Offshore wind supply chain fears emerge following CfD flop

The absence of any offshore wind bids in the latest Contracts for Difference (CfD) round will make it more difficult to retain the industry’s supply chain in the UK, RenewableUK has warned.

Ana Musat, executive director of policy at the trade body, told Utility Week that the UK faced competition for offshore wind power investment not only from the US and the EU but other jurisdictions, like the Gulf states and China.

She said: “If we look at what’s happening in the Middle East and China and the level of subsidies that are available, there is a really big concern around capital migrating over there.

“We’re focusing quite a lot on the US and the EU because they’re either right on our doorstep or quite close trading partners, but there’s all those jurisdictions that have put a lot of money behind the energy transition.

“The British government is obviously not going to invest the same amount of money because that’s not possible but it’s about how we preserve our competitive advantage and mobilise the private finance as much as possible and do it early.”

The UK could not “take it for granted” that the sector’s maturity in this country means that it will continue to be attractive for investors, Musat said: “If you’re in the supply chain, you’re going to go where the demand is and is predictable for the long term. The more we have situations like a failed allocation round, the more difficult it is.”

She said the “mood is not great” among supply chain companies in the wake of the Allocation Round (AR) 6 results.

Musat added that the UK is “not at risk of losing” its offshore wind supply chain “overnight”, some parts of which are “quite established”.

However, she said that the government must redouble its efforts, following AR6, to make it more attractive for those companies to invest in the UK by setting out a “multi-year” supply chain funding plan.

Prior to last week’s CfD round, Scottish National Party energy spokesman Dave Doogan warned that offshore wind supply chain companies will not wait for the Department of Energy Security and Net Zero “to get its sums right”.

He said: “They will be off to the US and the EU to access commercially cogent incentive packages such as those found in the Inflation Reduction Act or the EU’s Net-Zero Industry Act.”

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