Skip to main content

Select Language:

Offshore wind being blown off course


By Keith Anderson, CEO, ScottishPower

Recent headlines have proclaimed that the UK’s offshore wind ambitions have been blown off course and, disappointingly, they’re not far from the truth.

With no new projects secured in the latest CfD auction process, the UK has missed out on a multi-billion-pound opportunity to deliver more low-cost energy for consumers.

At the same time, it’s put its already ambitious target of delivering 50GW of offshore wind by 2030 on a very shaky wicket.

The UK’s CfD process has long been recognised globally as the catalyst for its leadership position and delivering what was the biggest offshore wind market in the world.

It has been a hugely successful mechanism in attracting investment, getting costs down and turbines up. 

Nobody doubts the strategic importance of delivering offshore wind at scale if we are to tap into cheap and secure home-grown energy and deliver net zero. Every large new offshore wind farm (1GW) saves billpayers over £300 million each year compared to gas.  And that’s before you even get to the economic benefits of development, construction and jobs. 

This auction has been a rare misstep that means that the UK has missed out on up to 5GW of new green projects this time round. That could have taken £1.5bn off customers’ bills at the very time people are more concerned about the cost of energy than ever before.

We’re at a tipping point and if we’re to stay on track to hit the Government’s target of 50GW of offshore wind by 2030, the auction process needs to flex.

Of course, auctions come and go. Now that they are annual, there’s the chance to seize the initiative and work to deliver a successful process for next year. Government already has many of the tools at its disposal to correct course and make sure we maintain the momentum. 

It’s now clear this year’s strike price was set too low for developers to credibly be able to bid in.  Rising costs, fuelled by increased demand, limited supply chain and inflationary pressures mean the cost of building anything has gone up – no matter the technology or the industry. 

And at the strike prices mandated, it just wasn’t feasible. 

At ScottishPower we are in the business of building wind farms, not letting them sit on the development shelf.  But we cannot do so when the numbers don’t add up. 

We’re a developer with a strong track record of getting costs down and we’re still proceeding with development under contracts won in the last auction, even when others have been unable to do so due to rising prices.

If things had been different and the investment conditions had been right, we could have bid 1.6GW of projects into the auction – enough to provide 1.5 million homes with low-cost, green electricity – as part of our overall multi-billion pound plan for the East Anglia Hub of offshore wind developments.

So where do we go from here? 

To meet the 2030 50GW target, the UK needs to deliver more than 30GW of offshore wind in just seven years.  We can’t afford to slow the pace or have another year of missed opportunity.  

Clean, green, homegrown offshore wind needs to be knocking dirty and more expensive fossil fuels off the stack to deliver affordable, long term energy security. 

I’m confident we can work collaboratively with the new Secretary of State and her department to correct course quickly and ensure investment in green energy continues to flow.  We all want the same thing, to get more secure, low-cost green offshore wind built in our waters and unlock the billions of pounds of investment this country needs to meet its long-term offshore wind ambitions.

This isn't about offshore wind getting expensive. It will remain the fastest, lowest cost way to secure our electricity needs and decarbonise our economy. So, we hope the Government will open its doors and work with the industry to deliver a massive boost toward the 50GW target in next year’s auction.