Has UK offshore wind farming become too costly?

In a market characterized by price increases and turbine scarcity, the UK government has failed to enact regional climate policies that encourage and optimize the proliferation of UK offshore wind projects. Indeed, the promotion of wind investment structures has been undermined by the prevailing quota and certificate subsidy mechanism, as well as severe planning permission limitations.

If Shell is to be criticized for recently announcing, in an untimely fashion, that the company is pulling out of one of the largest offshore wind farm projects that the world has ever seen - the London Array - then the finger of blame should also be pointed firmly at a government that has largely failed to optimize the take-up of wind projects in the UK.

The UK operates a quota and certificate subsidy mechanism called the Renewables Obligation (RO). It is designed to promote and incentivize the generation of electricity from eligible renewable sources in the UK by placing an obligation on suppliers to source a growing proportion of electricity from renewable sources. Suppliers then meet their obligations by presenting Renewables Obligation Certificates (ROCs).