The UK government has increased the scope for investment in offshore wind projects, creating scope to provide renewable energy to millions of homes annually.
Changes in the Contracts for Difference (CfD) renewables programme come after no offshore wind projects were put forward in the last CfD round.
That followed arguments that price levels set by government were uneconomical for investment.
But following a review – which included the impact of rising supply chain costs – the government has raised the maximum price for offshore wind by 66 per cent. The changes will take effect in the next CfD round next year.
Industry body RenewableUK has now suggested there is potential for government to unlock a record level of investment in offshore wind projects in 2024.
It says at least 10 projects are likely to be eligible, potentially representing enough energy to power 8.5 million homes each year.
However, fresh concerns have been raised about “competing needs” of seabed operators, with renewed calls being made to ensure the interests of the fishing sector are not pushed to one side.
Isles MP Alistair Carmichael has welcomed the news.
“As with so many green issues with this government, it has been two steps forward and one step back on the Contracts for Difference.
“Even so, this belated recognition of what was needed to secure offshore wind development is welcome.
“This new strike price should rebuild confidence in renewable investment, which was undermined by the Tories’ bungled approach to the last auction.Alistair Carmichael
“Even accounting for the SNP-Green government’s habit of exaggerating our offshore energy potential, there are huge opportunities in the expansion of renewables for the isles.
“These developments reinforce the case for a decentralised grid – so that areas which generate renewable energy can properly benefit from it.”
He added: “What is still needed from both the UK and Scottish governments is a strategy for how we manage the competing needs across our increasingly-crowded seabed.
“Every boost to investment makes that big picture plan more urgent – so that fishing, energy and other uses are balanced, without one pushing out the other.”