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By Gwladys Fouche, Reuters
Uncertainty over British plans to change renewable energy regulation could halt investments in offshore wind power for up to three years, Norwegian energy company Statoil said.
Statoil is part of a consortium that is building Sheringham Shoal, a 315-megawatt (MW) wind farm off the coast of eastern England and is eyeing the construction of a much bigger wind farm nearby — a 9,000 MW wind installation at Doggerbank.
Anne Stroemmen Lycke, vice-president for Wind Energy at Statoil, said on Tuesday that a proposed change in the subsidy regime in Britain towards a full system of feed-in tariffs could create uncertainty and discourage investment.
Britain hopes to build at least 32,000 MW offshore wind power capacity through its tender process in a bid to cut its carbon dioxide emissions.
The UK's Conservative-Liberal Democrat government, in its coalition agreement, said it planned to introduce a full system of feed-in tariffs paid to households and businesses that generate their own green electricity.
"From the moment they decide to send the feed-in tariff for a hearing, things will stop," Lycke told Reuters.
"Nobody is going to invest that much money if they do not know what they are going to get from subsidies," she said on the sidelines of a conference on renewables.
Any change in the regime would require a two-year hearing followed by another year of legislative debate, she said. "That means three years of uncertainty."
COSTS MUST COME DOWN
Statoil said it expected to make its investment decision for Doggerbank in 2014, adding that costs must be reduced significantly for the project to make commercial sense.
"We need to lower capital expenditure costs by 20%," said Lycke. "And we need to lower the operational maintenance elements to the same levels … that we have at (farms) nearer shore. It is quite a challenge."
She said there was not enough competition in "several elements of the supply chain", including turbine prices, and that offshore wind costs remained high.
"We have not done enough yet as an industry," she said. "Hopefully we will have come a bit further by the time we come to the Doggerbank zone."
She said that beyond Britain, Germany was the most promising market for offshore wind power. More and more countries are seeking to generate emissions-free electricity from wind parks.
"Germany needs green power as they have a lot of coal power plants that need to be phased out, and they need to build an independent power supply," Lycke said.
"Denmark has been moving as well. We see that Spain and Portugal are starting to think about it at least. So is France and the United States."
