The UK boasts the “largest offshore wind pipeline” according to EY Global however has lost the top rank for installed capacity to China.
This is according to Ernst and Young (EY) Global which revealed that the UK has moved down one spot to fourth in the Renewable Energy Country Attractiveness Index (RECAI). Germany has claimed third this year.
The offshore wind generation sector has been provided a boost in the UK via the highly successful Contracts for Difference (CfD) scheme. The most recent CfD auction saw offshore wind farms agree to a fixed electricity price four times cheaper than the current cost of gas power stations.
Auction Round Four saw the five offshore wind projects win contracts to secure a strike price of £37.35/MWh – an almost 70% drop from the price of its first allocation round in 2015, EY said. The ECIU estimated that the CfD contracts awarded in this auction round would save £7 billion on electricity costs under wholesale prices seen in the current crisis.
The UK is additionally aiming to have 50GW of installed offshore wind capacity by 2050 via its Made in Britain initiative. This is significantly more than the current installed capacity which stands at 12GW, EY stated.
Including onshore facilities, UK wind generation surpassed 20GW in early November according to the National Grid, where it hit a new record for the second week in a row.
“Energy transition remains at the top of the agenda for government and business, made all the more urgent in light of the significant challenges facing the global energy market. This is reflected in the remarkable commitments made across global markets to drive uptake of renewable energy sources and reduce reliance on gas imports,” said Ben Warren, finance leader and RECAI chief editor at EY Global Power & Utilities Corporate.
The UK Government is providing further support for the UK’s wind sector by supporting onshore wind generation – an area that has been neglected in recent years. Highlighted in the government’s Growth Plan in September, the then Chancellor Kwasi Kwarteng included support to unlock the onshore wind sector.
Despite being one of the cheapest methods of generating clean energy, onshore wind had been hampered over the last decade by planning constraints amounting to an effective ban.
The inclusion of support measures for onshore wind had been welcomed by the energy sector and could be a major development in spearheading the green revolution in the UK. It could also be pivotal in gaining energy independence and reducing the cost of energy bills.
Floating wind is expected to be accelerated with a target of 5GW seeing many companies prepare for the scaling of this renewable energy generation technology.
Last week, Equinor expressed an interest in developing a gigawatt scale floating offshore wind farm in the Celtic Sea in a bid to increase its renewable energy generation portfolio.
The company announced the interest ahead of an upcoming Celtic Sea floating wind seabed leasing round in 2023. The seabed leasing round will be conducted by The Crown Estate with the property management firm preparing the surrounding area for the creation of gigawatt scale floating offshore wind projects.
The RECAI report stated that the Crown State has been fundamental in scaling the pipeline for renewable generation. It stated that the Crown Estate Scotland awarded option agreements to 11 floating wind projects with 15GW capacity.
Providing a boost to the renewable attractiveness of the UK is the UK Infrastructure Banks’ £22 billion investment plan which highlighted renewable energy as its largest investment sector.
Amongst this investment, funding had been earmarked for low-carbon hydrogen, energy storage and grid networks.
Interest and activity in the hydrogen space has been growing over the past year and had been bolstered by the government’s Hydrogen Strategy in August 2021. This set out plans to achieve 5GW of low carbon hydrogen production capacity by 2030, a target which has since doubled to 10GW.
With the Government targeting up to 10GW of low carbon hydrogen production capacity by 2030, demand will rise for the clean energy carrier and in turn, the hydrogen economy will develop as a result, presenting further opportunities for decarbonisation.
