Offshore wind to power 20m homes within five years, Starmer to pledge
Keir Starmer will promise to build enough offshore wind over the next five years to power 20m homes, by using taxpayer money to develop parts of the seabed owned by the crown estate.
The prime minister will announce details of the government’s energy generation company, known as Great British Energy, during a visit to the north-west designed to highlight the government’s promises on green energy.
The energy company will be given £8.3bn of public money over the course of the parliament to invest in green technologies, with a target to develop an extra 20-30GW of offshore wind power through a tie-up with the crown estate.
Even without Thursday’s announcement, the crown estate already had a target to build between 20 and 30GW of additional offshore wind power by 2030 – more than double what the UK has already installed.
So............. been pondering this overnight, and firstly have to state that this is all conjecture, but ....
The timeline is pretty short, especially given the long build out time for off shore wind, so does this mean that the Gov know's something we don't? That led me to ponder the CfD round 6 (R6) auction that is coming to a close September(ish). The bids are already in, and have been considered for viability, and appeals are being reviewed. So results should be out soon. But the Gov will, I assume, have access to the info. So could this mean that the news is quite positive?
For background, the R4 auction brought in results at £37/MWh. But for R5 the max bid was dropped from £46 to £44, despite warnings from the industry, and to be fair 'everybody', that the inflationary impacts on the industry from the Ukraine war and gas price spike were huge. So no bids were submitted. [Note, PV and on shore wind bids jumped about 25% v's R4. Also the auctions use a 2012 baseline price for comparison, that takes 'normal' inflation into account via index-linking.]
For R6 the Gov then put the max allowable bid up from £44 to £73. But the auctions work on a pot of money, so as the approved winning price gets higher then the amount of approved capacity gets smaller - the pot of money doesn't stretch as far.
So ...... could we be about to see a CfD price that's not too bad, that's to say, not near the £73 limit? Thus allowing the Gov to be a bit more bullish with their short term* predictions for off shore wind?
*2030 would seem to be short term for off shore wind, the R6 auction has two pots for delivery in 2027/28 and 2028/29. This suggests to me that only R7 and R8 could possibly also deliver some generation by/in 2030.
I'm not sure I've explained any of this properly, but hope it makes some sense, as I try to ponder the positivity of the Gov's statements, v's the relatively short timelines - and hope for a pleasant surprise in a few months time.
