Commodities

Labour Weighs Increasing UK Wind Funding for August’s Auction

(Bloomberg)

(Bloomberg) -- UK Prime Minister Keir Starmer’s new government is considering increasing subsidies for offshore wind developers in an upcoming auction, part of a bid to remain on track for ambitious clean energy goals.

“Applications for Allocation Round 6 are currently being assessed and the Secretary of State will then carefully consider whether to increase the budget,” a spokesperson for the Department for Energy Security and Net Zero said in an email.

While funding was already boosted to a record £800 million ($1 billion) earlier this year, it still isn’t enough for the UK to meet its 2030 target, energy think tank Ember said in a report Thursday. The government must take action this month to raise offshore subsidies for its summer auction, known as Allocation Round 6, Ember said.

The country’s current budget would only support about 3 to 5 gigawatts of additional capacity at the upcoming auction, but the UK needs 20 gigawatts across the next two to remain on track for its 2030 goals, according to Ember.

Britain’s new government wants to install even more offshore wind capacity by 2030 than its predecessor, aiming for 55 gigawatts. Ember’s report is based on the current goal of 50 gigawatts, signaling that greater support will be necessary to support the expansion.

Meanwhile, increased costs for offshore wind developers have caused a slowdown in the sector, with the previous UK auction attracting no new capacity. Increasing funding to £1 billion would put targets “in view,” Ember said. The deadline to change the budget is August 1.

“A higher budget for this summer’s auction would immediately secure a real boost to the UK’s offshore industry, a straightforward win for a new government within three weeks of power,” said Ember analyst Frankie Mayo.

Earlier this year, before coming to power, Starmer rolled back a pledge to spend £28 billion a year on the UK’s green transition in a bid to neutralize Conservative attacks over taxes. His Labour party wants to fund many of its plans with a windfall tax on oil and gas companies.

(Updates with comments from UK government from first paragraph.)

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