Cost Reduction Task Force Report and Conclusions: Speech by Charles Hendry

I am delighted to be here today to launch the Offshore Wind Cost Reduction Task Force Report

The fact that we are here today, at the RenewableUK Global Offshore Wind Conference, says much about how far this industry has come in the UK in such a short space of time.

The UK is the global leader in offshore wind, we already know of the rich resources that surround this island, but we are determined to do more – and not just to ensure that we have more control over where our energy comes from. Even though renewable energy only accounts for a small part of consumers’ electricity bills, it is still essential that the industry recognises and acts on the need to bear down on costs, both to secure a competitive industry for the future, but also to provide long-term protection to consumers from volatile fossil fuel prices.

When I launched the UK Renewable Energy Roadmap last year, we said that offshore wind could deliver up to 18GW of clean energy by 2020, but that we need to address the issue of rising costs in this sector. This would then unlock the vast potential of offshore wind in the following decade and beyond. To that end, we established an industry led Task Force, to examine the evidence base provided largely by The Crown Estate, through their Offshore Wind Cost Reduction Pathways Study, which is also published today, but also evidence from other comparable sectors, for example the oil and gas sector, which has faced similar challenges and succeeded.

I would like now, to take this opportunity to thank Rob Hastings and the team at The Crown Estate, for all the work in delivering their Pathways study, and to thank the Devolved Administrations and all the other bodies and companies who inputted to the Task Force work, there are too many to mention, but are listed in the report.

I am also encouraged by the reports’ findings, that the challenge we set in the Roadmap of getting the cost of energy down to £100/MWh by 2020 is achievable – challenging yes, but if we work together to address some of the barriers identified in the report and the actions proposed to alleviate these barriers – we will start to see costs heading on a downward trajectory.

It is also important to note that this isn’t the last word on cost reduction. This report is a constructive first step in a journey to bring costs down, and will require more work to follow up on the actions in the report and constant vigilance to address issues as they arise in the future. There is lots more to do.

This is a comprehensive report, it sets out actions and possible solutions to achieve our target. It is further evidence of an industry that is maturing fast, taking responsibility for its future direction and growth – but also shows where concerted action between Government and industry can make a difference. I welcome the establishment of a new Offshore Wind Programme Board to initially take these recommendations forward.

Let me be clear, this is not a talking shop, but to bring together Government and industry to act as a catalyst in taking forward these recommendations.

The Task Force’s report signals many areas where industry need to take the lead – for instance by undertaking contracting strategies and other ways to support the supply chain, and developing more innovative financing structures – and it also highlights areas where Government will continue to be committed to action..

Finally, I would like to say two things:

1. I want to express my thanks and appreciation to all the Task Force members, who gave their time and experience to this work and their contribution has been extremely valuable. And particularly to Andrew (Jamieson), who has led this Task Force will great skill and determination, it is no mean feat to have done all this work in such a short space of time, and I know from experience you have been instrumental in driving this forward, thank you.
2. We have a huge opportunity before us. The opportunities in offshore wind, in terms of climate change, security of supply and most importantly, in creating a new and exciting energy frontier, supporting hundreds of thousands of jobs, bringing prosperity to areas of the UK in most need of a new industrial revolution are within our grasp. I firmly believe we can achieve the challenges set before us in this report – Government is up for this challenge, and this report shows that industry is too.

Thank you
 

Source: http://www.decc.gov.uk/en/content/cms/news/crtf_chspeech/crtf_chspeech.aspx

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