UK offshore wind capacity expands with latest Government announcement

Our Policy Manager, Alex Goodwin, says:

 

"The latest offshore wind contracting announcement was undeniably a make or break in maintaining progress towards Clean Power 2030, with important choices to be made in replacing aging power generation at a fair price for all.

 

As a signatory of the Electrify Britain campaign, today's agreed strike price of £91 per MWh indicates the scale of savings that can be made per unit of energy if we continue on our path towards an increased share of renewables in the system. By contrast, according to Government figures, replacing aging power generation with new gas turbines would be significantly more expensive at £147 per MWh.

 

However, we also know that last year saw a £1bn curtailment cost (turning wind off when the country is not able to use up all the power). Maximising the benefits of offshore wind will therefore not happen in isolation; it requires a system wide approach to balancing supply and demand through flexibility.

 

Government recently set a target for 12GW of consumer led flexibility. This target quantifies how much shifting is needed from consumers to keep the grid matching supply and demand, as more intermittent renewables come online. Today's level sits around 2GW.  

 

Ofgem has been clear: without flexibility, clean power goals cannot be met. Renewables will always be intermittent – the natural resources of sun and wind are abundant but they vary in their availability and volume.  Smart meters are the key to matching that supply with the country’s demand.

 

Government reported a saving of £1.6 billion in demand-shifting benefit through smart meter use in 2024 so wider utilisation of smart technology will ensure these savings increase as we continue to build the UK's renewable generation through schemes like the Contracts for Difference.

 

To maintain momentum on the back of today's announcement, industry and Government should now turn attention to collectively promoting the flexibility the power industry is now offering its customers. This will ensure that today's 8.4 GW of renewables go directly towards meeting increased demand while allowing customers to access energy at its cheapest, via smart meters."