Energy secretary Amber Rudd says subsidies conditional on reducing cost of offshore wind

Amber Rudd

New government subsidies will be made available for offshore wind farms, energy secretary Amber Rudd has announced.

In a speech on the government’s energy policy at the Institute of Civil Engineers (ICE), Rudd announced that her department will run three auctions over the course of the Parliament to allow offshore wind developers to compete for price support contracts, with the first auction taking place by the end of 2016.

However, Rudd said the funding will only be available if the government’s “conditions on cost reduction are met.”

According to reports, developers of offshore wind farms will have to prove they can meet a strike price of £92.50 per MWh – the same as the Hinkley Point C nuclear power station – by 2020 to win a contract.

Rudd said that despite the costs of contracts for offshore wind reducing by 20% in the past two years, offshore wind is “still too expensive” and that further support will be “strictly conditional” on more cost reductions in the industry.

She added: “The industry tells us they can meet that challenge, and we will hold them to it. If they don’t there will be no subsidy. No more blank cheques.”

Rudd said her department’s number one priority will be energy security: “Energy security comes first and I am determined to ensure that the UK has secure, affordable, and clean energy supplies that hardworking families and businesses can rely on now and in the future.

“We are tackling a legacy of underinvestment and ageing power stations which we need to replace with alternatives that are reliable, good value for money, and help to reduce our emissions.”

She added: “Energy security has to be the number one priority. But no responsible government should take a risk on climate change either.”

In the same speech, Rudd also announced plans to close all coal-fired power stations within a decade, with all unabated coal-fired power stations closing by 2025 and their use restricted by 2023.