A new report forecasting the energy generation mix out to 2030, has calculated the government will miss its 50GW offshore wind capacity target, with potential consequences for net zero.
Modelling from Cornwall Insight, included in its quarterly GB Benchmark Power Curve report, forecasts offshore wind capacity will increase from 12.5GW in 2023-24 to 47.1GW in 2030, narrowly missing the government’s 2030 goal.
The report found that delays in offshore wind deployment in the short to medium term contributed to the missed target. These delays are largely attributed to rising costs, most recently reflected in the 5th Contract for Difference (CfD) auction round, which saw no offshore wind taking part, as well as the cancellation of one of the UK’s largest offshore wind farms Norfolk Boreas, with the developers saying it no longer made financial sense.
The slower progress will raise carbon emissions, cutting the chance of meeting carbon targets and ultimately extending the time it takes to reach net zero.
Despite the concerns, offshore wind is forecast to become the largest source of electricity in capacity terms by 2028, making up 26% of the GB generation capacity by the end of the decade.
Figure 1: Future electricity generation capacity breakdown
Source: Cornwall Insight Benchmark Power Curve
Alongside electricity generation mix, the report analyses power prices and has projected power prices will linger at least 60% above pre-2021 averages until 2030 and likely beyond. The modelling from Cornwall Insight’s third 2023 Benchmark Power Curve, shows little movement from earlier in the year, with prices expected to peak at nearly £130 per MWh in 2024, before falling to a low of just over £80 per MWh by 2030. While this does mark a large decrease, it remains substantially higher than the pre-energy crisis levels of less than £50 per MWh.
Figure 2: Power price forecasts – average price per fiscal year
Source: Cornwall Insight Benchmark Power Curve
Tom Edwards, Senior Modeller at Cornwall Insight:
“Offshore wind delays, spurred on by cost worries and project setbacks, pose a roadblock to reaching net zero. We can see the country is travelling in the right direction towards a renewables-based electricity system, however, our estimates continue to show it is simply not fast enough to deliver on government targets.
“Time is of the essence, and it is critical that the government reassess its commitment to accelerating renewable energy adoption, which includes being more flexible when setting auction parameters to reach the UK’s offshore wind goals.
“Rolling back our net-zero ambitions and slowing our transition away from fossil fuels is likely to be a costly delay that will not only see us fall further behind in decarbonising the country but will leave consumers shouldering the prolonged burden of high prices. Without a resolute commitment to a greener and more sustainable future, achieving net zero emissions and pre-crisis energy bills becomes an increasingly elusive goal.”
- Ends
Notes to Editors
For more information, please contact: Verity Sinclair at v.sinclair@cornwall-insight.com
To link to our website, please use: https://www.cornwall-insight.com/
About the Cornwall Insight Group
Cornwall Insight is the pre-eminent provider of research, analysis, consulting and training to businesses and stakeholders engaged in the Australian, Great British, and Irish energy markets. To support our customers, we leverage a powerful combination of analytical capability, a detailed appreciation of regulation codes and policy frameworks, and a practical understanding of how markets function.
Benchmark power curve
Looking for more in-depth analysis and information up to 2050, visit our GB Benchmark Power Curve page to find out more about our comprehensive power price modelling service.
Or you can get in contact with Tom Ross:
Phone: +44 (0) 208 0169 159
Email: t.ross@cornwall-insight.com
