Energy Minister Charles Hendry talks to Ben Blackwell about the challenges and opportunities being created by the UK’s offshore wind sector, and what the Government is doing to help its growth
Question: What do you think has been achieved for the UK’s offshore wind sector since the Coalition Government took power?
Charles Hendry: We have achieved a great deal in two years. The UK is now the world leader in offshore wind with more capacity built than any other country and rated the best place to invest in offshore wind in a recent Ernst & Young report.
During the 2011/12 financial year, we have seen announcements of planned and confirmed investments to the tune of almost £2 billion, which could support over 8,000 jobs. We have seen major international energy companies making it clear they want to do business in the UK, including Siemens and Gamesa. We’ve also opened the world’s largest offshore wind farm at Walney and seen 817 megawatts deployed since May 2010.
Q: What are some of the key Government initiatives currently under way?
A: The Offshore Wind Component Scheme supports the development and demonstration of key component technologies that will reduce offshore wind costs. The first call for proposals closed in December 2011 and resulted in £4 million of grant awards to five companies, including David Brown Gear Systems, NGenTec, OSBIT Power and OGN North Sea. The second round was launched on May 10 with a budget of up to £5 million. We also recently made an agreement with the United States to work together on the development and demonstration of floating offshore wind turbine technology. We made £60 million available to support the development of new offshore wind manufacturing projects on the English coast, in parallel with similar support by the Scottish Government.
We’ve opened the world’s largest offshore wind farm at Walney and seen 817 megawatts deployed since May 2010
Q: What about the Offshore Wind Cost Reduction Task Force – how confident are you that the aims of the task force can be met?
A: The industry-led task force looks at how we can reduce the cost of offshore wind to £100 per megawatt hour by 2020. This is challenging but I am optimistic it can be achieved. We shouldn’t forget that, as we are seeing with onshore wind, there is every expectation that costs will reduce as technology improves and mass-deployment takes place. The task force considered how we can best deliver cost reductions more quickly by focussing on a number of key areas with the greatest potential. I very much welcome the comprehensive task force report and we will be looking to work with industry to ensure we can all act on its recommendations.
Q: What is the Government’s main focus in terms of ensuring that the UK supply chain is ready for Round 3?
A: We want to see a substantial increase in UK content in offshore wind farms. The sector recently confirmed the vision that UK firms should provide more than 50 per cent of the content of future wind farms. This sends a strong signal of the confidence developers have in the UK supply chain and reflects recent progress. Having started from a low base, UK content in offshore wind is growing; for example, Robin Rigg wind farm reached a level of 32 per cent, but we want to improve on that further. I was pleased to see the NORSTEC network that was recently established, with the aim of creating a major new renewable energy centre in the North Sea.
Q: How confident are you in the current planning system’s ability to process large amounts of consent applications for offshore wind projects in a timely fashion?
A: The Government is committed to giving a greater say to people, communities and councils through a faster and more democratically accountable planning system. This is why we have abolished the Infrastructure Planning Commission and replaced it with a new National Infrastructure Planning Directorate within the Planning Inspectorate. Round 3 will lead to a significant increase in applications and government will keep the issue of resourcing under review. I am confident that the reforms will streamline and speed up the planning system.
Q: Finally, do you think the Government is doing enough to tell the “good-news” story around offshore wind in terms of job creation and manufacturing?
A: I am certainly using every opportunity I have to tell investors about what a great place the UK is to invest. This month, I will speak to delegates at the Global Offshore Wind Conference to set out that story. Recently, we hosted energy ministers from the world’s 23 leading economies at the Clean Energy Ministerial in London, where we had the opportunity to take delegates out to see UK wind farms and to talk to them about the work we are doing.