Unlocking the UK’s Potential

A statement from our Chief Executive, Matthieu Hue

The UK's potential to become a world leader in renewable energy is within reach. We stand at a crucial moment that will determine our success in this global race. That's why we urge the Government to take bold steps forward and maximise the opportunity. Allocation Round 6 (AR6) is a game-changer and will restore investor confidence if budgets are increased.

Let's get one thing straight – this isn't about the renewable energy industry trying to keep the strike price high.

It's about the UK maintaining its leadership position in the global renewable energy market. It's about showing investors that we're committed to developing new technologies, like floating offshore wind. It's about nurturing our supply chains and creating jobs right here in the UK.

And most importantly, it's about demonstrating the UK's unwavering commitment to meeting its net zero targets by 2050.

What’s the problem with the current situation?

The sums don’t add up.

The UK has a large pipeline of shovel-ready solar and onshore wind projects ready for AR6. The current budget falls short and only stretches as far as half or less of this pipeline. That’s a problem, as the UK is missing out on an opportunity to speed up deployment of these low-cost and quick-to-build onshore wind and solar projects.

Auction Round 6 will also play a key role in determining the future of floating offshore wind. If we want to reach our net zero target by 2050, the UK will need close to 100GW of offshore wind, with up to 50% of this coming from floating offshore wind. Test and demonstration projects are key stepping stones to building a robust British supply chain for floating offshore wind. If we can seize this opportunity, the UK stands to benefit from the projected ￡92 billion GVA and the creation of over 100,000 jobs within the offshore wind industry by 2030.

In short, we need a budget that matches the size of the UK’s ambitions.

Why does this matter?

This isn’t just a problem for the renewables sector; it’s a problem for the UK as a whole.

Without additional AR6 budget, we won’t reach national net zero targets for existing technologies – such as onshore wind and solar – and emerging technologies, like floating offshore wind, resulting in a lost opportunity to develop our supply chains and expertise.

If we keep putting off new capacity to later auction rounds, we're also putting even more strain on delivering grid connections in the years to come in turn.

A successful AR6 will bring lower energy costs and enhance energy security.

By building out renewable energy projects here in Britain, we can welcome a future where clean energy is not only affordable but also abundant. And, with the ever-increasing demand for energy, ensuring energy security is paramount. AR6 has the potential to put us on the right path towards this.

We need to be proactive and get the ready-to-go projects rolling now, to ensure smooth sailing down the line.

What does this mean?

The Contracts for Difference (CfD) is fundamentally a good mechanism, delivering new generation at the lowest possible cost to customers, while protecting them at times of high electricity prices. But in order for the UK to get ahead in what is a global race and restore investor confidence, we need to be bolder. Much bolder.

The UK is world-leading in its renewable energy industry. At EDF Renewables UK, we have 41 renewable energy sites – covering battery storage, onshore and offshore wind – and close to 14GW of projects in planning and development in the UK alone.

Yet the UK will lose its position as a focal point for prospective investors in new technologies, like floating offshore wind, without bold steps being taken by government to support this technology and the wider industry and the step up needed for AR7 to get us back on track will be huge.

We must act immediately

While the increase in the AR6 budget in March of this year was a step in the right direction and very welcome – it wasn’t the big stride we needed to show the world that the UK is fully committed to renewable energy deployment.?

We need increased budgets for the AR6 to allow for a sufficient pipeline of projects gaining a CfD to build out onshore projects and kickstart the UK’s floating offshore wind industry.

We need to consider the economic benefits, the job opportunities, and the positive impact on our environment. We can't afford to miss this opportunity.

We can pave the way for a brighter and greener future, attract investment and drive innovation.

There’s no time to waste. The UK must act now.