Plans for a major expansion of offshore wind — Hutton 

Equivalent to all UK homes could be powered by offshore wind by 2020

Harnessing the vast potential of the UK’s island status entered a new phase today (Monday 10 December) as Energy Secretary John Hutton announced proposals to open up its seas to up to 33GW (gigawatts) of offshore wind energy. He also announced that he will chair a panel of experts to advise him on renewable energy, underscoring the UK Government’s determination to play its part in meeting the EU target of 20% renewable energy by 2020.

Speaking to the European energy industry in Berlin, Mr Hutton launched a Strategic Environmental Assessment of the seas surrounding the UK, paving the way for a possible ‘third round’ of wind energy development and beyond:

“The draft plan I’m setting out today could allow companies to develop up to 25 gigawatts of offshore wind by 2020, in addition to the 8 gigawatts already planned.

“This potential major expansion will be subject to the outcome of a Strategic Environmental Assessment. But if we could manage to achieve this, by 2020 enough electricity could be generated off our shores to power the equivalent of all of the UK’s homes. This could be a major contribution towards meeting the EU’s target of 20% of energy from renewable sources by 2020.

“The challenge for Government and for industry is to turn this potential – for our energy and economy – into a cost-effective reality. This will be a major challenge.

“The UK has some of the best offshore wind resource in the world, a long history of design, installation and operational expertise in the offshore environment and the skills and manufacturing capability to transfer to this exciting new sector.

“The UK is now the number one location for investment in offshore wind in the world and next year we will overtake Denmark as the country with the most offshore wind capacity. I want to ensure the UK remains one of the best places for renewable business.

“Our trajectory on renewables is beyond question. They are as central to our future low carbon economy as chimneys were to the industrial revolution and road building following the invention of the mass produced car.”

The ‘first round’ of offshore wind farms, in 2001, comprised a number of small demonstration projects. The ‘second round’, in 2003, resulted in the award of options for leases for larger scale projects in three designated areas – the Thames Estuary, the Greater Wash and the North West. Based on current plans under the first and second leasing rounds, about 8GW of capacity could be operational by around 2014. This includes the 1GW London Array which is the largest planned offshore wind farm in the world.

The proposal for a possible ‘third round’, and further regular rounds, of offshore wind development announced today would open up the vast bulk of the UK’s continental shelf to large scale development. It would allow for up to a further 25GW of offshore capacity on top of the planned 8GW. In total this could generate enough power for up to 25 million homes by 2020.

Mr Hutton announced that he will chair an enhanced Renewable Advisory Board with a bigger remit to advise the Government on the EU 2020 renewable energy target, and a wider pool of expertise to help deal with the issues and opportunities across renewable energy.

The Government is also working on a regulatory regime to ensure that all offshore projects can connect to our onshore electricity transmission and distribution networks, quickly, securely and as cheaply as possible. A response to the recent consultation will be published by BERR shortly.

These developments sit alongside plans in the Energy Bill, to be introduced shortly, to ‘band’ the support provided by the Renewables Obligation to give greater support to offshore wind, wave and tidal energy. This will incentivise the expansion envisaged by today’s proposals.

The amount of electricity from renewable sources of all kinds in the UK has doubled to almost 5% since the introduction of the Renewables Obligation in 2002. Current forecasts will see a further tripling to around 15% by 2015. Plans are also under way for a feasibility study into the potential for electricity generation from the Severn Estuary.

At the Spring European Council the EU agreed a target of 20% of all energy from renewables by 2020. This includes fuel for electricity, heat and transport. The Commission is due to propose how that target should be apportioned between Member States in January.

Notes for Editors

1. BERR is conducting a Strategic Environmental Assessment of a Draft Plan to enable further rounds of wind leasing, offshore oil and gas licensing and hydrocarbon gas storage licensing in UK waters.

2. The SEA will assess the objective of achieving up to 25GW of offshore wind generation capacity by 2020, on top of current plans for 8GW of offshore wind. For offshore wind leasing, the SEA will cover the UK territorial waters and adjacent areas where the water depth is around 60m or less but excluding Scottish and Northern Irish territorial waters, where it is understood there is limited scope for development and consequently no overarching plan or programme for offshore windfarms.

3. The SEA is being conducted in accordance with The Environmental Assessment of Plans and Programmes Regulations 2004. For full details of the SEA process see: http://www.offshore-sea.org.uk

4. Under The Crown Estate Act 1961, The Crown Estate is landowner of the UK seabed and areas of foreshore (http://www.thecrownestate.co.uk). The Crown Estate’s permission, in the form of a site option Agreement and Lease, is required for the placement of structures or cables on the seabed, this includes offshore windfarms and their ancillary cables and other marine facilities. During Rounds 1 and 2, successful applicants were awarded an option for a Lease by The Crown Estate. Potential offshore windfarm developers also require statutory consents from a number of Government departments before development can take place. When all necessary statutory consents are obtained by the developer The Crown Estate can grant a site lease for a development.

5. Two previous competitive rounds have been held by the Crown Estate: in 2001, Round 1 provided allocated 14 lease options totalling just over 1 GW. Round 1 was intended to act as a “demonstration” round, enabling prospective developers to gain technological, economic and environmental expertise. Round 1 full term leases are for twenty-two years (plus 1 year for removal and decommissioning).

6. In 2003, following an SEA undertaken by BERR (then the DTI), the Crown Estate held Round 2 for commercial scale offshore wind projects, allocating leases to 15 projects totalling 7.2GW in the three strategic areas considered to have the largest potential for offshore development – the North West, the Greater Wash, and the Thames Estuary. For the largest Round 2 projects, the full term lease is for fifty years including decommissioning.

7. For a map identifying the Round 1 and 2 projects is available see: http://www.thecrownestate.co.uk/round_1_2_windfarm_sites-2.pdf

8. The Crown Estate intends to announce the competitive process and commercial terms for Round 3 offshore wind farm lease options in early 2008.

9. In English and Welsh waters, BERR is responsible for consenting under the Electricity Act 1989. BERR works closely with the Marine and Fisheries Agency, which licenses a number of activities in the marine environment on behalf of the Secretary of State for Environment, Food and Rural Affairs, and in certain areas for Wales for the Welsh Assembly Government. In the Scottish Renewable Energy Zone, Scottish Ministers are responsible for Electricity Act 1989 consent decisions. The Government’s Planning Reform Bill was published in November 2007 and includes proposals for an independent Infrastructure Planning Commission (IPC) and other measures to reform the system for deciding major infrastructure projects.

10. Five Round 1 projects (Scroby Sands, North Hoyle, Kentish Flats, Barrow, and Burbo Bank), as well as the demonstration turbines at Beatrice Oil Platform and Blyth, are now operational, totalling 404MW. A further six Round 1 projects are under construction, collectively almost 583MW. In the last 12 months, BERR has consented a further 2.5GW of offshore wind projects.

11. The Renewables Advisory Board (RAB) provides advice to the Government on a wide range of renewable energy issues. The board is an independent, non-departmental public body sponsored by BERR, that brings together government departments, financial institutions, acedemia, the renewables industry and the unions. It aims to provide the Secretary of State with independent, impartial and authoritative advice on policies, programmes and measures, to improve Government understanding of the obstacles and opportunities for the development and deployment of renewable technologies in the UK, both in the short term and over the next 20 years, and make specific recommendations.

12. See http://www.renewables-advisory-board.org.uk

Client ref 2007/124

GNN ref 155130P

Department for Business, Enterprise and Regulatory Reform (National)

Government News Network

10 December 2007