Offshore wind farm auction delayed

A crucial auction for a new round of offshore wind subsidy contracts has been delayed until early 2017, according to FT reports.

The paper reported this morning that the auction, which had been planned for this autumn, has seen its timetable slip as ministers continue to work on merging the Department of Energy and Climate Change (DECC) and the Department for Business, Innovation, and Skills into the new Department for Business, Energy, and Industrial Strategy (BEIS).

A source told the paper the delay was a result of the bureaucratic reshuffle, rather than any shift in the government’s clean energy policy.

The government has consistently signalled its support for offshore wind, as long as the sector can continue to deliver cost reductions. Earlier this month, the government granted approval for the world’s largest offshore wind farm, while a recent essay by former Number 10 energy and environment adviser Stephen Heidari-Robinson revealed how the previous government regarded the expansion of the offshore wind sector as crucial to the UK’s decarbonisation efforts.

Gordon Edge, economics and regulation policy director at trade body RenewableUK, told the FT the rumoured delay did not present a cause for concern at present. “Nobody is panicking,” he said. “We feel pretty confident about government support. A bit of a delay is not terrible but obviously we don’t want it to drag on.”

However, industry sources said it was unclear what changes, if any, would be made to the timetable, with the industry yet to receive any official confirmation that there will be a delay. Any significant delay would likely represent a blow to offshore wind developers and supply chain companies that have been investing heavily in building up capacity ahead of the anticipated auction round.

A delay until 2017 would mean the industry would have faced a near two year gap between successive auctions, fueling fears of a period of investment hiatus as current projects are completed.

BEIS was considering a response at the time of going to press.

The news came as fresh reports emerged alleging the government is exploring how it could withdraw from the Hinkley Point nuclear deal.

The Independent reported that civil servants are looking for a loophole or clause in contracts that would allow the government to pull out without incurring huge costs or angering Chinese investors in the project.

The paper quoted an unnamed Whitehall source as saying: “There is a working assumption of people in government that the civil service is looking for a way out, a legal loophole, a clause. They are looking for anything that will allow the government to withdraw and also allow the Chinese to withdraw while also saving face.”

A BEIS spokesperson said: “No contract has been signed and it is only right that a new government considers all component parts carefully before making a final decision.”

http://www.businessgreen.com