A new report from Cornwall Insight has cast doubts on the UK government's ability to achieve its ambitious target of reaching 50 gigawatts (GW) of offshore wind capacity by 2030. The report, featured in Cornwall Insight's quarterly GB Benchmark Power Curve report, predicts that offshore wind capacity will increase from 12.5 GW in 2023-24 to 47.1 GW by 2030, falling short of the government's 2030 objective.
This shortfall is primarily attributed to delays in the deployment of offshore wind projects in the short to medium term. These delays have been driven by rising costs, as evidenced by the 5th Contract for Difference (CfD) auction round, where no offshore wind projects participated. Furthermore, the cancellation of the Norfolk Boreas offshore wind farm, one of the UK's largest, due to financial concerns, has added to the challenges.
The slower progress in offshore wind development may have several implications, including an increase in carbon emissions, which could hinder the achievement of carbon reduction targets and extend the timeline for reaching net-zero emissions.
Despite these concerns, the report indicates that offshore wind is still expected to become the largest source of electricity capacity in the UK by 2028, accounting for 26 percent of the country's generation capacity by the end of the decade.
In addition to analyzing the electricity generation mix, the report examines power prices. It projects that power prices will remain at least 60 percent higher than pre-2021 averages until 2030 and potentially beyond. According to the modeling in Cornwall Insight's third 2023 Benchmark Power Curve, prices are expected to peak at nearly £130 per megawatt-hour (MWh) in 2024 before gradually decreasing to just over £80 per MWh by 2030. While this represents a significant decrease, it remains substantially higher than the pre-energy crisis levels of less than £50 per MWh.
Tom Edwards, Senior Modeller at Cornwall Insight, expressed concerns about the delays in offshore wind projects, which are driven by cost worries and project setbacks. He emphasized the need for the government to reevaluate its commitment to accelerating renewable energy adoption and urged flexibility in setting auction parameters to meet offshore wind targets. He warned that rolling back net-zero ambitions and slowing the transition away from fossil fuels could result in costly delays, hindering decarbonization efforts and burdening consumers with higher prices. Edwards emphasized the importance of a resolute commitment to a greener and more sustainable future to achieve net-zero emissions and pre-crisis energy cost levels.