The on and offshore wind sectors took a battering last week, emphasising the uncertainty of their future.
Business secretary Vince Cable visited industrial sites in the north-east. During the trip, senior staff from Offshore Group Newcastle showed Cable the site where it hopes to build a sizeable factory to make jacket foundations for offshore wind turbines. The Financial Times reported OGN has spent £19m on reopening and upgrading the yard, once the fabrication heart of North Sea oil and gas structures, and it wants to develop offshore wind sector work alongside oil and gas: “Its proposed £50m investment in a plant to make hundreds of jackets for North Sea offshore wind developments could, it says, create up to 1,000 jobs. But, currently, it is coming to the end of work on a £150m contract to design and build a North Sea oil production platform and because of this orders gap it is having to make 350 – 400 people redundant.”
“There’s going to have to be a lot of capacity created in the UK and at the moment it just doesn’t exist,” Dennis Clark, the chairman of OGN, told Cable.
Inadequate grid capacity, delays in offshore wind farm developments and a lack of major contracts awarded to UK companies were the main factors of blame.
On the onshore side, Renewable UK – a wind power lobby group – has threatened legal action if government ministers bow to Conservative backbenchers and implement a major cut in onshore wind subsidies.
The Department of Energy and Climate Change (DECC) is later this month expected to confirm cuts to subsidies offered to large-scale renewable energy developers in the form of Renewable Obligation Certificates (ROCs).
DECC’s consultation document proposed a 10% cut in the level of ROCs available for onshore wind farms from 1 ROC per Megawatt hour (MWh) currently to 0.9 ROCs/MWh from 2013.
However, according to various reports, the Treasury has been demanding a 25% cut to the subsidies, following pressure from said Conservative backbenchers, who are mounting an increasingly vocal campaign against wind farms.
While Renewable Uk has always said a cut over 10% would make investment for many wind farms economically viable and could “kill dead” the onshore industry in the UK. It has now been suggested these deep cuts could contravene the government’s Electricity Act which specifies the secretary of state must consider the impact of any banding review on the market and the deployment of renewable energy capacity.
Rocky times ahead.
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