THE firm behind the UK's largest research and development project for the offshore wind industry says multi-million-pound wind farm projects in the North Sea could be thwarted by the Government's delayed Energy Bill.
The National Renewable Energy Centre (Narec) has pioneered a £300m offshore demonstration project which, if approved, will see 15 giant turbines built in the sea off Northumberland.
Narec submitted an application for the necessary Marine Management Organisation (MMO) approval in March last year for permission to construct the development.
The application process is expected to be complete by the first quarter of the year and it is hoped that preparatory work on the construction phase will start this summer.
The 15 turbines, which will be connected to the grid but will not operate as a commercial wind farm, will be built 1km apart and in water depths of between 35- 60m.
Although Narec has already begun talks with major manufacturers to collaborate on the build-out of the 100MW Blyth Offshore Demonstration Project, it says the Government’s delayed electricity market reform could effect the multi- million-pound test facility’s long-term future.
Steve Abbott, Narec’s marketing and communications manager, said: “The turbine developers are building out sites to last maybe 20-30 years so they need to know they’re getting a return on their investment in order for their projects to be viable. We’re currently in the application process and this delay won’t affect that.
“However, once we’ve got consent and we’re looking to leverage investment in the site from large-scale global manufacturers, then there’s the fear they might turn their attentions away from the UK market because there is no certainty over the renewable subsidy regime.”
The electricity market reform will replace the existing subsidy regime for renewables. But developers will not be able to sign up until 2015 because of the time required to put the reforms into legislation.
The Government has promised to grant interim subsidies, but because they will not be fully backed by legislation many companies will be reluctant to rely on them to make huge investments.
There are fears within the industry that alternative factories could be built in Denmark or Germany, where there is more certainty over the renewable subsidy regime.
These would serve the entire North Sea market, including the UK.
Abbot said Narec’s testing facility was essential for new suppliers to demonstrate the financial and technical viability of their product.
He said: “The Blyth offshore wind demonstration site provides the opportunity for the demonstration of up to 15 turbines, foundations and associated electrical infrastructure.
“It provides the opportunity for new alliances in the supply, installation and operations and maintenance of the turbines. However, the investment required to build out the site is estimated to be in the order of £300-£400m.
“If project developers are saying they are delaying investment, manufacturers will not be developing as many new models and our testing facility would be directly affected.”