The UK is more than doubling the funding for a so-called Clean Industry Bonus to support offshore wind projects, just as the world’s biggest offshore wind project developer, Orsted, pulled the plug on a major UK plan due to worsened economics.
The UK government announced on Friday that it is bumping up the budget for the Clean Industry Bonus to $722 million (£544 million) from an initial $265 million (£200 million).
Under the Labour government’s plan to make Britain a clean energy superpower, the UK has introduced the Clean Industry Bonus. This scheme will provide financial rewards for offshore wind developers, on the condition they prioritize investment in regions that need it most or in cleaner supply chains, including traditional oil and gas communities, ex-industrial areas, and ports and coastal towns.
Energy Secretary Ed Miliband is now more than doubling the funding for the scheme after the UK received hundreds of bids, exceeding expectations.
“This additional funding has the potential to help secure billions in private investment in new factories manufacturing components for the offshore wind industry across the UK,” said Ana Musat, Executive Director of Policy at industry association RenewableUK.
“The expansion of the offshore wind supply chain will, in turn, enable us to deliver the massive pipeline of offshore wind projects planned for installation in UK waters at the lowest cost for billpayers in the years ahead.”
The UK’s efforts to boost offshore wind development through government incentives come days after Ørsted said it had decided to discontinue the development of the Hornsea 4 offshore wind project in the UK in its current form, due to rising costs.
“The combination of increased supply chain costs, higher interest rates, and increased execution risk has deteriorated the expected value creation of the project,” said Rasmus Errboe, Group President and CEO of Ørsted.
By Charles Kennedy for Oilprice.com
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