Concerns are rising that existing offshore wind projects in the UK could face abandonment due to what industry insiders describe as "disastrous" government handling, resulting in a significant renewable energy shortfall.

Ministers recently disclosed that no additional offshore wind farms would proceed in the UK following the latest government auction, where no bids were made. This outcome followed the government's disregard of warnings that offshore projects were no longer economically viable under the current system, a concern first reported by The Observer last month.

The offered energy prices did not account for the soaring inflation affecting industry costs. Moreover, inflationary pressures may now imperil previously approved schemes, including the multibillion-pound Norfolk Boreas wind farm, designed to power 1.5 million British homes, which has already been put on hold.

The failed auction was exacerbated by the government's decision to set a maximum price of £44 per megawatt hour, based on 2012 prices, mirroring the previous auction's rate, which was determined before inflationary pressures hit the industry and its supply chain.

Industry leaders are urgently calling on ministers to announce an increase in the maximum price for next year's auction. They also seek assistance to ensure that already approved projects can proceed. These pleas have been ongoing since January, with industry figures emphasizing that even with a price increase, offshore wind would remain one of the most cost-effective energy sources and enhance the UK's energy security.

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Sizeable gap between UK targets and present reality

The setbacks in the offshore wind sector pose a challenge to the UK's carbon reduction commitments, as this industry plays a crucial role in achieving those goals.

The UK aims to decarbonize its electricity system by 2035 and achieve net-zero emissions by 2050, with plans to nearly quadruple offshore wind capacity from around 14 gigawatts to 50 gigawatts by 2030. However, there is now a 24-gigawatt gap between anticipated procurement in offshore auctions and the 50-gigawatt offshore target.

This situation coincides with trade unions warning that the UK could lose hundreds of thousands of manufacturing jobs unless it follows the lead of Joe Biden and makes substantial investments in the green industry. The TUC (Trade Union Congress) stressed that the UK's industrial regions, such as the West Midlands, the Northwest, and Yorkshire and the Humber, are particularly vulnerable.

They estimate that approximately 800,000 manufacturing and supply chain jobs in sectors like automotive, steel, and plastics could be at risk without a climate-focused industrial strategy akin to Biden's Inflation Reduction Act, which allocates significant funds to climate change initiatives.

In response to these concerns, a Department for Energy Security and Net Zero spokesperson emphasized the UK's commitment to renewable energy and net-zero goals, highlighting substantial investments and job creation in the sector.