The offshore renewable energy industry will receive a much-needed boost this week after the government announced a major overhaul of the UK‘s system of supporting the sector.
Sea-based renewable technologies will receive added financial support following today‘s announcement by Energy and Climate Change Minister Mike O‘Brien..
He confirmed that up to £10 million of government funding is to be made available to develop the next generation of offshore wind technology.
The UK is currently the world leader in operating offshore wind farms, with 598MW capacity, overtaking Denmark’s offshore output in October last year.
There are currently seven fully operational offshore wind farms along with 2 demonstration sites - with another five in construction that will double the UK‘s wind energy capacity by the end of the year.
Speaking at today’s Department of Energy and Climate Change event which, for the first time, brings together renewable industry leaders and the ports industry, Mr O'Brien said that the UK government is determined to do all it can to meet its challenging renewable energy targets of securing 15% of all energy from renewable sources by 2020, despite the current economic situation.
Mr O'Brien said: “Renewable energy is a weapon in our armoury to secure future energy supplies, reduce our reliance on foreign imports, and help tackle climate change.
“That's why we're taking the right long term decisions to encourage the massive investment in renewables that we need to see. This includes changing the planning laws, increased financial support, and ensuring sufficient access to the grid.
“This week's ramping up of financial backing in favour of technologies such as offshore wind is evidence of our determination to create the right investment environment for renewables. And the funding being made available in the next few months will put the UK ahead of the game for the next generation of offshore technologies.
“I know that right around the world, companies, including energy firms, are facing difficult times. We are therefore actively examining how we can help make sure there is sufficient finance and other support available for viable projects which are short of the investment they need.
“Taken together, these measures should leave investors in no doubt of the UK's commitment to renewable energy.”
The UK’s existing offshore wind farms generate enough energy to power over 340,000 homes, saving between 170 and 380.5 million tonnes of CO2 in 2007, compared with scenarios in which the electricity had been generated from gas and coal respectively.
Maria McCaffery, Chief Executive of the British Wind Energy Association, welcomed the government‘s commitment to support the industry.
She said: “This is an important signal from Government on the continuing commitment to offshore wind and emerging offshore technologies. With the right policy framework and levels of support we can reach our 2020 targets.”
From 1 April, a new regime will come into place which will give offshore wind 50% extra financial support, through the Government's Renewable Obligation (RO) scheme. This is as a result of 'banding' the RO, which means rather than a flat rate of support across all renewable technology, emerging technologies that are further from commercial deployment will receive greater levels of support to encourage their development.
The Renewables Obligation is the Government's main mechanism for supporting renewable electricity generation in the UK. It places an obligation on all licensed electricity suppliers to source a specific and annually increasing amount of their sales from eligible renewable sources.
To provide market stability and confidence, the government announced last year that the RO will operate until at least 2037 and will be worth about £1 billion to the renewables sector in 2010.
Since its introduction in 2002, the amount of renewable electricity generated has nearly trebled from 1.8% in 2002 to 4.9% in 2007. Banding will deliver further incentive to developers to deliver more eligible renewables generation such as offshore wind.
The Low Carbon Energy Demonstration Fund, part of the Environmental Transformation Fund, is aimed at accelerating the technology needed to see more large-scale multi-mega watt turbines in offshore wind farms.
Applications will open next month for up to £10 million of funding, which will be allocated to businesses in June.
The Carbon Trust estimates that the offshore wind sector could create up to 70,000 jobs in the UK and up to £8bn in annual revenues by 2020, based on the EU 2020 targets being achieved. On average, 10 full-time jobs are sustained per MW installed.
Editorial@greenwire.org.uk
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