Friday, 15 October 2010

Support needed for offshore wind industry

More support is needed to boost a "home-grown" offshore wind industry in the
UK, to reduce the high costs of the green energy source, a report said

Offshore wind costs have risen sharply over the past few years, despite
expectations when the technology was first deployed a decade ago that the
cost of building wind farms and generating electricity would fall
substantially over time.

Around 80 per cent of the average offshore wind farm is currently imported
from abroad, and support is needed to develop innovation and a better supply
chain in the UK to help cut costs, the report from the UK Energy Research
Centre said.

The industry has been at the mercy of commodity price increases,
fluctuations in currencies and supply chain shortages and bottlenecks, as
well as delays in the planning system which saw the average wind farm take
seven to nine years to get up and running.

The report's chief author, Robert Gross, head of technology and policy
assessment at UKERC, said: "The UK is not yet fully benefiting from being a
world leader in the field; in effect UK consumers are subsidising Danish and
German wind energy companies.

"This report suggests that policies could do more both to bear down on costs
and support a UK-based industry."

While costs have risen for all types of energy over the past five years, in
offshore wind power the rise has been particularly dramatic, and the sector
is not likely to see meaningful falls before 2015.

The report said offshore wind was still in its infancy, adding that many
developing technologies went through a period where costs rose before they
fell. The report calls for "targeted and direct" support for the supply
chain to develop a UK-based industry, while funding for innovation in
offshore wind technology should be given a priority in research, development
and deployment programmes.

The study also said the government should revise the payments to energy
companies for generating renewable energy from offshore wind so that they
send a long-term signal that support levels would gradually decrease over
time - putting the onus on firms to reduce costs.

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