Vattenfall responds to UK Government proposals to update Offshore Wind Supply Chain Requirements
- Today, the UK Government has confirmed updates to the Supply Chain Plan process ahead of Contracts for Difference Auctions in December this year
- Updates to the Supply Chain Plan process will see the plans assessed for compliance at the Milestone Delivery Date, around 18 months after CfD award, instead of commissioning – a move which will reduce at risk investment made by developers in multi billion-pound projects
- Vattenfall’s Norfolk Vanguard and Boreas could deliver almost 10% of the UK’s 2030 Government target, and are expected to progress into operation as early as the mid 2020s
The UK Government has today updated Supply Chain Guidance to developers and supply chain companies, ahead of Contracts for Difference Auction Round 4, which is expected in December this year.
Key highlights include shifting forwards the timeline for assessing whether it accepts or rejects a project's Supply Chain commitments to around 18 months after CfD award (known as the Milestone Delivery Date), in a move that will reduce the investment risk to offshore projects in the UK pipeline. It also proposes new powers of legislation to pass or refuse a supply chain implementation statements.
Supply chain plans are a key part of the Contracts for Difference process, designed to help stimulate the UK offshore wind supply chain as well as encourage investment in skills and innovation. They apply to projects with an installed capacity of over 300MW applying for a Contract for Difference.
Danielle Lane, UK Country Manager at Vattenfall
Danielle Lane, UK Country Manager at Vattenfall said:
"The decision to assess supply chain plans at Milestone Delivery Date instead of at commissioning is a positive step in reducing the risks for developers – making it more likely that investment decisions can be taken to keep projects on track to deliver significant amounts of renewables capacity by the mid 2020s. The prospect of losing a Contract for Difference at MDD stage is still a significant investment risk however, and as such it is vital that a clear and transparent supply chain assessment process is put in place.
"Our priority is to deliver the best-value projects for bill payers, as well as supporting the growth of the UK supply chain. Offshore wind creates huge opportunities for businesses of all sizes, but to make sure those businesses don't miss out, planning determinations must progress in a timely manner.
"This news is a vital step forward for the offshore wind project pipeline, with the eyes of the world on the UK ahead of COP 26. It also goes some way to providing the greater certainty investors need to deliver world leading projects such as Norfolk Vanguard and Boreas, which could deliver as much as 10% of the UK’s 2030 target."
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