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Energy companies voice concern at state of UK offshore market

Energy firms could quit the UK offshore wind market unless the investment environment improves, the government has been warned.

Wind power

Trade body RenewableUK said a change in government policy was critical after another damaging announcement for the sector this week.

Energy firm SSE said it would be holding back from committing further to major schemes it is involved in the North Sea, the Firth of Forth and off the Suffolk coast.

Instead, it will spend the rest of this year focusing its resources on progressing the Beatrice project, off the Caithness coastline.

Its decision comes after a string of blows for the offshore wind market.

In February, the consortium behind the huge London Array wind farm in the Thames Estuary, led by Denmark’s Dong Energy, scrapped a proposed 240MW expansion because of planning uncertainties. And Forewind – a partnership of SSE and Norway’s Statkraft Statoil – said it would develop six projects in the Dogger Bank zone of the North Sea, rather than eight as originally intended.

Weeks earlier, German energy giant RWE discarded plans to build a 1.2GW wind scheme in the Bristol Channel. RenewableUK offshore renewables director Nick Medic told NCE this week: “We have seen a lot of decisions over the last six months and it all points to a reduction in long-term delivery.”

He said the government needed all the projects it could get if it was to meet its 2050 renewables targets and protect energy security.

“We will need every low carbon technology we can throw at it – and some new ones,” he said. “We need to be building more rather than less. He added: “We need to signal that we need as much indigenous and renewable energy as we can get. Otherwise companies could move on to work in other countries and other technologies.”

Medic said the government decision to replace Renewable Obligation Certificates with Feed-in-Tariffs from 2017 was causing companies to focus on a narrow set of schemes.

He called for clear incentives for further investment, such as stepping stone renewables targets to be set between 2020 and 2050, and a clear pipeline of opportunities to be laid out.

SSE managing director of generation development Jim Smith said this week: “Having looked across our offshore portfolio, and across our capital and investment programme as a whole, we believe that we should focus our near term development activity on Beatrice.

He added: “While increasing our commitment to the development of Galloper, SeaGreen and Forewind is not the right option for SSE at present, in the context of our wider investment plans, we will continue to work with partners and other stakeholders to achieve the most positive possible outcome for each project.”

Earlier this week the government hailed Siemens’ decision to invest £160M in wind turbine production and installation facilities in Yorkshire, creating more than 1,000 jobs.

Energy secretary Ed Davey said: “This deal is excellent news for the people of Hull and the Humber, the UK, the wind industry, and our energy security.

“We are attracting investment by backing enterprise with better infrastructure and lower taxes. “As well as helping to keep the lights on and putting more than 1,000 people in work, this deal means we will help to keep consumer bills down as we invest in home-grown green energy and reduce our reliance on foreign imports. “This deal shows our strategy for offshore wind is working; bringing investment, green jobs and growth, and helping keep Britain the number one country in the world for offshore wind.” 

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