Sir Keir Starmer has said billions of pounds of private investment will flow into Britain’s industrial communities, including Aberdeen, after the UK secured a record offshore wind auction which ministers say will support up to 7,000 jobs.
He was speaking as the government confirmed that the latest Contracts for Difference auction, known as AR7, had leveraged £3.4billion of private sector investment into ports, factories and domestic supply chains, underpinned by £204million of public funding through its new Clean Industry Bonus.
During a visit to Perth yesterday - flanked by Scottish Secretary Douglas Alexander and Energy Secretary Ed Miliband - the prime minister said that up to £1.1billion of that investment is expected to be directed to Scotland.
Ports including Aberdeen and Nigg highlighted by ministers, alongside an estimated 2,400 Scottish jobs linked to supply chain activity.
“We promised to take back control of our energy with clean, homegrown power – and today we’re delivering in a way that brings good industrial jobs for Scotland and the rest of the country," Mr Starmer said.
“Billions in investment will flow into hardworking industrial communities to build clean energy supply chains in Britain. This is how we revitalise our proud industrial heartlands and secure our energy future and bring bills down for the long term.”
The government said the auction had secured 8.4GW of offshore wind capacity – the largest single procurement in Europe – and claimed that every £1 of public funding had leveraged £17 of private investment. Industry estimates suggest the investment could support up to 7,000 jobs across the UK, with ministers reiterating their ambition for 400,000 clean energy jobs by 2030.
German firm pulls out
However, as the prime minister made that announcement, Germany’s EnBW confirmed it was pulling out of two major UK offshore wind projects – Morgan and Mona in the Irish Sea – after failing to secure subsidy contracts.
The projects, developed with BP, had a combined capacity of 3GW and had already secured planning consent.
EnBW said the projects were “no longer economically viable” and took a €1.2 billion impairment charge. Reuters reported the company had already paid £840million in lease fees to the Crown Estate, with no further payments to be made.
A spokeswoman for JERA Nex BP, which now holds BP’s offshore wind interests, told The Times: “JNBP has its own strategy, financial framework and geographic priorities. We believe that there are still good pathways to delivery in our UK portfolio and we are assessing our options for taking the projects forward.”
The withdrawal has added to industry concern that, despite record headline numbers, some large-scale developments are struggling to stack up financially under current market conditions.
90,000 jobs 'at risk'
Further questions over the resilience of the UK’s clean energy and net zero strategy were raised in the Telegraph, which reported warnings from the Institute for Public Policy Research that Britain’s reliance on China for net zero technologies could put up to 90,000 jobs at risk in the event of a major supply chain disruption.
The think tank warned that a “severe, year-long disruption” to battery component supplies could cut UK battery and electric vehicle production by nearly half, threatening tens of thousands of manufacturing jobs.
The report urged ministers to accelerate domestic production of key components and diversify supply chains – a warning that comes as the government argues its Clean Industry Bonus and offshore wind strategy will help onshore more of the economic value of the energy transition.