Widespread disinterest was anticipated after the government ignored warnings about rising costs.
After the most recent government auction, no new offshore windfarms will be built in the UK, which critics have dubbed the largest failure of clean energy policy in nearly a decade.
None of the companies hoping to build large offshore windfarms in UK waters participated in the government’s annual auction, which awards contracts to generate renewable electricity for 15 years at a set price.
The companies had repeatedly warned ministers that the auction price was too low for offshore wind farms to participate, as costs in the sector had risen by approximately 40% due to inflation in their supply chains.
According to the Labour Party, the government’s “energy security disaster” may cause the UK to lose billions of dollars in investment and increase the cost of living for working families.
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Up to 5 gigawatts of offshore wind were eligible for competition, enough to power nearly 8 million households annually.
According to Renewable UK, this would have saved consumers £2 billion annually compared to using electricity generated in a gas power facility.
In a significant blow to the UK’s renewable energy targets, the government announced on Friday that only 3.7GW of new clean energy projects were awarded contracts.
Among the winning projects are solar farms, onshore wind farms, the first geothermal initiatives, and a record number of tidal power installations. However, the absence of massive new offshore wind farms will make achieving the United Kingdom’s climate goals considerably more challenging.
According to industry insiders, the three offshore wind developers behind these plans — SSE, ScottishPower, and the Swedish company Vattenfall — were forced to wait out the bidding process after ministers ignored their warnings.
Industry warnings have intensified.
The chief executive officer of ScottishPower, Keith Anderson, stated, “This is a multibillion-pound missed opportunity to provide low-cost energy to consumers and a wake-up call for the government.”
“We all want the same thing: to construct more secure and cost-effective offshore wind farms,” said Anderson. However, the economics did not hold up this time.
Ed Miliband, the shadow secretary for energy security and net zero, stated, “The Conservatives have now destroyed the industry that was supposed to be the crown jewels of the British energy system, blocking the affordable, clean, homegrown power we require.
“Ministers were repeatedly warned that this would occur but disregarded the warnings. Rishi Sunak’s government is too weak and fractured to provide Britain with the necessary renewable energy.”
Sam Richards, the founder of Britain Remade, an organisation that advocates for economic development in Britain, stated that the “catastrophic outcome” of the auction was “directly attributable to the government’s complacency and incompetence.”
He said: “This will condemn consumers to higher bills than necessary and means Britain loses out on vital jobs and billions in investment.”
The energy and climate change minister, Graham Stuart, stated that the government was ecstatic that the auction secured “a record number of successful projects across solar, onshore wind, tidal power, and for the first time, geothermal.”
Stuart stated the government would collaborate with the offshore wind industry to preserve the sector’s global dominance.
The government has been severely criticised for its record on green energy policy, which includes restrictions on onshore wind, the solar industry, and inadequate home insulation levels.
Greenpeace characterised the outcome of the most recent auction as the “worst setback for clean energy policy in the last eight years” because it jeopardised the UK’s plan to triple its offshore wind power capacity by 2030 and cast doubt on the country’s climate goals.
Richard Sandford, co-chair of the Offshore Wind Industry Council, stated that lessons must be learned to develop new offshore wind farms through future tenders. “Clearly, this year’s auction represents a missed opportunity to strengthen Britain’s energy security and provide consumers with low-cost electricity,” he stated.
“Our plans to accelerate this innovative sector’s development in the coming years remain ambitious and unwavering. We will continue to work with ministers to develop a world-class offshore wind supply chain in the UK, creating tens of thousands of employment and attracting billions in investment and expanding opportunities to export our products and expertise abroad.”
Solar energy constituted 50% of the renewable energy capacity won at auction.
During the auction, nearly 1.5GW of onshore wind capacity secured a contract, while the tidal power sector secured a record capacity of over 50MW.
Additionally, there were three winning proposals for geothermal energy, totalling 12MW of capacity.
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