The Budget proposes to review the support given to the offshore wind industry - from Renewables Obligation Certificates - by £525m. Electricity supply companies currently receive 1.5 ROCs for every megawatt hour (MWh) of energy they buy from offshore wind farms, which they can then sell on. Under the Chancellor’s plans this will rise to 2 ROCs for the financial year 2009-2010, and fall back to 1.75 ROCS in 2010-11.
Because of the collapse in bank lending wind schemes currently seeking finance face potential delays, particularly those being developed by independent power companies that have historically relied on project finance to bring wind farms into operation. Under the arrangement negotiated by the Chancellor the European Investment Bank will make available up to £4 billion for UK renewable schemes which cannot find project finance.
Richard Mardon, Managing Director of Your Energy Ltd, a leading UK independent onshore wind energy developer said, "the UK has 9GW of wind energy projects on and offshore with planning consent or in construction, as much as 5GW of which could be completed within the next 2-3 years. Sorting out funding issues at this stage is crucial if we are to make a decisive step towards reaching our 2020 targets on renewable energy.”
Today also saw the announcement of £405 million in funding for other low carbon energy technologies, including wave and tidal devices - a sector where the UK is currently a world leader in research and development. The new funding will come via existing programmes such as the Environmental Transformation Fund to assist manufacturers to taking their projects from prototype to the commercial stage.
Alan Moore, the chair of the UK Government’s Renewables Advisory Board and outgoing Chair of the British Wind Energy Association (BWEA)’s Marine Strategy Group said, “the £405M for low carbon technologies development and deployment is a very promising and much needed budget decision. The wave and tidal industry has been fighting for support over the past years and only through determined efforts has made steady progress and established the UK as the world leader in this field. With this boost we should see the UK speeding the progress towards exploiting our massive indigenous wave and tidal energy potential.”
Wind's contribution to the UK low carbon economy
The BWEA has launched a report on the wind, wave and tidal sector’s contribution towards building a low carbon economy: Powering a Green Economy: Wind, wave & tidal’s contribution to Britain’s industrial future.
While only 1% of the existing world wind market is offshore (some 1.5GW of generating capacity), up to 40GW of new sites will be developed in European waters over the next decade. At least half of those sites will be in the UK, creating a tremendous new opportunity for UK based manufacturing, installation and operations jobs.
The BWEA analysis of the industry demonstrates that at least 20GW of UK offshore wind projects are deliverable by 2020. Together with onshore development this would create a £65 billion UK wind sector within a decade. Up to 60,000 UK based jobs could be created in the new sector, if the plant needed to supply the industry is located in Britain.