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The British government on Tuesday awarded price support contracts for a series of offshore wind farms as part of a wider package for renewable energy. Disappointing auction Last year there were no takers for offshore wind projects.
“The government has shown that it takes renewable energy seriously,” Duncan Clarke, head of Britain and Ireland for Danish wind developer Ørsted, which won backing for two projects in the auction, said in a statement.
Overall the government has supported 131 renewable energy projects including offshore wind as well as solar and tidal energy. RenewableUK, an industry group, estimates that the installations, if completed, could attract £14 billion, or about $18 billion, in investment and power to around 11 million homes.
Prime Minister Keir Starmer has a government Bet on offshore wind As the “backbone of the clean energy mission,” there will be a shift from oil and gas to renewable energy sources within a few years.
The governing Labor Party realizes that if it wants to maintain Britain’s leading position in offshore wind installations, it needs to significantly increase price support to help developers cope with an estimated 40 percent increase in the cost of building these projects in recent years. Offshore wind in Britain is attractive because of the abundant wind and large areas of shallow seabed off the coast, particularly in the North Sea. Investors are also attracted to the profits of these projects, which can cost billions of dollars.
Vergron chief executive Stephen Bull, who has secured backing for a floating offshore wind farm off Scotland called Green Vault, said in an interview that the auction may not have reversed the impact of last year’s failure, but the results put Britain “on the right side. track.”
In Britain, developers of renewable energy projects are guaranteed to receive a fixed price for their electricity, providing protection for investors.
It will take more than one successful event to revive the industry Britain and globally suffered a series of shocks. Some offshore projects in the United States have been stalled or canceled due to high costs.
During the summer, after large wind turbine blades shattered and debris was scattered off the coast of New England, the building of what was likely to be the first large offshore wind farm in the United States at Vineyard Wind near the island of Nantucket, Mass., was halted.
A wind farm under construction in British waters called Dogger Bank has also suffered setbacks. Two of the blades, each more than 300 feet long and weighing ten tons, have recently been damaged in accidents. All of these events were supplied by Blades GE Vernova.
Analysts on Tuesday hailed the results of the auction as a success, but Britain will need to increase the pace of building projects to achieve its goal of quadrupling offshore wind capacity by 2030. It may prove even more. Challenging to build power lines which will transport the electricity generated by these facilities to the population centers.
After a failed auction last year, the government significantly increased the level of price guarantees it was willing to allow. In recent auctions, floor prices for offshore wind ranged from an estimated £82, or $108, per megawatt-hour, electricity metric. Over the past year, power prices in Britain have averaged £70 per megawatt-hour, according to Drax Electric Insights, a website that tracks such metrics.
The government allowed developers such as Oersted and Spanish utility Iberdrola to bid for new price guarantee levels for projects that received such support before inflation rose. The new awards were 58 percent higher than the original awards given in 2022, estimated Deepa Venkateswaran, an analyst at Bernstein, a research firm.
Post Britain awards 10 contracts for offshore wind projects appeared first New York Times.