On Friday, an auction for contracts to build new wind farms received zero bids from developers. It’s the first time that’s happened since the current system was introduced almost a decade ago, and it raises major questions about the UK’s environmental targets.
Anything that increases bills will be a hard sell to voters still reeling from the worst cost-of-living crisis in decades, particularly if the optics include handouts to power companies. But with Sunak’s commitment to net zero already being questioned, accusations that the Conservatives have allowed a successful UK industry to fail would also be damaging.
But the industry has been warning more recently that inflation pressures and soaring costs for raw materials mean that the declining cost curve can’t continue forever. Friday’s blow effectively means a missing year for offshore wind development at a crucial time. On top of that, projects in the previous auction are being put on ice because rising costs.
“Our industry needs the certainty of stable, future contracts for difference auction rounds based on sustainable pricing, separate pots for offshore wind, and realistic assumptions,” he said.If power developers were looking for positive signs from the government, there wasn’t much to cling to in an initial statement from the Department for Energy Security and Net Zero.
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