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Floating Offshore Wind

Volume 722: debated on Tuesday 15 November 2022

14. What fiscal steps he plans to take with Cabinet colleagues to support the development of floating offshore wind. (902259)

21. What fiscal steps the Government is taking to support the development of floating offshore wind. (902267)

We are committed to developing floating offshore wind to support our energy security and net zero ambitions. The contracts for difference scheme has already supported the first-of-its-kind TwinHub project off the coast of Cornwall, which will deliver enough energy to power 45,000 homes. The floating offshore wind demonstration programme provided £31 million in grant funding to support many other new innovative projects.

Floating offshore wind has the potential to transform the economy and jobs market in my Aberavon constituency and across south Wales, but it will only happen if floating offshore wind substructures and other components are manufactured and assembled locally. There are two concerns: first, the Crown Estate is putting in place leasing criteria that seem to be about the highest bidder rather than maximising local value and content, and secondly, there are rumours flying around that the Government may be cancelling the floating offshore wind manufacturing investment scheme, which will be fundamental to facilitating the whole programme. Will the Minister confirm that he will urge Crown Estates to maximise local content in the criteria and that the Government are 100% committed to the FLOWMIS programme?

The hon. Gentleman is a staunch campaigner for his constituency’s ability to take advantage of this exciting new technology, and I pay tribute to him for that. As he knows, the Crown Estate works independently to manage the seabed and has an important role in the deployment of floating offshore wind. Its approach for the 4 GW leasing opportunity in the Celtic sea is focused on ensuring the development of this new technology market in the UK as quickly as possible. But, to be clear—cutting to his point about content—the Crown Estate has announced that for the first time it is reforming the tender process to consider supply chain plans, sending a clear signal to the market that UK content is important.

Many renewable energy projects are limited by a lack of grid capacity. We have more wind farms ready for investment in the coming decade than the rest of the world, but the grid is not ready. For future offshore wind projects, who will be paying for the grid connections?

This issue has certainly captured the imagination in East Anglia, where the hon. Lady may be aware that there are certain proposals to bring forward improvements in the grid, although that is ultimately the responsibility of National Grid. We need to address the grid, but I hope she will agree that the country has already made enormous progress in increasing capacity from offshore wind. She may be aware that in 2011 renewables made up just 9% of our electricity; that figure is now over 40%.

Floating offshore wind is emerging as a major new industry, both globally and for us in the UK, in places such as the Celtic sea. The key question for us is how much of the real economic value of that new industry stays here in the UK. To that end, I encourage my hon. Friend to meet Business, Energy and Industrial Strategy Ministers and the Crown Estate, to ensure that the leasing rounds are properly structured and that the contracts for difference process and other policy tools, such as the FLOWMIS port funding and the freeport policy hopefully coming to south Wales, are all properly aligned to deliver British content.

I repeat the point I made to the hon. Member for Aberavon (Stephen Kinnock) about content. I hope that addresses some of my right hon. Friend’s concerns, but I am more than happy to meet him first and then feed back to other Ministers and see what more we can do. He is absolutely right that this is an extraordinarily positive opportunity and, if we seize it, it will deliver for parts of our country such as his constituency.

The BP Mona wind farm, 20 miles off the coast of Anglesey, will generate 1.5 GW of electricity and provide more than 1,500 construction jobs and £3.5 billion of investment in an area desperately in need of good-quality jobs. Will the Minister urge his colleagues in the Senedd to invest in the Holyhead breakwater so that BP Mona can move the project forward, and will he confirm that investment in Holyhead port is the responsibility of the Welsh Government, not the UK Government?

I cannot think of a colleague who champions energy investment in their constituency quite as much as my hon. Friend. I can confirm that the port of Holyhead is a very important part of the wider transport and economic infrastructure of the UK. I know that the Minister for Aviation, Maritime and Security has written to her and specified quite clearly whose responsibility that is, and she is absolutely correct.

The Government allow offshore wind but are still banning onshore wind. Ending the ban would give us a vital tool to reach net zero, make Britain a clean energy superpower, and open up new investment and growth opportunities. Keeping the onshore wind ban will make energy bills £16 billion higher between now and 2030. Why on earth are Ministers undermining green growth and cheaper energy by maintaining the self-defeating ban on onshore wind?

The Government are committed to delivering cheaper, cleaner and more secure power. That is why we included onshore wind in the latest auction round for contracts for difference, which have delivered a 50% technology cost reduction since 2015. The Government recognise the range of community views on onshore wind, and it is important that we strike the right balance between community interests and securing a clean, green energy system for the future. That is why we have committed to consulting on developing local partnerships for supportive communities in England who wish to host new onshore wind infrastructure.