£60m auction and a Sector Deal before Christmas - Energy Minister

By Grimsby Telegraph | Posted: 21 Nov 2018

A £60 million budget has been set for the next renewables auction, and an offshore wind sector deal is imminent, Energy and Clean Growth Minister Claire Perry told a House of Commons reception.

The next round of Contracts for Difference will be held in May, as further projects are brought forward, while there are hopes of announcing support measures for the industry that the Humber has seized before Christmas.

The funding will look to support 6GW of capacity as the UK marches towards 30GW by 2030. Grimsby alone has a clear path to 8GW of installed capacity, with future project rounds still to come. 

More: Appetite clear for sector deal as hundreds of companies seek work on Hornsea Project Two

The Offshore Wind Industry Council has been working closely with the Government on the Sector Deal, which aims to build on the UK’s global leadership in this clean technology. 

Ms Perry, pictured right leaving a cabinet meeting with Secretary of State for Business, Energy and Industrial Strategy, Greg Clark, told the House yesterday (Tuesday, November 20) that the deal will include both the auction, "and a series of substantial commitments from the operators in the sector to increase the UK content that will be spent.”

The auction round is seen very much as an offshore wind programme.  

Co-chair of the OWIC, Benj Sykes, who is also UK country manager for Ørsted’s offshore wind business, having overseen Grimsby's emergence, said: "This is an important announcement by the Minister, taking forward new auctions to deliver on our ambition to meet a third of UK power by 2030. Industry and Government are close to agreement on a sector deal that will set the pathway to 30GW and we need to look at the details of how the next auction contributes to that goal.

“We welcome the Minister’s announcement that a transformative sector deal is imminent. Offshore wind is becoming an industrial powerhouse. As the Minster has made clear, it’s a key technology in our country’s transition to affordable clean power, and the backbone of a low-cost energy system in the years ahead.

“With the right deal in place, we can continue to attract billions of pounds of investment in new infrastructure, secure our power supplies, and create thousands of skilled jobs, including our supply chain which already extends to every part of the country.”

Through innovation, collaboration and Government policy to secure investment in a pipeline of future projects, the UK industry has slashed its costs, so that new offshore wind farms are cheaper to build than fossil fuel alternatives, with Hornsea Project Two wowing in the last round with a £57.50 strike price.  

An administrative strike price of £53 to £56 has been issued for this round.

With the deal, the domestic and export market for offshore wind products and services provided by UK-based firms is expected to be worth £4.9bn a year by 2030, by which time 27,000 people will be working in the industry. With the global market expected to exceed £30 billion by this time, the industry and Government are taking steps to ensure that the UK is ready to benefit from this global growth. Trade missions from the Far East and the US have been a regular feature for the Humber in recent years, with the cluster model and operational set-ups of both Green Port Hull and Grimsby's service quays studied in detail.

Opportunities for more companies to become part of the burgeoning offshore wind supply chain are being highlighted in a series of supply chain roadshows led by the former McLaren Group chief excecutive and Formula One team principal Martin Whitmarsh currently taking place around the country. Aimed at the existing supply chain firms and also companies new to the industry, the focus is on readying the UK to take advantage of the growing global market, which could see export value increase five-fold by 2030.

Having visited Durham earlier this month and Aberdeen yesterday, it will move on to Southampton, Wrexham, Norwich and Hull in the coming weeks.

The roadshows follow the publication last month of the Offshore Wind Industry Prospectus for supply chain companies written by Mr Whitmarsh, supported by the Offshore Wind Renewable Energy Catapult and major companies in the sector including innogy, MHI Vestas Offshore Wind, Ørsted, ScottishPower Renewables and Siemens Gamesa Renewable Energy.

Offshore wind farms operated and maintained from Grimsby
Name / Developer Turbines  Capacity
(MW)
Completed

Cumulative Total  (Turbines / MW) 

Operational
Lynn & Inner Dowsing - Centrica 54 x Siemens 3.6MW 194 2008 54 / 194
Lincs - Centrica 75 x Siemens 3.6MW 270 2013 129 / 464
Westermost Rough - Orsted 35 x Siemens 5MW 210 2015 164 / 674
Humber Gateway - E.on 73 x MHI Vestas 3MW 219 2015 237 / 893
Race Bank - Orsted 91 x Siemens 6.3MW 573 2018 328 / 1,466
Under construction
Hornsea Project One - Orsted 174 x Siemens 7MW 1,218 2020 502 / 2,684
Triton Knoll - Innogy 90 x MHI Vestas 9.5MW 860 2021 592 / 3,544
Hornsea Project Two - Orsted 165 x Siemens 8.4MW 1,386 2022 757 / 4,930
In development
Hornsea Project Three - Orsted 300* 2,400* 1,057 / 7.330
Race Bank Extension - Orsted 91* 573* 1,148 / 7,903
*Indicative only

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