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The government’s response to last week’s Contracts for Difference auction “went down like a lead balloon” at a meeting with offshore wind developers on Tuesday (12 September), an industry source has told Utility Week.
In an emergency House of Commons debate on the same day, energy minister Graham Stuart was accused of “complacency and chutzpah” by one opposition MP after hailing the latest auction round as a “triumph,” despite the complete absence of offshore wind bids.
The government is understood to have taken a similar line at the meeting with offshore wind developers, which was attended by Stuart. A source from one of the companies said its characterisation of the auction as a success due to the number and volume of contracts awarded to onshore wind and solar projects “went down like a lead balloon”.
The source said they “don’t think anyone was expecting the government to say this was a disaster” but the meeting seemed to be just “window-dressing”.
They said there was no real acknowledgement of mistakes on the government’s part and developers did not get the reassurance they were looking for that their concerns would be addressed: “I think the industry wanted to feel that from government and it didn’t get it.”
The source said that “we need to be looking ahead and there just didn’t seem to be this sense of urgency on what do we do now.”
They continued: “It would be wrong to position yesterday’s meeting as crisis talks, whereby you fix all the problems, but at the same time, what industry needed to hear yesterday was the government saying: ‘Okay. We’ve seen how the world has shifted. The next step is working together to make sure we bring forward plenty of offshore wind next time.’ And there just didn’t seem to be a sense of that yesterday.
“There is a lot of frustration around that the signal we needed to hear was not given,” they added.
During the emergency debate, Stuart told the House of Commons that the auctions, had been “highly successful.” He described the “record round,” which secured 3.7GW of renewable capacity across 95 projects, as a “triumph.”
The fifth allocation round was the first to be held on an annualised basis and Stuart said it had provided “valuable learning” for subsequent rounds, including AR6, which is due to open in six months’ time.
He said: “The projects take multiple years to be developed, and none of them has disappeared,” adding: “We look forward to a strong pipeline of technologies being able to participate.”
But opposition MPs lined up to slam the minister’s comments as deluded.
Ed Miliband described Stuart’s statement as a “a load of nonsense” and an “act of economic self- harm on the part of the government”, which could have been avoided if ministers had heeded industry warnings that the maximum strike price for offshore wind had been set too low.
Labour’s shadow energy secretary added: “They could have raised the price in the auction and it would still have saved billions of pounds for families, but they refused to listen.”
Former Green party leader Caroline Lucas accused Stuart of “turning complacency and chutzpah into a new art form,” while Hywel Williams from Plaid Cymru said the government was living “on another planet”.
Click here to read previous reaction to the auctions.
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