The head of RWE, the United Kingdom’s top power provider, has called for an increase of up to 70% in the price offered by the British authorities for electricity generated by wind farms. Tom Glover, RWE’s UK Country Chair, stated that without this increase, new wind parks will not be economically viable. He believes that London should pay between £65 and £75 per megawatt hour (MwH) for the power generated from wind farms, compared to the £44 offered in the most recent government-run auction.
Glover emphasized, “We need to see a materially higher price. Every project is different but £65 to £75 feels about the right range.” His statement comes in response to the offshore wind allocation round in September, which resulted in no offers from developers to build new wind farms.
The government auctions require operators to sign up for a “contracts for difference” program, which guarantees a minimum “strike price” for their output. If market prices fall below the strike price, power providers are paid the difference. Conversely, if market prices exceed the strike price, the generators must pay the excess.
The government is currently preparing a draft plan for the next allocation round, which is expected to be released within weeks. However, raising the strike price could lead to a significant increase in consumer bills. Glover argues that alternatives like natural gas would be even more expensive than wind energy. He warns that Britain risks not achieving its target of building 50 gigawatts of offshore wind capacity by 2030 unless the next bidding round offers a more attractive price for investors.
It is crucial for the country to support the development of wind farms as a part of its renewable energy goals. Wind energy is a clean and sustainable source of power that can contribute significantly to reducing greenhouse gas emissions and combating climate change.
Expanding the wind energy sector will also create job opportunities and stimulate economic growth. The construction and maintenance of wind farms require a skilled workforce, providing employment opportunities for both local communities and the wider industry.
Additionally, increasing the price offered for wind-generated electricity would incentivize investment in the sector. Investors often look for projects that offer a reasonable return on their investment. By offering a higher price, the government can attract more investors and ensure the successful development of new wind farms.
The United Kingdom has made significant progress in expanding its renewable energy capacity in recent years. However, to continue this momentum and meet its ambitious targets, it is crucial to address the economic challenges facing the wind energy sector. By providing a fair and competitive price for wind-generated electricity, the government can ensure a sustainable and prosperous future for the industry and the country as a whole.
In conclusion, the head of RWE has called for an increase in the price offered for wind-generated electricity in the United Kingdom. Without this increase, new wind parks will not be economically viable. The government must carefully consider this request to support the growth of the wind energy sector and ensure the achievement of renewable energy goals. By offering a more attractive price, the country can attract investors, create jobs, and contribute to a greener and more sustainable future.