UK offshore wind target disappearing over horizon, says BNEF
The UK has procured just 960MW of fixed-bottom offshore wind capacity still set to be delivered in Contracts for Difference auctions since 2022
The UK will miss its 2030 offshore wind target by an eye-watering 10GW, with onshore wind also lagging but solar a potential success, according to a new BloombergNEF forecast.
The Labour government and energy minister Ed Miliband are pushing to deploy 43-50GW of offshore wind by 2030, up from 15.8GW now.
A new forecast from analytics firm BNEF predicts Labour will fall a full 10GW short of the lower bound of that target, hitting only 33GW of offshore wind capacity by 2030.
The forecast makes for even worse reading when compared to Labour’s previous pledge, which it dropped last year, to deploy 60GW of offshore wind by the end of the decade – almost double what it is now predicted.
BNEF also predicts the government will fall 4GW short of its 2030 onshore wind target of 27-29GW, hitting just 23GW.
There is some good news, however, with BNEF predicting that the UK will meet its goal of deploying 47-50GW of solar power by 2030.
Labour’s renewables goals have been set as part of a plan to all-but eradicate fossil fuels from the grid by the end of the decade.
BNEF also published a summary of a roundtable event featuring industry and government representatives that it hosted this month under Chatham House rules.
There was longer-term optimism, however, that the UK is on a positive trajectory for renewables under Labour – even if current targets are missed by a few years.
Orsted’s decision to backtrack on Hornsea 4 triggered renewed concerns about broader sectoral challenges that remain, said speakers, including underpricing of development risk, leading to unrealistic return expectations. Supply chain constraints and high interest rates were identified as other lingering sector challenges.
Banks remain hesitant to finance offshore wind projects with Chinese turbines due to security concerns, lack of precedent and concern around the guarantees provided by Chinese suppliers, said panelists at the roundtable.
Banks are waiting for equity investors and private capital to move first and de-risk the space before providing non-recourse debt financing, they said. They expressed more confidence regarding onshore turbines, however, given China’s experience in deployment.
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