Offshore wind budget 'raises questions' over 2030 clean power ambitions

The government has announced its budget for the next offshore wind technologies in the AR7 Contracts for Difference (CfD) auction.

Commenting, Sam Hollister, Head of UK Market Strategy at LCP Delta, said:

“The recent CfD budget announcement by the government has certainly underwhelmed and raises questions about the ability to deliver the government’s manifesto pledge of Clean Power by 2030. What was always an ambitious target now looks like it is being quietly shelved by the government in the face of rising costs and political pressure.

“In its own Clean Power Action Plan, DESNZ set out that it would need at least 43GW of offshore wind installed by 2030 to hit clean power targets, and perhaps even up to as much as 50GW in total could be required. Currently, there are only 16GW of offshore wind operational today. With a further 12GW in the pipeline, that still leaves more than 20GW still to be procured if we are going to meet the government’s own plans. LCP Delta analysis expects that this budget announcement will at most procure 4-5GW.

“The apparent lack of ambition in the allocated budget will have some investors wondering whether this is a wider weakening of climate action. Wind was supposed to be the backbone of the power system in the 2030s, providing cheap, clean, and secure power. If the government is softening its stance, some investors may wonder whether government support for other clean tech is wavering and be looking for answers on the government’s long-term strategy for power decarbonisation.”