A prevailing wind – DECC announces Round 3 policy decisions

The Minister of State for Energy and Climate Change outlined yesterday the strategy for expansion of offshore energy deployment in the UK with the publication of the policy document “A Prevailing Wind: Advancing UK Offshore Wind Deployment”. The policy document follows on from the Government’s Strategic Environmental Assessment (SEA) and the responses to its public consultation, and among other things announces the following:

• The Government has adopted a programme to add 25GW of additional offshore wind capacity in the territorial waters of England and Wales and the UK Renewable Energy Zone, within waters up to 60m deep. This decision has now been placed before Parliament, and should now enable The Crown Estate, as the leasing authority, to proceed with the Round 3 competition for granting Zonal Development Agreements to preferred bidders by the end of 2009.
• “Go Active”
• for the new offshore grid regime which involves Ofgem appointing new offshore grid companies (OFTOs) through competitive tendering. DECC considers the OFTO approach to lead to a net estimated benefit of £1 billion.
• National Grid, working with The Crown Estate, is to develop an “Offshore Development Information Statement” by the end of the year, which will set out a strategy for offshore transmission.
• Additional sources of low cost finance to secure funding for the delivery of the new offshore network are being looked at by DECC and Ofgem, including working with the European Investment Bank.

In order to achieve the UK’s offshore ambitions, the Government emphasised the need for certain enabling strategies, in particular:

• the right level of financial support
• the right climate for investment in offshore wind to stimulate research, development and deployment to improve reliability and reduce cost
• a smooth and effective planning process to streamline and improve the planning process for Nationally Significant Infrastructure Projects
• the coordinated development of the on- and offshore electricity networks
• the right balance between a range of marine interests, which have been considered throughout the SEA process
• the quicker development of the manufacturing base to deliver projects, and
• the maturing of the supply chain and associated infrastructure to increase capacity and maximise business benefits to the UK.

The Government is also planning to publish the Renewable Energy Strategy later this summer that will set out wider measures to be adopted in order to deploy renewables in the UK to meet its 15% renewable energy target by 2020.