The headline of this new blog post applies to both homes and businesses in the UK: electricity usage set to rise by 50% by 2034.
This may (or may not) surprise you, given the arguably parlous state of the UK economy and the increasing efforts of homeowners and businesses to reduce energy usage. But it’s based on statistics from last week’s renewable energy conference held in Glasgow from “All Energy“.
The better news is that the UK has ambitious goals for offshore wind growth: the current operational capacity stands at 15GW, it is striving to be able to produce 50 Gigawatts (GW) by 2030, just 6 years hence.
The conference event held by All Energy is now in its 23rd year and remains a crucial focus point for the renewables sector. Among the many discussion points this year were:
- Battery storage
- Grid challenges
- Making projects attractive to investors
Also at the forefront of many thoughts was the latest round of contracts for differences (CfDs) which closed in April, with ‘winners’ expected to be announced in the summer.
Contracts for differences
It may be worth defining contracts for differences too, at this point:
A contract for difference (CFD) is a legally binding agreement that creates, defines, and governs mutual rights and obligations between two parties, typically described as “buyer” and “seller”, stipulating that the buyer will pay to the seller the difference between the current value of an asset and its value at contract time. If the closing trade price is higher than the opening price, then the seller will pay the buyer the difference, and that will be the buyer’s profit. The opposite is also true. That is, if the current asset price is lower at the exit price than the value at the contract’s opening, then the seller, rather than the buyer, will benefit from the difference.
The UK Government’s CfD scheme is its primary mode of supporting offshore wind development, by holding allocation rounds each year.
In the offshore wind industry, CfDs work like this:
A “Strike Price” is set for electricity, guaranteeing a minimum payment to generators for their power output. When the wholesale price of electricity changes, energy generators either receive a subsidy up to the Strike Price or repay any surplus above it, which helps reduce market uncertainty.
Billy Kay, The Scotsman
Strike Prices are fundamental to the development and hitting of the 50GW target and already in the UK, we are seeing additional capacity being added to meet this:
Dogger Bank
70 miles from the coast of Yorkshire, Dogger Bank A, B and C will become the world’s largest offshore wind farm. Equinor is leading its development. It has an expected 35 year lifespan, an anticipated 3.6GW output capacity and was connected to the National Grid in October 2023. It also made the renewables headlines for being the first of its kind to use HVDC technology on a UK wind farm, or, in full, a high-voltage direct current (HVDC) transmission system. Its statistics are heartening too:
- 400 jobs are being created
- 277 large wind turbines will be operational
- 2026 is the anticipated completion date
When we, as an industry, see the doubling of electricity demand and the need for offshore wind technology to sate and exceed the demand, projects like Dogger Bank fill us and others with positivity.
Join the debate on our LinkedIn, Facebook, Twitter and Instagram channels and tell us what you think of demands for electricity in the UK?
How our expert team can help you
HSEQ-360 Ltd utilise a team with wide ranging skills, competencies and experiences; including chartered engineers, chartered health and safety and chartered quality professionals. HSEQ-360 can certainly review your company’s operations and management systems and implement sustainability strategies which are reasonable and practicable for your business.
We operate a management system which is certified to ISO9001, ISO14001 & ISO45001; and we are specialists in developing bespoke management systems for your business. We can complete an environmental impact on your behalf and can provide practical recommendations on how to proceed environmentally.
For further information, please see our website or contact a member of the team on info@hseq-360.co.uk
