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Government support for floating offshore wind farms is welcome but other low carbon technologies need backing

25 January 2022
Our Energy and Planning experts review the government's support for offshore wind farms, discuss further support for other innovative technologies and consider the physical constraints on the UK's electricity and gas transmission and distribution networks.
Darren Walsh, Partner and UK Head of Energy at DWF, comments on £31 million in government funding to drive forward plans for offshore wind farms. He said: 

"Government support for emerging technologies in the renewable and low carbon energy generation market is essential. We have already seen that support for off-shore wind farms, through the contracts for difference mechanism, has greatly assisted the development and commercialisation of this market over the past decade or so. 

"Technological advances and world-scale deployment of these technologies has seen the cost of turbine production and supply fall significantly with strike prices dropping to less than a third of what they were when first introduced. Indeed, developers and sponsors are able to consider subsidy-free deployment of wind turbine technology, photo-voltaic modules and other low/zero energy generation technologies, so we are seeing in real time that this level of government support does work. 

"Similar support would be welcomed for other innovative low/zero carbon technologies, such as tidal range and tidal flow technologies, where the UK could greatly harness the immense natural energy within its coastal regions; as well as further support for the developing green hydrogen market. 

"The Nuclear Energy (Financing) Bill, which will introduce a Regulated Asset Base model as an option to fund nuclear projects will assist in unlocking affordable capital to fund future new nuclear build; and with this model already having been deployed successfully on other large-scale energy and infrastructure projects, it would be desirable for this financing model to be extended to cover other emerging low/zero carbon energy generation and storage projects, such as tidal and green hydrogen, to encourage the development and commercialisation of these nascent markets."

Andrew Batterton, DWF's UK Head of Planning, added:

"Such support and encouragement of investment should also consider the physical constraints on the UK's electricity and gas transmission and distribution networks; as further generation and supply of energy will require enhanced and more robust infrastructure. Equally, advancement of energy storage, such as battery energy storage and utilising green hydrogen and carbon capture and storage as energy storage vectors will also play a key role in the advancement of the UK's energy security."

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