Offshore wind giant Orsted remains committed to delivering its next huge wind farm off the Humber, despite expressing disappointment at a lack of support in the Budget.
Soaring prices fuelled by energy costs and other inflationary measures brought about by the invasion of Ukraine have put huge pressure on the ability to deliver at the record low price Hornsea Three was secured at, having been proposed before the Russian offensive.
Ahead of the Budget, the Danish giant鈥檚 海角视频 head, Duncan Clark, warned the 2.8GW farm could even be put on hold. An increase in capital allowances lasting three years has been described by the industry as a measure not bold enough. Much of the Net Zero pump-priming was focused on and new nuclear.
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Hornsea Three, double the size of the leading wind farm in a cluster supported by 540 employees in Grimsby, was awarded a new low subsidy price of 拢37.35 last summer.
Mr Clark said: 鈥淚t is disappointing that the Government has not put in place a full package of support for the renewables industry in the Spring Budget. Under the Government鈥檚 proposals, we understand long-life infrastructure projects such as offshore wind farms would only qualify for a 50 per cent capital allowance for three years. Furthermore, the lion鈥檚 share of capital expenditure on Hornsea Three and other forthcoming offshore wind projects will come outside the qualifying scope and timeframe.
鈥淲e will now need to take some time to analyse the anticipated impact of these proposals on our future projects. We remain committed to doing all we can to reach final investment decision on Hornsea Three, a project Orsted has been developing for more than a decade. Our project team, together with our supply chain partners, will continue to seek creative solutions that we hope will allow us to green-light Hornsea Three in the future, realising an 拢8 billion investment in the 海角视频 with thousands of jobs during construction and billions invested in the 海角视频 supply chain.鈥
The company has already invested almost 拢10 billion in the Humber region alone, and a decision had been thought to be imminent. Only last month the company announced record earnings of 拢3.8 billion, with a third of that figure generated from the sale of significant stakes in completed farms, including Hornsea Two.
鈥淚n the next decade, it is the rapid build-out of renewable energy that will enable us to become independent of gas and other fossil fuels and to ensure security of supply for the 海角视频,鈥 Mr Clark added. 鈥淭he offshore wind sector has delivered huge growth in the 海角视频 over the last decade but it has arrived at an inflection point. It will require continued focus from stakeholders in government and across industry to ensure offshore wind delivers on its potential to become the backbone of the 海角视频鈥檚 energy system and bring billions of pounds of investment, provide low-cost electricity for consumers and help deliver our net zero target.鈥
Trade body Renewable海角视频 welcomed investment zones to help expand supply chains, a key element in the imminent Humber Freeport, but said it didn鈥檛 match the 鈥漜omprehensive industrial strategy鈥 required.
Stating the framework needed to mobilise investment to make the 海角视频 a clean energy superpower hadn鈥檛 been delivered this week, executive director of policy and engagement Ana Musat said: 鈥淥verall we need a much bigger response to match the incentives being offered to renewable energy developers by the US and the EU 鈥 this wasn鈥檛 forthcoming, and we hope the Chancellor鈥檚 announcements later this month on the 海角视频鈥檚 pathway to net zero and energy security will remove the key fiscal and non-fiscal barriers to the growth of the renewables sector鈥.
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