Engineering news
RenewableUK has issued a stark warning to the government over the future of the offshore wind industry, following RWE shelving a 340MW offshore wind farm project due to policy uncertainty.
RWE, a sister company to RWE npower, recently announced it had stopped plans to invest in the Galloper offshore wind farm, which was being built in conjunction with SSE as an extension to the 500MW Greater Gabbard project off the coast of Suffolk.
Maria McCaffery, RenewableUK's chief executive, said that offshore wind projects stopping should be “a matter of concern for government”.
"RWE's announcement shows that getting projects actually built can't be taken for granted, even after they've received consent and even after early construction work has begun," she added.
Despite the Galloper project having received positive investor interest, including that of the Green Investment Bank, RWE said the risks of continuing with it were too high.
“The decision reflects the tight time scales available to secure financing whilst still achieving accreditation under the Renewable Obligation, which overall results in an unacceptable balance of risk and reward as compared with the investment disciplines embraced by the RWE Group,” said RWE.
The announcement comes almost exactly a year after RWE halted work on a £4 billion Atlantic Array Round 3 offshore wind farm in Wales, claiming its deep water and unfavourable conditions would make it uneconomic.
RWE remaining offshore wind projects in the UK include the soon-to-be completed Gwynt y Mor scheme in North Wales and Triton Knoll. It also has a stake in the giant Dogger Bank Round 3 project being developed by the Forewind consortium.
McCaffery stressed the need to overhaul current policy for the renewables sector and provide the industry with clarity on support levels beyond 2020 or the government risks damaging investor confidence.
She also warned that confusion over financial support for renewables, such as switching from Renewables Obligation to Contracts for Difference “left developers working under extraordinarily challenging conditions”, forcing major projects to grind to a halt.
McCaffery said: “This means that British jobs and economic growth are being jeopardised. More than 13,000 people in the UK now owe their livelihoods to offshore wind. Supply chain companies up and down the country are counting on projects such as Galloper to go ahead. In the long term, it means that our potential to employ up to 44,000 people in the UK’s offshore wind sector by 2023 is being undermined.
She added: “Underpinning everything is the need for a clear vision from government for the period beyond 2020, so that we can plan accordingly. The lack of a long-term strategy is stifling confidence and large-scale projects may fall by the wayside.
"To provide the UK with energy security, as well as bringing down costs through economies of scale, the industry needs to know how much offshore wind capacity ministers want to see installed by 2030. That would send an unequivocal signal to investors and thaw the freeze in the board rooms of big companies seeking to invest billions in Britain’s renewable energy sector.”