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Offshore wind "innovators" invited to bid for share of £10m Government funding

Up to £10 million in Government funding could be made available to "innovators" with ideas about how to reduce the cost of offshore wind energy.06 Nov 2012

Between five and 10 projects could take a share of up to £7m, made available under the third round of the component technologies development and demonstration scheme, supported by the Department of Energy and Climate Change (DECC) and the Technology Strategy Board (TSB).

A further £3m is being made available for the development of technical feasibility studies for offshore wind innovations in the early stages of research. Applications are particularly being sought from sectors where existing technologies could be adapted for the offshore wind sector, such as aerospace and oil and gas.

Projects supported by DECC and the TSB following the first funding round include a 7 megawatt (MW) offshore wind turbine gearbox, created by Yorkshire-based company David Brown Gear Systems, and a concrete gravity foundation developed by Gravitas Offshore Ltd, based in Maidenhead. Winners from the second funding round will be announced shortly.

"Through this funding we want to encourage the development of technologies that will reduce the cost of energy from offshore wind farms, while ensuring that companies in the UK supply chain increase their share of the market," TSB chief executive Iain Gray said. "We'd particularly welcome ideas from companies in parallel sectors - such as oil and gas, aerospace and manufacturing - who may wish to expand into the offshore wind sector."

Both competitions are open for applications until 16 January, and a briefing event for potential applicants will take place in London next week.

The funding announcements follow a Technology Innovation Needs Assessment (TINA) (18-page / 511KB PDF), published by the Low Carbon Innovation Coordination Group (LCICG), in February this year. According to the TINA, offshore wind has "tremendous potential" to reduce the UK's reliance on imported fossil fuels and help the country meet its renewable energy generation and carbon commitments. However further investment in innovation is "critical" in order to cut costs and improve efficiency, according to the report.

Renewable energy law expert Gary MacDonald of Pinsent Masons, the law firm behind, pointed out that the new competition followed earlier incentive programmes, including the £10m Saltire Prize launched by the Scottish Government earlier this year.

"It is widely accepted that offshore wind costs are too high, and DECC has again used the competition to encourage greater application of the knowledge in our oil and gas industry in driving these costs down," he said. "The TSB has picked up on a recurring criticism of the offshore wind sector in the UK - the relatively small share of the supply chain market secured by UK businesses."

However, he added that that although public funding incentives could be "crucial in helping unblock our renewable potential", lack of regulatory certainty remained the "largest single barrier to investment" in offshore wind and in the renewables sector generally.

The Government has been criticised by the energy industry for leaving much of the detail of its flagship Electricity Market Reform (EMR) programme to be covered by secondary legislation, following the publication (307-page / 1.9MB PDF) of its draft Energy Bill in May. However Energy Secretary Ed Davey announced last month that  the Bill, containing additional powers and detail of the regulatory reforms, would be published before the end of the year.

EMR is set to bring about the most extensive reforms of the electricity market since privatisation, according to the Government. It proposes a new system of financial incentives designed to ensure that low-carbon forms of electricity generation can compete fairly in the marketplace, backed with a 'capacity market' aimed at ensuring that consumers continue to benefit from reliable electricity supplies at an affordable cost.