The newly appointed PM, Keir Starmer and Secretary of State for Energy Security and Net Zero, Ed Milliband, have made several commitments within planning, the grid, supply chains and job development. What does the new Government mean now for offshore wind?

Increasing the capacity targets for offshore wind

Labour intends to increase the 2030 offshore wind target from 50GW to 55 GW and 5 GW of floating offshore wind. Currently, 53.9 GW has applied for consent, with an additional 10.8 GW forecast this year, the last chance to secure consent before Allocation Round (AR) 8. Allocation Rounds allow 50% of available capacity through, assuming all projects apply for consent, which would give the UK over 50 GW of capacity by AR8. There are suggestions that Labour plans to increase the capacity awarded through allocation rounds.

Accelerate the planning process

With 1.5 million properties forecast for construction, the planning inspectorate could experience a shortage of resources, delaying other infrastructure developments, like offshore wind. Labour intends to create new consenting targets and a decision-time monitoring framework, reducing waiting time for projects. The new government has emphasised their commitment to adapting the planning system and recognising the existing challenges, including that planning applications only allow for negative comments.

Labour aims to strengthen community engagement by enabling people to benefit from cheaper bills and other incentives. Community benefits could provide a more effective consenting process, ensuring authorities spend less time focusing on consultation complaints.

Upgrading grid infrastructure

Labour aims to work with the FSO, the future owner of the UK grid network. Within this partnership, Labour would tend any grid upgrades and create a new publicly owned company, GB Energy, to bid in the tenders. GB Energy would invest over £8 billion in the next five years in renewable energy projects and the grid. There are still discussions over GB Energy and its approach to state investment. In Nordic regions, the state often takes a share in energy projects. In the UK, the Government created the Green Investment Bank (GIB) in 2012, which invested over 3 billion in green energy projects.

There is no shortage of private investment available today, with RWE spending over 1 billion to acquire three projects in the UK. The government plan could follow a similar path to Nordic nations, returning any offshore wind profits to the treasury. Alternatively, if the plan is more focused on attracting investors, results could vary.

Renewable energy is very flexible, in terms of generation, so the grid must be designed to meet this variation. The new government would explore opportunities for smart demand management and targeted renewable construction in locations with power imbalances. A new proposal in the consultation, the Review of Electricity Market Arrangements (REMA), will see the UK introduce a regional pricing system, pricing electricity at different levels. This would mean that the region consisting of the North of Scotland has lower electricity prices due to the significant generation potential, impacting the possible returns of offshore wind.

Supply Chain

Labour plans to create a National Wealth Fund, which will invest nearly £2 billion in enhancing ports across the nation, focusing on enabling floating wind projects. The fund will also invest £2.5 billion in the green steel industry. In the AR7, developers must invest in UK manufacturing and decarbonisation to qualify. Developers who provide the best solutions and most cost-effective options will secure support from the Government.

Supporting new job development

The Government will end more oil and gas licences, with 180 fields expected to be finished during the next ten years. Many professionals with considerable offshore experience will be exploring the job market. To maintain these professionals and recruit additional people into the industry, Labour intends to invest £500 million each year. Businesses that provide good pay and conditions, coastal regions, energy communities and industrial hubs could receive funding from this investment plan.

The planning, construction and maintenance of the next generation will require prioritising new jobs. The shift of oil and gas jobs could provide an added boost to the industry and creating well-paid opportunities will attract others from outside the sector.

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