UK offshore wind auction must be a global wake-up call, GWEC says
London Array wind farm. Image by: Masdar (www.masdar.ae).
Regions aspiring to develop offshore wind projects, such as APAC and Latin America, should learn from the UK's recent failure and establish effective collaboration between the government and industry to speed up the transition to renewable energy, according to the Global Wind Energy Council (GWEC).
In a comment on the latest round of the UK government’s Contracts for Difference (CfD) scheme, GWEC said that the government's failure to contract any offshore wind projects should serve as a turning point for the global offshore wind industry.
GWEC noted that policymakers did not take action although industry experts clearly cautioned that the pricing set by the UK government made project investment unfeasible. The price cap for this year's auction was set even lower than in the prior round, despite wind developers grappling with a challenging environment of inflation and escalating supply chain expenses.
“We hope the UK government learns a lesson from this: wind energy is cheap, but it’s not free, and investors can’t be taken for granted. We are seeing these challenges around the world and governments will be watching today’s news closely," said GWEC's chief executive Ben Backwell.
“This is a huge missed opportunity, particularly as offshore wind remains much cheaper than gas. The UK is competing with other markets around the world for clean energy investment – just look at how many other countries around the world are building their offshore wind sectors. The UK needs policies which will attract investment and jobs, not race to bottom pricing that makes investment impossible," Backwell added.
In a recent report, GWEC forecasts that the world will install 380 GW of new offshore wind across 32 markets in the 2023-2032 period. However, unlocking this potential necessitates an unprecedented level of collaboration, not only between governments and industry but also across different regions, the association said.
Anna is a DACH expert when it comes to covering business news and spotting trends. She has also built a deep understanding of Middle Eastern markets and has helped expand Renewables Now's reach into this hot region.