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Mega offshore wind developments to be subsidised

Offshore wind farm developers will be subsidised for up to half of their costs prior to planning consent under plans revealed today, designed to encourage the installation of an additional 25GW of capacity on Britain’s coast by 2020.

The Crown Estate, the owner of the majority of the UK seabed, promised to work with developers to de-risk the planning process. It also revealed its intention to carve up the UK's coast into development zones that developers would bid for, each successful bidder then having exclusive rights to build several offshore windfarms within those zones.

"The new approach to the deployment of offshore wind that The Crown Estate have set out today requires us take an important facilitating role in which we will share developer's risk," said Crown Estate director of Marine Estates Rob Hastings, speaking at the British Wind Energy Association's (BWEA) annual offshore wind conference in London today.

"For the first time we will be investing directly in offshore windfarm development. We will be helping to identify suitable sites and working closely with commercial partners who we expect to make considerable capital investments in offshore windfarm assets."

The proposed extra 25GW of capacity comes on top of 8GW of capacity currently installed, under construction or in planning. Today's announcement by the Crown Estate makes good on Business secretary John Hutton's promise last December that, subject to an ongoing Strategic Environmental Assessment, UK waters would be opened to allow 33GW of offshore wind capacity by 2020.

Offshore wind is regarded by many as the form of renewable energy likely to make the greatest contribution towards the UK meeting its EU target of 15% of total energy demand to come from renewable sources by 2020.

However, despite the Crown Estate's promise to de-risk developments both financially and through negotiating with stakeholders on developers' behalves, some questioned the private sector's willingness to fund developments following Shell's withdrawal from the London Array scheme.

"Costs are going up," said Npower Renewables head of business development Paul Cowling. "Our Rhyl Flats scheme cost £2.1M per megawatt of capacity last year. Already the cost of a similar scheme has risen to £2.6M. When’s it going to stop? While the cost of oil continues to rise wind may still look attractive, but if it falls back you may see a lot of people falling out of the market."

Liberal Democrat Shadow Environment Secretary, Steve Webb said: "The Government’s stance on environmental issues is hopelessly contradictory. This new encouragement for wind farms from one part of the Government is welcome, but at the same time the new Planning Bill threatens to wreak environmental havoc.

"If the Government gets its way, the good work done promoting wind farms will be undone by the vast expansion of airports, roads and polluting power stations," he said.

Environmental groups gave a cautious welcome to the proposals. Friends of the Earth's energy campaigner, Nick Rau, said: "The UK has vast experience in offshore engineering and an abundance of wind and wave power that could be harnessed to make us a world leader in green energy.

"The Government must urgently review its renewable energy strategy. Its green credentials continue to be undermined by its attempts to water down EU plans to boost green energy and its refusal to encourage homes, businesses and communities to install clean energy systems."

Joan Edwards, The Wildlife Trusts' head of marine policy welcomed the announcement, with qualifications: "Our seas are showing signs of climate change faster even than habitats on land, and we strongly support the role of renewable energy in mitigating climate change.

"Like any development, offshore windfarms have an impact on seabed habitats and marine wildlife. It is vital that the planning, and licensing, of windfarms takes these impacts fully into account so that the most sensitive sites are avoided and all impacts minimised."

She said that the main obstacles for windfarms were not environmental groups, but "Potential conflicts with navigation, military activity and commercial fishing. We are one of the stakeholders that chooses to work with the renewables industry rather than against it, to ensure the best outcome for wildlife and natural habitats," she said.

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