Offshore Energies UK Urges More Action to Reach Government Clean Power 2030 Target
OEUK says the decision to take a national approach to pricing will encourage more wind energy investment to help the Government hit its Clean Power 2030 targets and boost growth in the critical offshore energy supply chain.
The National Energy System Operator has given 5,000 energy projects in the queue for grid connections until 29th July to submit evidence for preferential treatment.
The move is intended to prioritise 'shovel-ready' projects and scrap the first-come, first-served approach, which has allowed speculative schemes to delay viable clean energy developments.
This proposal must be matched by reforms to the Contacts for Difference (CfD) scheme and planning system to ensure the next allocation round – AR7 – delivers the scale and pace needed.
OEUK's analysis shows that to meet the CP30 goal of 95% clean power by 2030, the UK must deliver half of this target from offshore wind. This means at least 43 gigawatts of offshore wind capacity must be installed by 2030, but current projections fall short at just 35GW. The next three CfD rounds must therefore secure an additional 20GW- equivalent to powering around 15 million homes.
Only two offshore wind generation projects – GreenVolt in Scotland and East Anglia Two – have been supported by the Government's CfD scheme since 2022.
A clear regulatory framework that secures investment and maintains the UK's position as a global leader in offshore wind is now imperative, says OEUK.
It added that offshore wind is one of the UK's greatest energy success stories – generating low carbon electricity at scale, creating jobs, and revitalising coastal communities.
Fixed-bottom turbines, with so-called monopiles attached to the seabed in shallower waters, have driven the UK's rapid growth of wind energy generation to date but floating wind turbines using newer technologies, can be anchored in deeper waters with stronger wind resources, opening new areas for development.
The also have fewer environmental constraints than fixed-bottom projects and can progress more smoothly through the consenting process, said OEUK.
Speed and clarity to reform grid access and a more transparent approach with equal treatment for fixed and floating wind farms would give developers and the supply chain greater confidence to invest, it added.
OEUK's key recommendations for AR7 and beyond: Support for offshore wind: Provide assurance that sufficient funding is available for both fixed and commercial floating wind projects over the next three years, including projects to decarbonise offshore oil and gas operations, strengthen the UK supply chain, and create export opportunities.
Grid and consent reform: Improved risk sharing between developers and grid network operators plus increased administrative capacity and streamlined planning to reduce delays to grid connection. Compensation should be offered for unexpected hold ups.
Eligibility and investment: Reform eligibility criteria to allow both fixed and floating wind projects that have not received full consent to bid in the auction, extend CfD contracts from 15 to 20 years and introduce a well-balance cap and floor to transmission charges to improve investor confidence, lower subsidies and reduce costs to consumers. Introduce a well-balanced cap and floor to transmission charges.
OEUK's Wind Energy Manager, Thibaut Cheret, said:
'AR7 must be the turning point in making UK wind ambitions a reality. That means enabling floating wind to compete on equal footing, unlocking grid access, and giving developers the confidence to invest at scale.
'We're calling for clear eligibility rules that allow well-progressed but unconsented projects to bid, longer CfD terms to reduce costs to consumers, and a firm commitment to grid and consenting reform – including compensation for delays. These are the changes our members need to deliver the next 20GW.
'At the same time, we are working with our members to reduce project risk and borrowing costs as well as improving contractual relationships and promoting standardisation of modular wind turbine components to make them cheaper and faster to install.
'There is only one energy supply chain for offshore wind and oil and gas – and it cannot be allowed to decline. With the right reforms and a pragmatic energy strategy which supports homegrown oil and gas alongside the acceleration of UK renewables, the North Sea can remain a global energy powerhouse, supporting economic growth, jobs, and our climate goals.' ScotWind: OEUK supports the ambition of the ScotWind leasing round and is calling for clarity on delivery timelines, grid access, and supply chain investment to ensure projects can rapidly move forward.
OEUK supports the ambition of the ScotWind leasing round and is calling for clarity on delivery timelines, grid access, and supply chain investment to ensure projects can rapidly move forward. INTOG: OEUK backs INTOG schemes using wind energy to decarbonise offshore oil and gas production. We are urging government and regulators to ensure these projects are prioritised for grid access and CfD eligibility, and that planning processes reflect their dual role in emissions reduction and clean power generation.
OEUK backs INTOG schemes using wind energy to decarbonise offshore oil and gas production. We are urging government and regulators to ensure these projects are prioritised for grid access and CfD eligibility, and that planning processes reflect their dual role in emissions reduction and clean power generation. Celtic Sea Round 5 of Celtic Sea wind auctions held last month aims to unlock the potential for floating offshore wind off the coasts of South Wales and Southwest England. The Crown Estate has selected Equinor and Gwynt Glas to develop two 1.5GW floating wind farms. The leases come with grid connections already approved, but only two out of three leases on offer have been taken up.
TNUoS: Transmission Network Use of System Charges. Transmission has a cost which is paid by the generator and the user which appears in electricity bills. This cost is expected to increase dramatically in future years as more energy is brought from Scotland to England. The connection cost for the generator rises for remote areas but in heavily populated areas generators are paid to connect. The price difference must be adjusted with a proposed cap and floor system that would introduce an upper maximum cost to Scottish projects.
Transmission Network Use of System Charges. Transmission has a cost which is paid by the generator and the user which appears in electricity bills. This cost is expected to increase dramatically in future years as more energy is brought from Scotland to England. The connection cost for the generator rises for remote areas but in heavily populated areas generators are paid to connect. The price difference must be adjusted with a proposed cap and floor system that would introduce an upper maximum cost to Scottish projects. Review of electricity market arrangements (REMA): The government is still to announce the full outcome of its REMA consultation beyond the already published decision on zonal pricing. OEUK is calling for introduction of 'deemed contracts for difference' (based on potential, not actual output). This would mean wind energy producers being paid according to their potential capacity in a system that would give producers the opportunity to benefit from high global wind energy prices when they are available and keep a proportion of the additional profits
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