RenewableUK Cymru are incredibly disappointed to learn there are no floating offshore wind winners in this year’s UK Government renewable energy auction, including Erebus, Wales’ first planned floating windfarm off Pembrokeshire.
Today the Department for Energy Security and Net Zero announced the results of the UK’s fifth Contracts for Difference (CfD) auction round (AR5) to incentivise the build out of renewable energy projects and deliver our net zero targets.
The flagship Welsh 100MW test and demonstration windfarm, due to be commissioned in 2026, was the leading opportunity for Wales to kick start a burgeoning industry, producing clean electricity, driving investment, delivering on Wales’ net zero targets and unlocking the first of thousands of jobs and opportunities for local people.
Wind energy is a central component of the Welsh Government’s adopted target to meet 100% of our energy needs from renewable sources by 2035. Despite a UK Government target to deploy 50GW of offshore wind by 2030, including 5GW of floating offshore wind, this latest auction has produced no offshore wind winners.
RenewableUK Cymru’s Director Jess Hooper said:
“As Wales’ first floating offshore wind project, Erebus is entirely dependent on this form of revenue support to succeed, and the success of Erebus is critically important not only to Wales and the wider South West region, but also for the UK Government’s own floating offshore wind targets. This result will now delay investment decisions for developers, supply chain companies, ports and infrastructure, all with knock-on effects.
Despite the industry’s clear warnings, the UK Government has not taken inflationary costs and supply chain squeeze into account in this latest auction, focusing solely on competition through cost reduction. This is a huge wake-up call that if we want to deliver on our targets in this decade of delivery we need to see considerable reforms to the CfD auction design and industrial strategy to support its development and deployment.”
Hailed as the pioneer of floating wind development in the Celtic Sea, the Erebus project boasts the next generation of 14MW turbines on floating platforms 40km off the coast, generating enough clean energy to power 93,000 homes and contributing to the UK’s floating offshore wind targets and energy security.
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Notes to Editors
- TotalEnergies and Simply Blue Group established Blue Gem Wind in March 2020 to develop floating offshore wind projects in the Welsh waters of the Celtic Sea.
- The Erebus project has already successfully secured a seabed lease and all the necessary environmental and statutory consents. A successful auction contract from the UK Government was the final hurdle needed for the project to unlock the private investment to proceed.
- The renewables auction is an annual process in which the government attempts to incentivise private sector investment in renewable energy projects by offering financial support contracts known as “contracts for difference” (CfDs). Developers are offered a guaranteed maximum price for energy generated, called a strike price.
- Floating Offshore Wind technology is still at the early stages of test and development and is dependent on the Contracts for Difference (CfD) mechanism for nosupport.
- Only 80MW of floating offshore wind is in operation in the UK today. With Erebus the UK would more than double its current capacity.
- RenewableUK has repeatedly warned that the UK’s market framework is flawed. In light of global inflationary pressures, the budget and parameters set for this year’s auction was too low to attract bidders.