Recently, the government announced that offshore technology was going to be favoured over its onshore alternative, after it announced there would not be strike price cuts before 2019, as previously feared.
UK may still struggle to attract investment
In spite of this increased support for wind farms, the report from Bloomberg New Energy Finance said that the UK will still struggle to attract any sort of significant investment until certain major issues are addressed.
It accepts that the support announced could see investors in offshore wind technology bring in significant investments, however, there are still a number of risks which may put them off.
“The government is anxious to convince investors and banks that it has built a cost-effective incentive system to drive the construction of offshore wind projects in the next few years, enabling the UK to maintain its position as the world’s leading market for this technology,” said Sophia von Waldow, offshore wind analyst for Bloomberg New Energy Finance.
According to the report, the biggest worries that companies will face if they consider investing money in this technology will be a combination of construction risks, policy risks, and credit risks, as well as concerns that the amount of energy output from offshore windfarms has been overestimated and would not deliver on promises.
Concerns ‘are being addressed’
These worries have been countered by RenewableUK, which said the concerns investors have brought to the fore are already being dealt with by the government.
“We feel that BNEF have been too pessimistic in their assessment of the risks involved in the CfD (Contract for Difference), though it is fair to say that the risk ‘package’ that the CfD represents is not well understood yet. With the changes to the strike prices and the CfD terms, we think that the offshore wind industry is capable of exceeding the 10GW which BNEF cited for 2020,” said Dr Gordon Edge from RenewableUK.