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An extra 25GW of offshore wind energy could be accommodated around the UK’s shores, in addition to the 8GW already built or planned, Energy Minister Lord Hunt announced today.

The findings, a result of the Government’s Strategic Environmental Assessment (SEA) will enable the Crown Estate to proceed with the third round of leasing in UK’s waters for offshore wind farms.

Offshore wind has the potential to provide the UK with up to 70,000 new jobs and £8bn in annual revenues.

The new licensing regime for the cables to connect offshore wind farms to the mainland also starts today. The competitive tender process, run by Ofgem, has the potential to save generators £1bn by getting the best deal. It will also attract new entrants with transmission expertise and, offer longer term stable investment opportunity.

Lord Hunt, Energy and Climate Change Minister will say at the British Wind Energy Association wind conference:

“Offshore wind is fundamental to delivering our target of 15% of renewable energy by 2020, and looking ahead to 2050 to reducing our carbon emissions by 80%.

“We’re already the world’s number one offshore wind power. With the right support, we can grow the industry even further, supporting tens of thousands of high value, green manufacturing jobs. This presents a huge opportunity for the UK Industry.”

Alistair Buchanan, Chief Executive of Ofgem said,

“The offshore transmission regime will deliver significant cost savings to current and future consumers and renewable generators and make a real impact in Britain’s drive to tackle climate change. It’s a huge opportunity for investment under a long-term, low-risk regulatory regime.”

The Crown Estate launched Round 3 of offshore wind in June 2008. This decision means they can proceed with negotiations and award development rights to the market.  Any proposals for developments will be assessed by the relevant authorities to ensure they are located in appropriate places.

The Government is also publishing today A Prevailing Wind: Advancing UK Offshore Wind Deployment.  The document sets out work that will enable the necessary expansion of the industry.

Rob Hasting, Director of the Marine Estate at the Crown Estate said,

“The Crown Estate is delighted that 25 GW has been confirmed and also agreement on the ‘Go-Active’ date has been reached for the offshore transmission regime. These are significant milestones in delivering one of the major components of the UK’s offshore renewable energy programme, including Round 3 of offshore wind which combined with Rounds 1 and 2 aims to deliver 33GW by  2020, a quarter of the UK electricity needs.”

Building the cables - Offshore Transmission Regime Tender Process

Following a four year consultation, companies will now be able to bid to design, finance, construct and maintain the transmission assets. For existing projects they will bid to own and maintain the assets.

The National Grid’s function as System Operator has now been extended to offshore and will play a key role in the development of the new regime. It will now be responsible for overseeing the connections to ensure that all generators that want to connect to the onshore grid can. 

This regime is designed to be flexible to allow generators to choose when and how their projects are tendered. It will benefit consumers, through more cost effective electricity and help developers by removing risk and spreading the costs of their projects.

International Renewable Energy Agency (IRENA)

The UK intends to join the International Renewable Energy Agency (IRENA) shortly and aims to sign the official agreement as soon as possible. This underlines the commitment the UK has made in tackling climate change, and to supporting the cooperation and innovation that will be needed to accelerate the mass deployment of renewable energy technologies worldwide.

Notes to Editor:

Offshore Energy SEA: decision on 25GW of new offshore wind

1. The Offshore Energy SEA assessed a draft plan/programme for 25GW of new offshore wind capacity (on top of existing plans for 8GW), oil and gas licensing and gas storage in hydrocarbon reservoirs.

2. The level of deployment of offshore wind will depend on a range of factors, such as market take-up, trends in the UK’s energy consumption, energy export potential, and addressing regulatory and supply chain constraints.

3. The figures of 70,000 new jobs and £8bn in annual revenues, come from the Carbon Trust Report, "Offshore wind power: big challenge, big opportunity" Oct 2008.

4. A Prevailing Wind: Advancing UK Offshore Wind Deployment, a policy document published today, sets out the Government’s response to the SEA final recommendations on offshore wind, contained in the Offshore Energy SEA Post Consultation Report, and identifies the key areas of work that Government believes necessary to deliver the 25GW of new capacity.

5. To access the full policy document and the SEA post consultation response, please see the following link
http://www.berr.gov.uk/energy/sources/renewables/policy/offshore/future-rounds/page42785.html
http://www.offshore-sea.org.uk/site/scripts/book_info.php?consultationID=16&bookID=12

Offshore Transmission Regime

6. The first tender round covering existing projects will begin shortly for transmission assets worth an estimated £1 billion. Each tender round is likely to run for about 12 months.

7. First OFTO licences will be issued by June 2010, when the new regime becomes fully operational and it becomes prohibited to transmit electricity offshore at 132kV and above without a licence.

8. Generator will come to Ofgem with its connection agreement, Crown Estate Lease and any consents and other information it has to discuss the design and specifications of the transmission assets it is looking for. Ofgem will then market the tender and evaluate the bids. It will grant the OFTO licence to the successful bidder.

9. For projects already built (or being built) Ofgem places a value on the assets which the OFTO will pay to the generator. The OFTO then recovers this money over the 20 year revenue stream.

10. We are having this "staggered" start to ensure that existing projects can be accommodated into the regime for when it starts properly at Go Live.

11. Information on how to apply for the tender process, can be found on the Ofgem website http://www.ofgem.gov.uk/Pages/OfgemHome.aspx
International Renewable Energy Agency (IRENA)

12. The International Renewable Energy Agency (IRENA) was established at a Founding Conference in Bonn on 26 January 2009.  IRENA aspires to become the main driving force for promoting a rapid transition towards the widespread and sustainable use of renewable energy on a global scale. The Agency will be formally established once 25 countries have ratified the statutes. There are currently over 100 signatory states. 

13. The UK has participated fully in the process for establishing IRENA in 2008 to date and will become a signatory state at a signing ceremony in Berlin shortly.

14. More detailed information is available on www.irena.org

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