Meeting staff from the Offshore Renewable Energy
Catapult today in Newcastle ahead of the meeting of
Regional Cabinet, Energy and Clean Growth Minister
said:
We are witnessing an unprecedented global
transformation to a low carbon economy.
This change creates enormous economic opportunities.
Bloomberg New Energy Finance predict that of the $11.5
trillion of investment they expect to be invested in
new power generation assets globally out to 2050, 86%
is expected to be in low carbon, and 73% to wind and
solar.
We want the UK to continue to be a leader in this
global transition, and a leading destination for clean
investment. Since 1990 the UK has cut emissions by more
than 40%, while growing our economy by more than
two-thirds, the best performance in the G7.
But cutting carbon and capturing clean growth is an
ongoing challenge. Government policies have already led
to rapid growth in the deployment of renewables. This
has led to substantial investment by offshore wind
suppliers into UK-based services and manufacturing,
creating thousands of skilled jobs and delivering
hundreds of millions of pounds worth of investment.
Offshore wind is a success story for the UK - and we’re
the world leader with over 7 gigawatts installed and
operational. The scale and breadth of our ambition has
driven innovation and evolution through initiatives
like this catapult; in partnership with industry.
This in turn has in turn sharply decreased costs. A
strike price of £57.50 per megawatt hour for offshore
wind was unimaginable a few years ago, rapidly driving
down subsidy costs for new projects.
The UK has helped to realise this extraordinary coming
of age for the global sector, and are poised to reap
the reward in new export markets. And we want to
continue to build on our successes at home.
Today we’re announcing that the next auction for
Contract for Differences Auction will open by May next
year. And we plan to set out the parameters of the next
auction later this year.
But we understand that to make meaningful long-term
investments, industry needs clarity over years, not
months. That is why we are also announcing the
intention to run subsequent auctions around every 2
years after that, using the £557 million that we have
already announced.
Depending on the auction prices, this could see 1-2
gigawatts of new offshore wind every year in the 2020s
– powering millions more homes a year and we will look
at ways to manage the auctions to ensure smooth
delivery of low carbon generation. In return we expect
the offshore wind sector to continue cutting costs and
reducing household bills whilst growing UK
manufacturing.
In giving companies long-term visibility, we should
rightly expect long term commitments from them, and I
look forward to working with the sector in the coming
months to explore their ambitious plans to invest in
the UK supply chain.
In recent years total UK content in the offshore wind
sector has increased to 48%. And I am committed to
upping the scrutiny of developers and their supply
chains and ensure this number keeps growing.
For the last decade the Offshore wind industry has been
a great British success story: increasing productivity,
raising earnings and improving lives in communities
across the UK. Today, the sector gets the certainty it
needs to build on this success through the next decade.
