The global transition to renewable energy is stalling: Britain’s is not working either
7 May 15:15
The UK’s goal of achieving a completely clean electricity sector by 2030 is under even greater threat after Danish company Orsted A/S canceled plans to build a large-scale wind farm in the North Sea on Wednesday. This is reported by "Komersant Ukrainian" with reference to Bloomberg.
The rapid construction of a record number of offshore wind farms is a central element of the ambitious plan of UK Energy Minister Ed Miliband. While meeting the clean electricity target was already a challenge, canceling one of the world’s largest wind farms will make it even harder. And since Orsted cited insufficient profitability as the reason for stopping the project, it could mean that British consumers will have to pay even higher prices to realize the government’s plan.
“The goal of clean electricity has definitely become more distant in terms of the amount of capacity that needs to be commissioned. The challenge looks even greater today,”
– says Pranav Menon, senior research fellow at Aurora Energy Research.
The UK was already behind its wind energy target
According to BloombergNEF’s forecasts, the UK is already falling short of its targets, and this was even before Orsted canceled a major project. According to the data, in 2030, the government planned to have about 40 gigawatts of offshore wind power capacity, but current forecasts show much lower figures.
The government is “absolutely confident” that it will be able to meet the 2030 clean electricity target because Britain has a strong portfolio of projects, according to Miliband.
“Our mission is more than just one project. It’s about a roadmap for the country,”
– Miliband said while speaking to journalists in Oslo.
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Political importance of achieving the goal
It is politically important that this goal is achieved. Britain is continuing to implement its plans to achieve zero emissions despite the apparent opposition to green energy from US President Donald Trump. Last month, the Trump administration halted the construction of the Empire Wind wind farm off the coast of New York, which came as a shock to the industry.
The UK aims to get 95% of the country’s electricity from low-carbon sources, such as renewables or nuclear power, by 2030. To achieve this goal, at least 43 gigawatts of offshore wind power capacity is needed, almost three times the amount already in operation. Without the Orsted Hornsea 4 project, the UK is currently on track to reach almost 29 gigawatts in operation by 2030, based on the current project portfolio, unless any other developer decides to cancel their plans, according to Aurora’s analysis.
This means that over the next two offshore wind auctions, the government will need to procure about 7 gigawatts of capacity each, matching the record level set in 2021.
“The news that Orsted will not proceed with the Hornsea 4 project in its current form reflects the significant challenges facing the offshore wind sector. The loss of such a large project will further raise the stakes for the upcoming round of FITs auction.”
– said Dhara Vyas, executive director of the industry group Energy UK.
Project implementation is at risk
Even if the government is able to procure a record amount of capacity, these wind farms will need to be built at a pace rarely achieved in an industry where projects often fall behind schedule. The world’s largest project, Dogger Bank, was originally scheduled to be completed by 2026. But after repeated delays, the first of three phases of the 1.2 gigawatt wind farm is not yet complete.
The Clean Power Plan also promises to reduce consumer bills, but the need to procure as much capacity as possible could undermine competition. The canceled Hornsea 4 project would have sold electricity at about £80 per megawatt-hour, adjusted for inflation, which is only slightly below average electricity prices over the past year. If developers need a higher price for further investment, then higher subsidies will ultimately be passed on to consumers’ bills, making it harder to achieve the government’s priority of reducing consumer energy costs.
