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Huhne "surprised" at potential battle over offshore development zones

UK energy and climate change secretary Chris Huhne this week expressed his surprise at reports of a potential legal conflict over offshore development zonesbetween the wind industry and oil & gas firms.

The Observer newspaper on Sunday reported that trade body Oil & Gas UK was threatening to take legal action to defend its interests in the North Sea against offshore wind farm developers. The Financial Times then claimed on Tuesday that under the Crown Estate lease terms for offshore wind development zones, wind farm operators could have their leases terminated without compensation if oil and gas companies decide they need the seabed plot for exploration, drilling or pipelines.

Speaking at the London School of Economics (LSE) on Tuesday, Huhne said he was unaware of the Financial Times report, but would be surprised if any potential conflict did occur.

“We are absolutely determined to proceed without delay [with the offshore wind programme],” said Huhne.

“I’m surprised if there are conflicts because the sites we’ve selected for offshore wind are in shallow water or on sandbanks and not particularly attractive to oil & gas developers, who will be looking for deepwater sites.”

Oil & Gas UK issued a statement on Tuesday rejecting the claims that it was seeking legal action. Instead, it called for cooperation between the two industries and a consultation to “create an effective regulatory framework” that avoided ambiguities and the subsequent potential for litigation.

The past 12 months have seen UK offshore wind capacity pass the 1GW mark. A further 2.2GW is in construction and just under 2GW more has received consent, with plans for 32GW to be developed by 2020.

Huhne was at the LSE on Tuesday to deliver a lecture on green growth, and used his speech to call for a ‘third’ industrial revolution.

“To change our national economic story from one of financial speculation to one of future growth, we need a third industrial revolution: a green revolution,” said Huhne.

“It will transform our economy as surely as the shift from iron to steel, from steam to oil. It will lead us toward a low-carbon future, with cleaner energy and greener growth. With an economy that is built to last – on more sustainable, more stable foundations.”

He acknowledged an impending energy gap, citing 20GW of UK electricity generating capacity being lost by 2023, which along with the upgrade of existing assets required £200bn of investment by 2020.

“The replacement cycle means energy investment will ramp up significantly – between 0.5 and 1 per cent of GDP,” he added.

“Have no doubt: this is a step change. And the opportunities are breathtaking.”

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