“Onerous” new government regulations, which make all floating wind power projects spell out their supply chain plans, threaten to “impede” the fledgling sector’s development, Labour’s shadow energy minister has warned.
During a House of Commons debate on Tuesday (28 June) to approve the Contracts for Difference (CfD) scheme’s new regulations, Alan Whitehead raised concerns about the government’s move to set no minimum size threshold on a requirement that floating offshore wind schemes should submit supply chain plans.
Under the existing CfD regulations, fixed bottom offshore wind projects must only submit a supply chain plan if they are 300MW or larger when seeking to secure a CfD .
However, the updated CfD rules stipulate that this minimum threshold should be scrapped for floating offshore projects seeking to access the support scheme for low-carbon generation.
The government says it wants to cut nascent floating wind sector’s costs by making developers submit supply chain plans, which detail matters such as proposed infrastructure improvements and apprenticeships.
However, Whitehead raised concerns that the main opportunities for developing floating offshore projects are in the Celtic Sea, off the Welsh and Cornish coasts, where existing port space and the wind industry supply chain are both constrained.
One problem, he said, is that the size of the floating turbines’ platforms means that they must be fabricated in a port rather than shipped in whole.
Yet the government’s rules would force floating wind developers to submit plans akin to much larger fixed bottom wind farms in the North Sea, which benefit from a much more developed supply chain, Whitehead said: “Floating wind generation is developing under circumstances where the supply chain is not favourable to its support.
“Current thinking impedes that development.
“Somewhat perversely the government have decided that the threshold for such generation’s supply chain plans should be nil.
“The imposition of a supply chain plan for offshore floating wind based on zero capacity rather than 300 MW seems a little discriminatory against that generation in comparison with the requirements placed on standard offshore wind generation.”
The Southampton MP called for the onus for developing a floating offshore wind supply chain to be placed on the government rather than developers.
Responding to Whitehead’s concerns, energy minister Greg Hands said the “smaller size” of floating wind projects means they will be subject to a “bespoke, less burdensome process” than fixed bottom schemes.
“We do not want to make a regime that is too onerous on those smaller projects. That is why there is a lighter touch regime and questionnaire.”
But he defended the government’s move to make all floating wind projects submit a supply chain plan.
“It is a relatively nascent industry and ensuring that there is a good supply chain right from the beginning and doing what the government can do to steer it in that direction, is really important.
Accusing Whitehead of adopting a “laissez-faire” approach to the sector, Hands said: “There is a good reason for government to be there right at the beginning to make sure that there is a strong supply chain for the UK to cement its place as a world leader in floating offshore wind, as we have been a world leader in fixed-bottom offshore wind, with Europe’s largest installed capacity.
“Setting a different limit at which the supply chain must be submitted makes perfect sense if we are to capture floating offshore wind projects and make sure that there is taxpayer value for money. That is in all of our interests, not just the government’s.”
He also said that the government has committed £160 million to a fund to boost infrastructure and supply chains for floating offshore wind projects.
The new regulations, which set out revisions to the framework for the new annual rounds of CfD auctions, will come into force on 22 July.