Renewable Energy: Successful Government Auction Greenlights More Schemes

The Government has just completed its latest renewable energy auction as part of its long term plan to meet its 2050 net zero legal requirement. The sixth such round of auctions has secured enough successful bids to power 11 million homes as record funding has been made available to suppliers.

This auction has been markedly more successful than the last where precisely zero bids were received by the previous Government. The stimulus this time came in the form of a £1.5bn pot, some 7 times greater, as well as removing the onshore wind farm ban. In total, the winning bids will support 131 new projects including wind farms, solar farms and tidal power projects, aiming to attract over £14bn of new private investment.

The ultimate goal is the delivery of cheaper electricity, estimated at saving some £3bn a year compared to the cost of running a gas powered plant. It will also improve our energy resilience against ongoing geopolitical supply crises and reduce our fossil fuel mix. Altogether, consumers and businesses should see cheaper bills, with the first schemes operational by 2026.

The Government is aiming to produce 60GW of energy through offshore wind by 2030, part of the election pledge to double onshore wind, triple solar power and quadruple offshore in that time.

And while the headlines are a dramatic improvement on what came before, the auction will only deliver half of the offshore capacity needed in order to meet the Government’s targets. Most of the offshore wind capacity was not bid on as it failed to reach a bid low enough to secure the contract.

What has been Awarded?

That said, the balance and focus of the funding went to support 5 GW of offshore power (enough for 3 million homes); the least controversial in terms of community and planning impacts and can be delivered at scale before the end of the decade. The largest of these is Hornsea 3, off the Yorkshire Coast.

Another eye-catching scheme is Green Volt, a 400 MW Scottish project, which will become the world’s largest floating wind farm. These farms can be deployed further out at sea where the wind is stronger and more consistent in waters over 60 metres, usually a major challenge for conventional offshore fixed farms.

The auction also awarded contracts to about 90 new solar farms, while tidal power developers secured contracts for six new projects.

And heralding the restart of onshore wind, 22 new schemes will deliver up to 1GW. All but one will be in Scotland, but opening the door to more to come in England and Wales.

Impacts on the Landscape

While the acceleration in the renewables mix is to be welcomed, it will have implications for local communities adjacent to schemes. They will see additional infrastructure development needed to support schemes connections to the Grid.

While communities will still get a say in the consultation process, the reality is that the planning regime will be more streamlined and presumptive going forward. Ultimately, the national interest and drive for energy security will probably weigh greater than local opinion.

These impacts may come in a number of forms. Firstly, albeit much slower, will see the appearance of more onshore wind farms. While most will be confined to more remote upland areas of Scotland, there will inevitably be more applications across the country to meet demand further south. This could lead to planning conflicts and locally subdued housing markets while indecision prevails on location and development. Given net house price increases over the last two decades, the short term loss in property values could be mitigated, but it may be at a reduced rate to other comparable areas without wind farms.

It is clear that offshore schemes will expand faster. While the majority of infrastructure is out at sea, the array still needs to be linked to the grid onshore. This requires cabling and associated works to be sited either close to shore and sub-surface works that could proceed miles inland to meet an effective grid connection.

The Rampion 2 offshore scheme off the West Sussex coast will require a 38.8km underground cabling route from its landfall at Climping to a new onshore substation at Oakendene, 2km from Cowfold. The route will take it between the outer suburbs of Littlehampton and Arundel, while additional branches and accesses will be required at multiple locations along its length.

This extra capacity delivered to the Grid will require an expansion of above ground cabling, meaning more pylons criss-crossing our countryside. The challenge is whether the Grid can expand to meet this capacity increase and likely resistance to new pylon routes.

In November 2023, a report by electricity commissioner, Nick Winser stated that the Grid would need to expand within 7 years by four times what had been achieved since 1990. Along with onshore wind and low traffic neighbourhoods, pylons spoiling vistas will see a return to the conflicts seen during the roll out of the “SuperGrid” in the 1950s.

The Clean Power by 2030 Report noted that “There is little point building new wind or solar farms if the grid cannot transport the energy they produce. In 2022 renewable generators were paid £1.38 billion to reduce supply when there was more electricity in some areas than the grid could safely handle.” Many of the 131 schemes that have now joined the queue may remain as “zombie projects that may never be delivered” if Grid infrastructure investment does not keep pace.

Tracking schemes for Property Transactions

It’s clear that there will now be a step change in the roll out of renewable energy infrastructure that could locally have impacts for your client and their proposed property transaction. These schemes will come through the large planning application processes at local authorities and will be identified through our Energy and Transportation Data in our relevant search reports. For residential transactions, these can be found in our Avista and Homebuyers Reports; for commercial transactions, see our Review Report.

For more information on our Energy and Transportation Data, call us on 01273 257 755 or email info@groundsure.com