E.ON: UK's CfD fine for Rampion

The UK’s draft Contract for Difference (CfD) strike prices are more than sufficient for E.ON’s 700MW Rampion project, said a senior executive, whose support for the incoming UK support system flies against criticisms by other developers.

“We think [the draft CfD strike price] is good enough at £155 per MWh – certainly for our Round 3 Rampion project,” said Michael Lewis, managing director for E.ON Climate & Renewables, speaking yesterday at the Recharge Thought Leaders Brunch on the sidelines of EWEA Offshore 2013.

Several other big developers – including RWE and Centrica – have reacted coldly to the UK's draft CfD strike price, suggesting they may not build projects unless support is increased.

Despite the bruising energy debates underway in the UK and Germany, the UK has emerged as the significantly more comforting destination for offshore wind investment, claims Lewis, who says Germany’s energy industry is in “crisis”.

“Much to my surprise”, the UK’s Offshore Transmission Ownership (OFTO) regime “has been a really good innovation”, Lewis said. “It’s working very well, in contrast to the German offshore grid-connection system, which has been a big, big problem.”

Only a few years ago the UK offshore wind sector looked with envy upon Germany's more centrally planned OFTO system.

E.ON is currently building the 288MW Amrumbank West project in the German North Sea and the 219MW Humber Gateway in UK waters, and earlier this year submitted the planning application for Rampion, off the coast of southern England.

Lewis supports moving the CfD system towards something like a competitive tendering process for offshore wind, which appears to be the government's ultimate intention.

Such a system, in place in Denmark, “reveals the price of each project rather than a one-size-fits-all", he says. "We all know there’s a big difference between [Forewind’s 9GW] Dogger Bank and Rampion”.

Germany’s energy industry is in a “crazy situation” at present, Lewis said. The subsidies paid out to renewables are skyrocketing; carbon emissions are increasing as cheap coal from the US outcompetes gas plants in replacing nuclear; and the stability of the electricity grid is fraying.

“All three things we’re trying to achieve with [the Energiewende energy transition] are going in the wrong direction,” added Lewis. “That’s my definition of a crisis.”