Humber giants welcome long term offshore wind commitment

By Grimsby Telegraph | Posted: 24 Jul 2018

Long term certainty for offshore wind has been welcomed by the Humber’s biggest players in the burgeoning industry.

Energy Minister Claire Perry has revealed a framework of subsidy auctions which will allow the UK’s capacity to nearly double over the next decade, bringing further job creation and security - and major investment.

Grimsby is already home to 1.5GW of offshore-installed green energy, with arrays under construction to take that to 5GW as the new potential pipeline emerges, while Hull’s blade facility is a UK supply chain highlight.

The Crown Estate is already considering new seabed leasing rounds to enable expansion, with the Humber once again at the fore of potential investment.

The area’s single biggest investor, Orsted, has welcomed the announcement. UK managing director Matthew Wright, recently praised Government support when opening Race Bank offshore wind farm on the Royal Dock quayside in Grimsby.

He said: “We’re really excited by this positive announcement for offshore wind in the UK. “The UK has gained its status as the global leader in offshore wind by industry and Government working together to give businesses the confidence to invest in projects, which have consistently been delivered on time and on budget. Through Contracts for Difference, the industry has slashed its costs, led by projects like Hornsea Project Two, which recently won an auction at the lowest ever price for offshore wind in the UK, halving the auction prices seen just two and a half years earlier.

Read more: 'Offshore wind is spinning round a 40 year story of decline' - major investor's take on Grimsby's latest addition

“The benefits of offshore wind are already being realised in coastal regions such as the Humber, where the industry has brought new skilled job prospects, opportunities for businesses and millions of pounds worth of community funding.”

Hornsea Project Two came in at £57.50, halving the initial bids, underlining the progress made. It was lower than new gas and nuclear, though until storage is fully developed, doesn’t offer base load certainty.

As reported, the reduction has been achieved through economics of scale and also managing the risk effectively, with strong appetite anchored from investment partners, who are increasingly coming to the projects earlier.  

Clark MacFarlane, managing director of Siemens Gamesa Renewable Energy UK, said: “This is a positive commitment from the Government, which will see offshore wind playing a bigger part in the UK energy mix in the next decade. A regular commitment to auctions and higher deployment is exactly what the supply chain needs to consolidate today's jobs and plan for the future ones.”

Read more: Hull's biggest blade order yet is signed off as Orsted partners with Siemens Gamesa

Alongside Orsted’s 2.5GW Hornsea One and Two projects, will come Triton Knoll from Innogy. It will follow Humber Gateway in using MHI Vestas technology. It has been a company name mooted with investment in the region, though does have existing commitments in the North East and South.

Chief executive Philippe Kavafyan said: “Through our involvement with Blyth Offshore Wind Park and other pioneering projects, MHI Vestas is committed to UK offshore wind expansion and innovation. With our local blade manufacturing on the Isle of Wight already providing exports, this announcement is welcome news as MHI Vestas stands ready to expand our industrial footprint in the South, but also in the North, to deliver on these upcoming projects.”

Baroness Brown of Cambridge, the Offshore Wind Sector Champion, said: “This is a very welcome and timely announcement, which will help deliver ‘clean growth’ through decarbonisation of our electricity system. The offshore wind industry is a UK success story, with huge global potential - both to reduce CO2 emissions and for exports from an innovative UK supply chain. 

“The long term commitment to this industry evident in the announcement of auctions going out to 2030 will give companies the confidence to invest in the UK. It gives us the opportunity to accelerate the exploitation of British technology, with the support of the UK research and innovation base including the Offshore Renewable Energy Catapult, the Energy Systems Catapult, and the UK’s world class universities.”

Read more: Offshore wind: 'The transformative potential is now clear' #RUKGOW18

Hull is playing a major part with projects and partnerships, including Aura and ORE Catapult’s operations and maintenance specialism.

Ministers confirmed that the next competitive auction will take place in May 2019, with offshore wind, remote island wind and a range of other projects competing for Contracts for Difference (CfD). The further bi-annual commitment to build on the current 7GW capacity will enjoy a budget of £557m. 

Welcoming the announcement, RenewableUK’s chief executive, Hugh McNeal, said: “This is a ringing endorsement by Government of our world-leading offshore wind industry and its ability to deliver for UK businesses and British industry. Boosting our ambitions for offshore wind is win for consumers, as offshore wind is now one of the cheapest options for new power in the UK.

“This sets us on the path do deliver the tens of billions of pounds of investment that will be needed to meet our ambition of at least 30 GW by 2030. This is good news for domestic supply chain which can look forward to a pipeline of new offshore wind projects that will support tens of thousands of jobs across the UK.

“This is also an important boost for remote island wind, which like other renewables, is popular with the public and is a unique economic opportunity for island communities”

Read more: Hornsea construction chalks up a world-first with 4,000 tonne offshore addition

Benj Sykes, co-chair of the Offshore Wind Industry Council and UK country manager at Ørsted, added: “I welcome today’s announcement which is a strong vote of confidence in our industry.  As well as cost-effectively reducing carbon emissions to meet our climate change targets, the offshore wind sector is powering the clean economy, bringing investment, skilled jobs and supply chain opportunities to businesses up and down the UK. We have proposed a transformative ambition to deliver at least 30GW by 2030, enough to meet more than a third of the country’s electricity needs, which in turn, together with the pipeline of regular auctions announced today, could increase exports five-fold, create thousands of skilled jobs and reduce electricity system costs.” 

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