The government has been urged by one of its own MPs to ensure that the upcoming Contracts for Difference (CfD) auction pot for floating offshore wind (FLOW) is big enough to avoid it being swallowed up by a single project.
Last Thursday, the government announced an increase in strike price caps for a range of renewable technologies in the CfD Auction Round (AR) 6.This included a 52% uplift for the FLOW strike price to £176 per megawatt hour, meaning this is the maximum amount such generators will be paid under a CfD.
In a House of Commons’ Westminster Hall debate on FLOW, North Devon MP Selaine Saxby said the new administrative strike price level offers the “potential to unlock a record level of investment” in the fledgling technology.
However while the government has announced a strike price for AR6, it won’t set a budget for next year’s auction until March.
As such, Saxby called for the AR6 floating wind budget to be set “large enough that it is not consumed by one project, so that we can see as many eligible projects as possible get afloat.”
She added that the government must ensure that the budget is “not set so tightly that it forces violent competition during this fledgling stage of FLOW’s development.”
Saxby, who chairs the Celtic Sea All Party Parliamentary Group that champions FLOW, also called for the floating wind part of AR6 to be brought forward from its scheduled date of next year because of concerns that “even the one-year delay may cause a far greater delay to these projects due to international supply chain pressures.
“We cannot lose our first mover advantage and watch development of this exciting technology float overseas,” she said, adding that the UK currently has 70MW of the 200MW of FLOW deployed worldwide so far.
And the Tory backbench MP urged the government to class the FLOW development in the Celtic Sea between south Wales and Devon, which is being lined up as one of the UK’s key locations for floating wind, as a nationally significant infrastructure project.
Junior energy minister Andrew Bowie rejected Saxby’s call to bring forward the date of AR6.
He said: “The success of renewables, including in this country, has been the predictable options we have had. Developers are already planning for AR6 in March next year, and bringing the round forward any further could jeopardise it, not amplify it, so we are reluctant to do that.”
Meanwhile, Kirsty Blackman, Scottish Nationalist Party MP for Aberdeen North, said that not being able to get grid connections is “genuinely putting a number” of offshore wind projects “at risk”.
But in some cases, the issue is lack of communication, rather than length of time, she said: “The length of time is not ideal—in fact, it is pretty bad—but if they will not even come back to say when the connection could be made, that causes problems. Even an increase in the communication on that would help investor confidence and would help with some of the final decision making needed in order for the project to go ahead.”