GWEC: Failure of UK government’s Offshore Wind Auctions Must be a Watershed Moment

CrossWind farm

In a recent setback for the renewable energy sector, the UK government’s latest offshore wind auctions have failed, prompting industry leaders to stress the importance of collaborative efforts between governments and the wind energy industry to drive global growth in offshore wind capacity.

Despite repeated warnings from the offshore wind industry that the price caps set by the UK government were unsustainable for project investment, policymakers proceeded with even lower price caps compared to previous auctions. This decision came at a time when wind developers were grappling with inflationary pressures and rising supply chain costs.

The failure of these auctions in the UK is viewed as a cautionary tale for regions with ambitious offshore wind goals, such as Asia-Pacific (APAC) and Latin America. Industry experts are urging these regions to learn from the UK’s mistakes and emphasize partnerships between governments and the industry to accelerate the adoption of renewable energy.

The Global Wind Energy Council’s latest Global Offshore Wind Report forecasts an installation of an impressive 380 GW of offshore wind capacity over the next decade. Achieving this potential will require unprecedented cooperation between governments and industry players, both domestically and internationally. The UK’s recent auction failure serves as a reminder that sustainable industrial growth on such a scale necessitates collaboration.

Ben Backwell, CEO of the Global Wind Energy Council, expressed his disappointment with the UK government’s approach, stating, “The UK government didn’t listen to repeated industry warnings about inflationary pressures and increased capital costs, so it is no surprise that the auction has been a failure. This is a huge missed opportunity, particularly as offshore wind remains much cheaper than gas.”

He continued, “The UK is competing with other markets around the world for clean energy investment. The UK needs policies that will attract investment and jobs, not a race to the bottom in pricing that makes investment impossible.”

The global wind industry recently celebrated a milestone, surpassing 1 Terawatt of global wind capacity. This achievement underscores the pivotal role of wind energy in a sustainable global energy system. Industry leaders are calling for a robust industrial strategy that recognizes wind energy’s transformative potential in economic development and ensures sustainable sector growth.

The failure of the UK’s offshore wind auctions serves as a stark reminder that affordable and clean wind energy is not without its challenges, and it requires a united effort from governments, industry stakeholders, and investors to create the right conditions for success. The global energy transition hinges on cooperation and smart policy decisions to harness the full potential of offshore wind power.

“Government seems to have believed the spin about falling offshore wind costs, and set a low cap on bids for new contracts, thus calling the wind industry’s bluff by accident. Doubtless, the industry will now beg for new and higher subsidies, blaming inflation and supply chain problems. Government should not believe this spin,” Andrew Montford, director of Net Zero Watch, said.

“The CfD auction results are symptomatic of a wider failure of wind power around the world. The industry is in a crisis from which it is unlikely to recover, because its costs are simply too high to be sustainable. The time has come for Government to admit that renewables have failed, and to start looking at realistic energy policies,” Dr John Constable, energy editor of Net Zero Watch, said.