Michelle Thomas, Head of Eversheds' Clean Energy and Sustainability Team Head of the Renewable Energy team at Eversheds is quoted within this article.
Energy sector warns of hurdle to UK realising renewables bid
SUPPLY chain problems for wind power projects may be the biggest hurdle to the UK fully realising new plans unveiled by the government last week for 25 gigawatts of further offshore capacity by 2020, developers and industry groups said.
However, proposals that could see the capacity added at 11 new sites off the UK under a simplified new process unveiled by the Crown Estate — which manages the UK's seabed — received a largely favourable reaction.
A spokesman for Centrica, which says it is aiming to be the biggest UK wind generator, said the company welcomed the UK's long-term commitment.
However, he added that the company was concerned about Europe-wide problems in supply for new schemes.
"We see rising costs for turbines and vessel shortages. Skills are difficult to come by as well. These are European-wide problems, not just in the UK."
This was echoed by Michelle Thomas, head of renewable energy at international law firm Eversheds, who said: "The government's announcement is a positive step.
"However, there are still some serious challenges to the development of offshore wind power in the UK, especially while the return on investment currently stands at 7 per cent to 8 per cent."
She added that developers and investors are primarily concerned with grid connection, planning, construction and operational risks.
"Turbine manufacturers are pointing to the rising cost of raw materials and difficulty in securing the parts they need," she said. "This naturally leads to additional cost being passed on to the developer and their investors," she said.
"It seems to be the common view that the government will need to address these concerns if it has a chance of achieving its ambitious renewable energy targets by 2020."
Under the plans, the Crown Estate will invest up to half of the cost of obtaining planning consent for wind farm sites — in the third round of the country's wind power leasing programme — in a bid to push projects forward quickly.
A spokesman for the British Wind Energy Association said: "The government says it will share the risks with developers and is clearly signalling that it is serious about the future."
However, he conceded that being able to connect new projects into the national grid remains a concern.
"There is a long lead time for projects," he said. "We would like to see a more proactive stance from [UK regulator] Ofgem in ensuring infrastructure is there to take new electricity capacity."
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