Only a third of the value of new UK offshore wind farm projects is being spent with British companies, according to analysis. As a result the cost of subsidies to projects will outweigh their benefits, a report by the government-backed innovations company Offshore Renewable Energy Catapult (Orec) suggests. The UK will start to see a “net benefit” from future projects, however, as subsidy costs fall and the proportion of investment spent domestically increases. Offshore wind turbines with a capacity of 5.1 gigawatts (GW) have already been installed and their number is increasing, with 10GW expected to be generating by 2020, supported by billions of pounds in subsidies. Up to a further 10GW of capacity could be built in the 2020s and ministers are preparing to award almost £300 million in annual subsidies at an auction of new projects. The next tranche of new projects vying for subsidies this year is expected to deliver net benefits. Cost reductions mean prices are expected to fall below £105/MWh, and companies are under pressure to spend at least 50 per cent of the value of contracts in the UK. At £90/MWh, with 50 per cent UK content, each gigawatt of capacity would deliver a “net be nefit” of £1.7 billion, Orec’s report finds.
Times 28th March 2017 read more »