2030 target risks long-term offshore wind roll out, Orsted warns

Putting too much focus on the government’s target of 50GW of offshore wind by 2030 could be “actively detrimental” in the long-term, Orsted executives have warned.

Olivia Breese, interim Europe CEO of the renewable power giant, said that trying too hard to hit the 50GW target by the end of the decade could make subsequent targets less achievable.

She also questioned whether the 2030 target is still feasible when speaking at Aurora Energy’s Spring Forum.

She said: “This runs a real risk of being actively detrimental to the industry, which is coming through a challenged time.

“The industry has all the potential to come through it stronger. Myopically […] focusing on achieving or failing 2030 runs the risk of reactive short-termism thinking that is going to make it very, very hard for us to meet our 2040 or 2050 targets, which actually are achievable.

“They are achievable if we address the bottlenecks, but we will make them even harder to achieve if for the next seven years we operate in an entirely reactive environment.”

Breese, who also heads Orsted’s green hydrogen and e-fuels business, said focusing only on short term targets would be the “worst thing” and that it doesn’t “matter hugely” if the 50GW target is met a couple of years later than 2030.

Even if the UK and the EU do not meet stretching 2030 decarbonisation targets, they will be “well on the road” and more importantly will have set themselves up for success in later phases, she said

Duncan Clark, head of UK & Ireland at Orsted, added that rolling out 50GW by 2030 is “a massive ask”.

He said: “Boosterish style targets are not enough. You don’t make a big new investment in a factory, a 10-year journey for developing skills and adding your own supply chains to feed that factory because a politician somewhere has said we’re going to go for this target.

“You make it because you’ve got a customer about to place a contract with you or has placed that contract.”

Clark said the industry’s confidence could be bolstered if the government could double the length of Contracts for Differences (CfDs) to reflect the growing lifespans of offshore wind projects.

However, Alice Delahunty, National Grid UK electricity transmission president, said that the 2030 offshore wind target is not yet “totally unachievable”.

“I honestly don’t think 2030 is totally out of sight,” she said.

Orsted announced in December that it would go ahead with its Hornsea 3 offshore wind farm in the North Sea after earlier pausing work on the 2.9GW project due to concerns that spiralling costs meant its CfD, awarded in 2022’s allocation round (AR) 4, was no longer viable.

The Danish company awarded a final investment decision after it was allowed to shunt a share of the capacity at the 231-turbine project into the upcoming and more generous AR6.