put a stop to the vast Norfolk Boreas offshore project, in east of England, citing "extremely difficult conditions at the moment".

Mads Nipper, boss of the Danish electricity giant Orsted, hit the nail on the head on X (formerly Twitter), praising a "courageous decision" by his competitor and hoping that it "will make governments realize that offshore ambitions will not come true only with sound bidding frameworks and realistic prices".

An anonymous sector source cited by the PA agency summarized: "there is no (new) offshore wind project even though it is the cornerstone of our transition to clean energy, which is a subject of concern for the government.

“Offshore wind is central to our ambition to decarbonize our electricity supply,” assures Graham Stuart. “Our ambition to build 50 gigawatts of offshore wind capacity by 2030 (...) remains firm.”