Britain’s offshore wind industry suffered a blow after ministers failed to heed warnings from some of the world’s biggest renewable energy developers that the annual auction was set too low to reflect their soaring costs. No energy companies submitted bids for offshore wind projects, the government confirmed on Friday morning.
The three biggest offshore wind developers in the UK – SSE, ScottishPower and the Swedish company Vattenfall – were forced to sit out the bidding after ministers refused to increase the maximum price for the auction despite a 40% increase in the cost of manufacturing and installing turbines because of inflation.
Who’d guess a race for renewables would cause the prices to skyrocket? Supply and demand is just too new for us to understand it to such depths.
The problem in this case is that there are only two large offshore wind markets, that being Europe and China. Both are relativly separate and the UK has dominated the European market for years, as the other North Sea bordering countries have not auctioned of large areas. That has changed due to the energy war in Europe. So now the UK has to actually compete for skilled workers, spezialiced ships and so forth.
However it will be solved as more demand means more investment and that logically means prices will fall.
It’s not an issue specific to renewables it is an issue with the broader economy.
Or have you been living under a rock?