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Offshore Wind

Volume 592: debated on Thursday 5 February 2015

The UK has the most fully installed, operational offshore wind capacity in the world and is consistently rated the No. 1 market for investment attractiveness. The Government are supporting significant levels of offshore wind deployment which will deliver the volume necessary to help achieve cost reduction and give the supply chain the confidence to invest. The competitive contracts for difference process will also reduce cost to ensure greater scale of delivery.

Last year, despite assurances from the then First Minister of Scotland, Alex Salmond, that there would be an offshore wind development in Dundee that would have brought 700 jobs to the city, SSE withdrew the plans. Does the Minister agree that Scotland cannot rely entirely on gas and oil for its economy and cannot rely on the separatists to bring renewables to Scotland?

I agree that renewables are part of the energy mix and must be stimulated and grown in conjunction with existing energy supplies. The Scottish Government already have the responsibility for consenting to and licensing offshore wind. When the Smith commission proposals are implemented, the Scottish Government will also assume the Crown Estate’s existing role as landlord. That will give them the ability to offer more areas in Scottish waters for offshore renewable development should they wish to do so. I suggest he continues to take the issue up with the Scottish Government.

In a recent written answer the Minister told me that

“it is a priority for Government to support the development of a UK-based supply chain for offshore wind and to increase the UK content of wind farms ”,

but that she does not require developers to report on UK content. Companies in the north-east, such as Deep Ocean in Darlington, that have already invested over £400 million in production and installation facilities want to know why her Department is not being more proactive in ensuring UK companies benefit fully from this taxpayer-subsidised activity.

My hon. Friend has raised a specific question. My broad answer is that we need a supply chain plan in place. If he would be kind enough to write to me specifically about that matter, I will take a particular interest in it.

Notwithstanding what the Minister says about the licensing of offshore, the fact is that the financing of it is through the contracts for difference. Given that there is a four to five-year horizon between being granted a CfD and the commissioning of the first turbines, offshore developers have expressed concern over the levy control framework and, in particular, what they perceive as a budgetary cliff in 2020, with no indication of what comes thereafter. Is the Minister intending to meet developers to give them any confidence that there will be continued CfDs available after 2020?

There is more visibility about funding offshore wind in this country than anywhere in the world. We are keen to continue that, so that we are No. 1 for offshore wind. I will continue to make everyone aware of our plans. For 2020, we certainly hope that we will be in a position to do that. As the hon. Gentleman is aware, the current CfD winners will be informed on 26 February. We will all be interested in the outcome.

May I press the Minister a little further on the steps that the Government will take to ensure that there is significant local content in the materials used to build these wind turbines?

To get a CfD one has to have a supply chain plan in place, so we hope that that will reinforce the need to have local support and an effective local supply chain.