Blow for green energy plans as no firms bid for offshore wind contracts
The government’s green energy plans have been dealt a blow after firms snubbed an auction for contracts to run new offshore wind sites, sparking warnings of higher household bills.
There were successful bids for onshore wind, solar, tidal and geothermal projects to supply the grid with electricity.
However, there were none for offshore turbines, which provide the backbone of the UK’s renewables system.
Insiders had warned the process had struggled to attract bidders because the government has set the maximum price generators can receive as too low, failing to reflect the rising costs of manufacturing and installing turbines.
The industry has been hit by inflation that has seen the price of steel rise by 40%, supply chain pressures and increases in the cost of financing.
This year offshore wind producers were allowed a maximum bid of £44 per megawatt hour (MWh) of electricity, compared to £155 per MWh in 2015, based on adjusted figures.
The outcome of the auction is a setback to ministers’ pledge to deliver 50 gigawatts (GW) of offshore wind by 2030, from 14 GW currently.
Energy and climate change minister Graham Stuart said: “We are delighted that our first annual contracts for difference auction has seen a record number of successful projects across solar, onshore wind, tidal power and, for the first time, geo-thermal.
“Offshore wind is central to our ambitions to decarbonise our electricity supply and our ambition to build 50GW of offshore wind capacity by 2030, including up to 5GW of floating wind, remains firm.
“The UK installed 300 new turbines last year and we will work with industry to make sure we retain our global leadership in this vital technology.”
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‘Prices have been set too low for the sums to add up’
With offshore wind turbines now producing electricity much cheaper than gas power plants, experts have warned the failure to expand the sector threatens higher bills, undermines the country’s energy security and risks the UK’s position as a world leader in the industry.
Keith Anderson, the chief executive of ScottishPower, which is one of the key builders of wind power in the UK, said: “This is a multi-billion pound lost opportunity to deliver low-cost energy for consumers and a wake-up call for government.
“ScottishPower is in the business of building wind farms and our track record is second-to-none in terms of getting projects over the line when others haven’t been able to. But the economics simply did not stand up this time around.”
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Labour’s Ed Miliband branded the outcome of the auction an “energy security disaster” that would push up household bills.
The shadow energy security secretary said: “The Conservatives have now trashed the industry that was meant to be the crown jewels of the British energy system, blocking the cheap, clean, homegrown power we need.
“Ministers were warned time and again that this would happen, but they did not listen.
“They simply don’t understand how to deliver the green sprint, and Rishi Sunak’s government is too weak and divided to deliver the clean power Britain needs.”
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“Who wants to open their curtains to a wind turbine?”
Sue Ferns of the Propsect union said: “Businesses and workers stand ready to deliver a rapid rollout of renewables but the government’s failure to set sustainable prices is holding the industry back.”
Greenpeace UK’s policy director, Doug Parr, said: “This monumental failure is the biggest disaster for clean energy in almost a decade.
“Thanks to cost pressures and inept government policy, this auction round has completely flopped – denying bill payers access to cheap, clean energy and putting the UK’s legally binding target of decarbonising power by 2035 in greater jeopardy.”
Luke Murphy of the IPPR think tank said “This was an avoidable yet deeply harmful failure of government policy and planning.
“The UK will miss out on billions in green investment, cheaper energy bills, and lower emissions as a result, and cement the idea that the UK has somersaulted from a clean energy leader to laggard.”
Baroness Michelle Mone has broadened her attack on her political critics, accusing Conservative leader Kemi Badenoch of using “inflammatory” and “reckless” language that could prejudice a police investigation into her role in the awarding of PPE contracts.
A day after she wrote to Sir Keir Starmer, accusing the government of pursuing a vendetta against her, the former Conservative peer responded to comments by Ms Badenoch following a High Court ruling that a company linked to Baroness Mone’s husband must repay £122m received for surgical gowns.
The court found that PPE Medpro, founded by her husband Doug Barrowman, was in breach of contract with the Department of Health and gave it two weeks to repay the sum.
While not a director of the company, Baroness Mone used her political contacts to introduce PPE Medpro to the government’s “VIP fast-lane” at the start of the pandemic, and a family trust of which her children are beneficiaries received £29m of the profits.
A separate criminal investigation by the National Crime Agency (NCA) is ongoing, and assets linked to the couple worth £75m have been frozen while it continues.
In a series of radio interviews, Ms Badenoch criticised Baroness Mone, accusing her of bringing shame on the Conservative Party and calling for her to step down from the House of Lords.
“Where people do wrong, they should be punished,” she said. “They should face the full force of the law and this is something that I very strongly believe in,” she said.
“And as the prosecution against her continues, they should throw the book at her for every single bit of wrongdoing that has taken place.”
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Baroness Mone ‘should resign’
In a letter from her private office, Baroness Mone accuses the Tory leader of being ignorant of the facts and calls out a series of other Conservative politicians who introduced companies to the VIP lane.
“I was shocked to the core to read about your inflammatory language on BBC Radio yesterday calling for me to resign from the House of Lords,” she writes.
“You are commenting on a live criminal investigation that could prejudice the outcome of any trial, and in so doing, you are reportable to the attorney general for breach of and contempt of court. Does no one ever tell you these things before you and your colleagues make reckless statements in the public domain?”
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Baroness Mone goes on to say the NCA investigation has “nothing to do with PPE Medpro and the contracts”.
“The case theory of the NCA investigation is that I somehow misled the Conservative government about my alleged concealed involvement and ended up pocketing a lot of money,” she writes. “Well I’m sorry to disappoint you, but it isn’t true.”
She also says the Conservative government knew of her involvement and names former health secretary Matt Hancock, Lord Agnew, Lord Feldman and Lord Chadlington as being among 51 “mostly Conservative peers and MPs” who introduced providers to the VIP lane.
“So Kemi, my role was exactly the same as all other Conservative MPs and peers who were trying to help provide PPE… if I have done wrong, then so have all the others in the VIP lane. In which case, you should be calling out for them to resign as well. That’s if you manage to work out what it is they are supposed to have done wrong.”
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The High Court says a company linked to Mone breached a government contract of nearly £122m
She concludes by saying she has no wish to rejoin the Lords as a Conservative peer when her leave of absence ends, “that’s assuming there still is a Conservative Party before the next General Election”.
The letter comes as an online petition calling for Baroness Mone to step down from the Lords, launched by the Covid-19 Bereaved Families for Justice, attracted 60,000 signatures in 24 hours.
The Conservative Party has been approached for comment.
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