Analysis by PwC shows the UK will miss its 2020 renewable energy targets unless a ‘quantum leap’ in offshore wind capacity investment is achieved, with reforms to the energy markets to attract pensions and life assurance funding.
Offshore wind represents the single most important component of the renewable energy strategy, and is targeted to deliver around half of the additional 27GW generation capacity required to meet the UK’s 30% renewable generation target by 2020. But, last year, less than half the average annual roll out rate of 1.1GW needed to meet the 2020 target was achieved. Developers will face a peak cumulative funding requirement of up to £10bn per annum to achieve the annual roll out rate needed, assuming limited project finance is available during the construction stage.
Offshore wind plays a make or break role in the UK’s ability to hit its energy targets and time is running out very quickly on our ability to achieve them.
This report puts forward proposals to resolve pre construction financing issues in the sector.