Modelling from Cornwall Insight, included in its quarterly GB Benchmark Power Curve report, forecasts offshore wind capacity will increase from 12.5 GW in 2023-24 to 47.1 GW in 2030, narrowly missing the government’s 2030 goal.
The report found that delays in offshore wind deployment in the short to medium term contributed to the missed target. These delays are largely attributed to rising costs, most recently reflected in the 5th Contract for Difference (CfD) auction round, which saw no offshore wind taking part, as well as the cancellation of one of the UK's largest offshore wind farms Norfolk Boreas, with the developers saying it no longer made financial sense.
The slower progress will raise carbon emissions, cutting the chance of meeting carbon targets and ultimately extending the time it takes to reach net zero.
Despite the concerns, offshore wind is forecast to become the largest source of electricity in capacity terms by 2028, making up 26 percent of the UK’s generation capacity by the end of the decade.
Alongside electricity generation mix, the report analyses power prices and has projected power prices will linger at least 60 percent above pre-2021 averages until 2030 and likely beyond. The modelling from Cornwall Insight’s third 2023 Benchmark Power Curve, shows little movement from earlier in the year, with prices expected to peak at nearly £130 per MWh in 2024, before falling to a low of just over £80 per MWh by 2030. While this does mark a large decrease, it remains substantially higher than the pre-energy crisis levels of less than £50 per MWh.
“Offshore wind delays, spurred on by cost worries and project setbacks, pose a roadblock to reaching net zero” said Tom Edwards, Senior Modeller at Cornwall Insight. “We can see the country is travelling in the right direction towards a renewables-based electricity system, however, our estimates continue to show it is simply not fast enough to deliver on government targets. Time is of the essence, and it is critical that the government reassess its commitment to accelerating renewable energy adoption, which includes being more flexible when setting auction parameters to reach the UK's offshore wind goals. Rolling back our net-zero ambitions and slowing our transition away from fossil fuels is likely to be a costly delay that will not only see us fall further behind in decarbonising the country but will leave consumers shouldering the prolonged burden of high prices. Without a resolute commitment to a greener and more sustainable future, achieving net zero emissions and pre-crisis energy bills becomes an increasingly elusive goal.”
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