SSE Renewables is advocating for the increased utilization of non-price criteria (NPC) in offshore wind energy auctions across Europe and worldwide. The company contends that incorporating NPC into auctions for new offshore wind projects can bolster a sustainable renewable energy sector that delivers enduring societal value.
To contribute to the ongoing discourse, SSE Renewables has released a concise position paper on the adoption of NPC. The paper distinguishes between the types of criteria best suited for mature and emerging offshore wind markets, as well as those pertinent to seabed auctions and Contracts for Difference (CfD).
The developer asserts that NPC must be meticulously designed and implemented, accompanied by transparent assessment and monitoring of commitments to prevent undue complexity and the potential for legal disputes.
SSE further suggests that seabed leasing auctions for offshore wind projects are ideally suited for the inclusion of NPC, as they are conducted early enough in the development process to ensure commitment fulfillment. This approach avoids relying solely on financial bidding, which could exacerbate the cost of offshore wind.
According to the report, the most relevant NPC include the track record and deliverability of projects. Additionally, criteria related to sustainability (such as circularity, workforce and skills), ecological protection and enhancement, and supply chain development should be prioritized.
SSE Renewables boasts extensive experience with NPC, having participated in auctions including ScotWind, the recent Polish offshore license tender, and the Hollandse Kust West tenders in the Netherlands.
Expressing her views on the matter, Alexandra Malone, Director of Corporate Affairs at SSE Renewables, stated, “While the attractiveness of auctioning based on the lowest price lies in the belief that it will lead to reduced costs in the short term, it does not always reward the best site, project, or developer. Consequently, long-term societal benefits, such as achieving industrial strategies, enhancing the environment, and fostering innovation, may be overlooked.”
Malone added, “That's why we advocate for a greater emphasis on non-price criteria in offshore wind auctions. If properly designed and implemented, they can facilitate the realization of long-term societal advantages by recognizing projects and developers on a broader basis than simply those capable of offering the lowest price or the highest bid in the case of seabed auctions or negative bidding.”
With the release of the position paper, SSE Renewables intends to engage in constructive discussions on this topic at the national, European, and global levels. The company plans to collaborate with organizations like Wind Europe, GWEC, and the Global Offshore Wind Alliance, as well as directly engage with governments and regulators.
