It’s been quite a week for UK offshore wind as the world’s largest market awarded its latest leases for new development – and sparked an almighty row.
Oil supermajors Total and BP, and German power giant RWE were prominent among the winners as seabed landlord The Crown Estate handed out 8GW of potential development zones off England and Wales via its Round 4 auction.
The projects built in the new lease areas will be crucial to helping Britain hit its 40GW deployment target for 2030, but what should have been cause for celebration was overshadowed by complaints that the controversial ‘option fee’ system adopted for the auction had driven up costs for developers, with sector leader Orsted and lobbying group WindEurope and RenewableUK vocalin their criticism.
For its part, BP was delighted with the new lease area it secured after bidding the most of any participant in the auction along with new partner EnBW. BP clean energy chief Dev Sanyal told Recharge the site was all about “location, location, location”.
Even as the contentions simmered, there was a knock-on effect to the eagerly awaited ScotWind leasing, which was delayed as officials there studied the impact of the wider UK Round 4, which was said to have “changed the market overnight”.
As if Round 4 wasn’t excitement enough, Vestas came storming back to the offshore wind turbine big-league midweek when it unveiled its 15MW machine that will allow it to go toe-to-toe with the likes of Siemens Gamesa and GE Renewable Energy.
In an exclusive interview with Recharge, technology chief Anders Nielsen said Vestas has what is needed to “run the race” with its rivalswith a turbine that can power 20,000 homes from a single machine.
On the commercial side, chief financial officer Marika Fredriksson told Recharge she expects the 15MW turbine to drive up activity and profitability after 2025, as the Danish group takes a firm grip on the offshore business following its full acquisition of the former MHI Vestas joint venture.
The scale of the prize was underlined by latest figures from sector lobbying group WorldForum Offshore Wind, which reported record capacity additions last year. WFO managing director Gunnar Herzig told Recharge the rise of China’s offshore wind sector could see its OEMs taking the fight their western rivals around the world.
The specific potential of floating wind off the US, meanwhile, came into sharp focus as Recharge reported estimates it could account for 25% of all capacity off America’s shores.
We heard plenty about renewable energy – and very little about oil – from two of Europe’s fossil giants as they posted financial results during the week.
Fresh from its success in UK Round 4, France’s Total was in upbeat mood over its green power position after a year of piling on the gigawatts – it now has its 35GW 2025 goal covered – and is even planning to change its name to show, in the words of CEO Patrick Pouyanne, that it is “more than serious” about the energy transition.
There was no less ambition but a very different approach at Shell, which raised its emissions reduction goals and explained that it won’t be going down the same gigawatt-heavy road as BP and Total, vowing to steer clear of the “commodity clean energy game” and focus on selling, not generating, green power.
Whether the fossil sector as a whole is changing fast enough remains seriously open to question. A report this week highlighted how national oil companies are gearing up to spend $400bn on projects that would effectively rule the world out from hitting the Paris climate goals.