Blow for Sunak’s green energy plans as not a single offshore wind project commissioned

Not a single offshore wind farm has been commissioned in a key auction, dealing a blow to Rishi Sunak’s promise to decarbonise the UK’s electricity production.

In the annual auction, which lets companies bid to supply the grid with electricity, many onshore wind projects and solar farms bid to get a contract. However, the government announced that no offshore wind contracts – seen as the backbone of the UK’s green electricity ambitions – were included this year.

Environmentalists called it a “complete flop” and a “monumental failure”, arguing that it left the UK more reliant on fossil fuels.

One industry source said: “There is no offshore wind and that’s the backbone of our transition to clean energy and attempts to stop using gas, which must be a worry for government.”

Greenpeace UK’s policy director, Doug Parr, said: “This monumental failure is the biggest disaster for clean energy in almost a decade.”

Labour’s shadow secretary for energy security and net zero, Ed Miliband, tweeted: “Ministers were warned time and time again that this would happen, but they did not listen.

“The Conservatives simply don’t understand how to deliver the green sprint, and Rishi Sunak’s government is too weak to deliver the clean power Britain needs.”

Wind farm builders had warned for months that the government, which sets a maximum price that companies are allowed to charge, was not taking into account how much their costs had soared during the cost of living crisis, which has also pushed up prices for businesses.

“The economics simply did not stand up,” the boss of Scottish Power said on Friday after the result.

Energy and climate change minister Graham Stuart insisted that offshore wind remains “central to our ambitions to decarbonise our electricity supply”. He added: “The UK installed 300 new turbines last year, and we will work with industry to make sure we retain our global leadership in this vital technology.”

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The failure puts a major dent in the government’s promise to deliver 50 gigawatts (GW) of offshore wind by 2030, compared with 14 GW today.

Ministers pointed to the fact that a record number of projects involving renewable energy were awarded funding in the auction. A total of 95 clean-energy projects – including solar power and onshore wind – were successful in the £227m round, up from 93 in the previous round.

The UK has for years been a world leader in offshore wind, and is second only to China in the amount of power its turbines can produce.

It has been a major British success story and helped customers save hundreds of millions of pounds during the recent energy crisis.

Producing offshore wind used to be expensive, but after years of innovation and building up scale, the price of supplying wind power to British homes has dropped dramatically.

New offshore wind turbines now produce electricity at a considerably cheaper rate than gas power plants. The price of gas has soared since Russia began its full-scale invasion of Ukraine.

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Keith Anderson, the boss of Scottish Power, said that offshore wind is still one of the cheapest ways to generate electricity. He called on the government to make incentives stronger for next year’s auction.

“This is a multibillion-pound lost opportunity to deliver low-cost energy for consumers, and a wake-up call for government,” he said. “Scottish Power is in the business of building wind farms ... But the economics simply did not stand up this time around.”

Emma Pinchbeck, the chief executive of trade body Energy UK, said the US and the EU have put in place big incentives to attract green energy, thereby taking some of the investment that would otherwise come to the UK.

“You can’t do energy policy on wishful thinking about the way the world is; you have to deal with the world as it is,” she said. “If we want to stay world-class, our policy needs to reflect those realities.”

Dan McGrail, the boss of trade body RenewableUK, said Friday’s results are a major blow for consumers. “Industry has warned that rising costs should have been properly priced into this auction,” he said.

“These results should set alarm bells ringing in government, as the UK’s energy security and net zero goals can only be met if we have offshore wind as the backbone of our future energy system.”

Mr Parr, of Greenpeace, said that the auction round had “completely flopped” – leaving the UK “more dependent on expensive, imported fossil gas”.

He said the government was “denying bill-payers access to cheap, clean energy, and putting the UK’s legally binding target of decarbonising power by 2035 in greater jeopardy”.