£1bn energy bill blow as wind farms sale falls f lat
HOUSEHOLDS face missing out on £1billion in energy savings after the Government failed to secure new offshore wind farms.
In a blow to net zero plans, no firms won contracts to build turbines at sea in a yearly auction of renewables contracts.
The debacle was blamed on ministers setting too low a price for the amount companies can charge for electricity, despite the industry warning its costs for raw materials had soared.
However, a government source said: ‘We set the caps on auctions to ensure value for bill payers as the contracts awarded in these auctions are funded out of consumer energy bills.’
Keith Anderson, chief executive of ScottishPower, said: ‘This is a multi-billion-pound lost opportunity to deliver low-cost energy for consumers and a wake-up call for the Government.
‘ScottishPower [builds] wind farms and our track record is second to none in getting projects over the line when others haven’t been able to. But the economics simply did not stand up this time around.’ Sam Richards, former climate adviser under Boris Johnson and now chief executive of campaign group Britain Remade, said: ‘The failure to award a single contract for offshore wind is the result of the Government’s incompetence in the rules they set for the latest auction. This catastrophic outcome will cost hard-pressed billpayers £1billion a year.’
He said that since the system was introduced in 2014, the industry had driven down the cost of building offshore wind farms.
But this year it felt prices had to rise as the cost of materials needed for turbines, including steel, aluminium and copper, had risen due to shortages triggered by Russia’s invasion of Ukraine.
He accused officials of ignoring these warnings and setting a maximum price for offshore wind electricity of just £44 per megawatt hour. ‘This will condemn consumers to higher bills and means Britain loses out on jobs and billions in investment,’ Mr Richards added.
The lack of new offshore wind contracts will be unwelcome Energy Secretary Claire Coutinho. However, the Government highlighted that the latest auction round had secured a record number of clean energy projects – 95, up from 93 last time.
ALMOST everyone piling into the Government over its failure to find anyone to construct its planned new offshore wind farms has one thing in common – they don’t have to account for taxpayers’ money.
It is said the price guaranteed to potential developers for the energy they would provide was set too low. If so, ministers must try again to come up with a mutually acceptable figure.
But a cautious approach is surely better than flinging public money at the problem. As Labour’s disastrous Private Finance Initiatives proved, bad spending decisions can reverberate down the years – leaving future generations to pick up the tab.