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The reNEWS Podcast
Is UK offshore wind back on track?
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A dispatch from All-Energy 2026 in Glasgow featuring interviews with RWE's Adam Ezzamel, Ocean Winds' Mark Baxter, Scottish Renewables boss Claire Mack and Ewan Walker, the project director of the Ayre floating wind farm.
Welcome to the Renews Podcast with me, Stephen Donne.
SPEAKER_01Where the UK market slightly lags behind is that developers aren't held harmless in the case of grid delay. It's not a risk that we are fully protected from, and therefore we you know we're gonna have to be very cautious about what we do in nailing down programs for our project.
SPEAKER_00Welcome to All Energy 2026 in Glasgow, where the great and good of Scotland's energy sector is gathered over to day conference. Whether it's a great issues, hydrogen, onshore wind, solar hydro is being talked about here at the energy. And on day one, one of the headline panels was about a sector and whether it has a turn the corner following January AR7 results. So I got among the panelists to get their take on whether the UK is back in the offensive wind big time, or if there remains work to be done.
SPEAKER_01My name is Adam Izamel. I'm uh with RWE and I'm the project director for the Dogger Bank South project. Well I think the first thing to say is that AR4, 5, and 6 bridged a really tough time. The global pandemic, the end of the era of free money, uh and obviously the conflict in Ukraine and its resulting effect on commodity prices. And we're still here. You know, we've survived very, very tough five years as a sector. In terms of AR7, it's amazing and brilliant for the sector that more than eight gigawatts of um of capacity was awarded. Uh from an RWE perspective, we're all over the moon to secure 6.9 gigawatts of new projects, the two uh Norfolk Vanguard projects, which are round three projects, uh, the Owl the War Extension Project, which is the first extension project to get a CFD, and of course the Dogger Bank South projects, which are the first projects to uh to obtain a CFD um pre-consent. So a huge result for RWE, I think a great result for the industry. And you know, now it's very much full focus on delivering uh those projects.
SPEAKER_00I think the point was made at the panel that CFD is one waypoint, if you like, on the road to being a successful project. You know, the AR7 projects are still obviously in their early stages of reaching towards FID and financial close. But do you see any challenges now on that path from AR7 Award into FID to really make AR7 a successful auction round as a developer looking at the various different bits of the jigsaw that have to come together for you to hit FID?
SPEAKER_01Yeah, I mean I think that there's there's a couple of different answers to that. I mean there's there's the Norfolk Vanguard projects. I mean, there the the the the delivery risk is is very limited indeed. I mean the supply chain is uh is secured, we're well through the construction of the of the Ofto uh part of that project. Um and you know, I'd be very, very confident that that will result in a uh a huge success uh when it comes online towards the back end of this decade and early into the next one. Um the Avonamore and Dogabank South projects that we have are just you know it's it's just a fact that they're further back in the project lifecycle, uh, and therefore, you know, it's it's not a question of if, but but when we will deliver those projects. And you know, really now we've got CFDs for that project, uh, or for those projects, it's it's a question of engaging properly with the supply chain, locking down both supplies and costs, um, and and you know, working with um with other stakeholders to make sure that we get to financial close and then deliveries as quickly as we can.
SPEAKER_00You mentioned grid as being probably the number one risk for a lot of projects at the moment. I mean, that falls into different categories, whether it's delays to the K2 process or it's the lack of any sort of protection around the late delivery of grid, which you pointed out on the panel. I mean, could you expand on that point in particular around sort of AR7 projects and looking ahead maybe into AR8 and how big an impact that might be to project delivery?
SPEAKER_01I mean, I don't think this is an issue that's specific to AR7 projects, I think it's specific to the entire industry, and I don't think it's only an offshore uh issue either. I mean the fact is that the grid requires a monumental upgrade in order to accommodate uh the build-out of renewables. Um and whereas previously, you know, I've been developing projects for over 50 years. I mean, previously a grid connection, you know, it's a question of basically turning up and plugging into the nearest substation. Well, nowadays the enabling works that the grid require to build to facilitate a connection are often as large in scale as the wind farm uh itself. And of course, with that comes risk. Um, maybe return to the Q connection reform process in a minute, but you know, we need we need grid to be able to deliver for us to even commission our projects, let alone um export from them. And that is going to be an issue that the industry is gonna have to face over the next few years. Now, I think where the UK market slightly lags behind some of our continental neighbours is that developers aren't held harmless in the case of grid delay. And this is this is something that uh you know we have to explain to our uh our shareholders, um principally in Germany, but but also our joint venture partners. It's not a risk that we are fully protected from. Um and therefore we you know we're gonna have to be very cautious about what we do in terms of uh in nailing down programs for our project.
SPEAKER_00Just finally when you look ahead, obviously AR7 is AR7 and you're busy dealing with that in your current role, but maybe stepping back and thinking about your experience in offshore wind and looking ahead to AR8. What are the key messages from industry for government around AR8? And where does the political risk lie in the future for offshore wind in the UK, given that we're coming off a weekend of results, unusual results in many respects in UK politics?
SPEAKER_01A major positive outcome from AR7 was where the price cleared. Uh £91 and £89 for fixed bottom offshore. Um I mean we've we've commissioned research that showed that any clearing price before night uh lower than £94 per mega hour in 2020 before prices protects the consumer. So I think that's that's the positive news. I think really it's important that the sector sticks as close to that as possible going forward because I see a big political risk around rising uh energy costs and a risk to the sector in particular, if it's perceived, wrongly so in my view, but if it's perceived that it's renewables that's driving uh any increase in costs. And that will be exploited by uh the enemies of our sector, there's uh that there's there's no doubt about it. Um but in terms of looking forward to uh AR8, I think £91 or thereabouts, it's it's a price that works for the consumer, but it's also sustainable for the sector. It's going to result in projects that have a very high chance of delivery. Um and you've got to remember also that the CFD in itself protects the consumer from volatility because it locks in those uh those prices for 20 years. So I think I'm really quite optimistic about where the sector is in the aftermath of AR7, but also running into AR8. And I think what I'd say above all else, you know, the government made some significant interventions in advance of AR7. Changing too many parameters between auction rounds, I don't think anybody welcomes that. We value certainty, we value a welcoming regulatory environment. The CFD, the 20-year CFD, is the gold standard in terms of um state support for the sector anywhere in the world. It's something that RWE is looking to advocate for in other European markets. Let's tinker as little as possible, let's you know, make sure that um that risks are understood and let's get on and decarbonise the um the electricity sector.
SPEAKER_03Mark Baxter, project director, Ocean Winds.
SPEAKER_00So, Mark, we're just after uh the conference session titled Is Offshore Wind Back on Track? Maybe you could tell our listeners what your high-level view of that question is post-AR7?
SPEAKER_03I think the way we discussed it on the panel was uh AR7 was certainly successful in volume, in diversity of projects, with projects being successful in England, Wales and Scotland. I think the message that we we discussed was whether that was accidental, and I think I think the point was it probably is, and therefore looking forward to AR8 and future rounds, it's how do you make that more intended that you get more projects across across the island?
SPEAKER_00I mean you made the point that winning a CFD is not really the end point, it's just a point along the journey. Really, it's about FID. When you look ahead to AR8, which is obviously ocean winds focus at this moment in time, what are the blockers to winning a CFD and also hitting FID?
SPEAKER_03I think it's an interesting point because I did want to make that quite strongly, is that CFD doesn't automatically mean success. Projects have to go through quite a large piece of work to reach financial close and ensure that all the lendings in place, all the projects are reasonably de-risked, and therefore, you know, really the test of a successful project is meeting that milestone, financial close. And so when you look forward to AR8, the things that investors are looking at from the Scotch projects, and particularly ours, is you know, are you pricing risk effectively into your bids so that you don't come into a problem post-bid? So we have to go through quite a rigorous process of understanding all the assumptions that we make as part of that process and make sure that we're making the right judgment calls on some of the quite volatile situations that are happening at the moment. And we understand that you know for AR-8, there's not going to be a resolution to transmission charging from an enduring perspective. But what we do think government could do as part of the AR8 framework is give guidance on what people should assume for tonivos moving forward. And I think that is quite critical for us and our investors to understand what that risk profile looks like.
SPEAKER_00Do you think you're gonna get that? Because you know, you hear contrasting rumour that the government might give it, then you hear the next week now they've ruled it out. I mean, what does that look like?
SPEAKER_03I think it depends what you're asking for. I think there's maybe differences and degrees of certainty that people may be seeking. And I think to try and ask for an enduring answer right now is probably a bit much when they're trying to rinse and repeat AR7 in terms of volume and rules. However, I think what people are asking for is can they give people direction in the interim on what they should assume as part of that auction? Um, because at the moment I think you know we're in the guessing game, and you know, some direction within the frame will be far better than that.
SPEAKER_00And it was mentioned on the panel that you know a lot of developers have international investment committees that they have to go back and explain this to, like as an international company, and you mentioned the level of uncertainty that you're facing, the changes to policy and grid and so on and so forth. Yeah, how are you gonna smooth that path with your investment committees with all of this change taking place to assure them to be able to make that decision and get to FID, which is the real signal that the industry's back, right?
SPEAKER_03Yeah, that's true. I think when you look at us as a developer, with having been through this process for Murray and Murray West and our sponsors seeing our ability to enter an auction, be successful, reach financial close and execute a project, I think you know there's a degree of experience and understanding that the UK team here are highly competent in working in this market. I think when you get to the point where we're trying to work with what is quite an uncertain period of time, you know, with what's you know likely to become a positive outcome in the UK market, what we have to do is make sure that we can evidence base the assumptions we're making using our experience, using market intelligence to give them confidence that we've we've done the work to understand the risk and that we've understood what it'll take to make a successful bid for this realm round.
SPEAKER_00And one final thing that didn't come up during the panel was the political situation in the UK. Sure. We're off the back of interesting results in local elections and national uh elections. Do you view that as a concern in your mind going forward around the possible change coming down the track in the attitude towards renewables in politics, or is it much lower down the risk rate?
SPEAKER_03I think when you look at um the politics of the UK, it always has run in five-year cycles, right? There's always a risk of a change in government and a change of perspective. I think it's slightly more acute now because there is a little bit more difference of opinion on the way forward with energy, energy mix, electricity pricing. I think we have to do the analysis. People will ask questions, they'll ask questions whether it's similar to other countries. But I think all in all, when you see the direction in terms of what the UK government is currently doing in terms of CFD rules, I think you know the ingredients are there, the fundamentals are there at the moment. So I think the UK remains quite an attracted market for us.
SPEAKER_00You are listening to the Renews Podcast. For breaking news or to access our exclusive market intelligence on the global renewables sector, subscribe at renews. Now, back to the show. What's your view of that question?
SPEAKER_04Yeah, it's a really interesting question, Stephen, isn't it? Because on the one hand, yep, AR7 was the biggest auction ever, and there's a lot to celebrate about that, you know, uh 8 gigawatts. Um, and also we did see Scottish projects come through, which is it was not something we were absolutely certain of in the run-up to the auction. I think what I would say is that the way I've talked about this is that AR7 was more by chance than design, and despite there having been real changes to some of the auction design to ensure that we got Scottish projects, the characteristics of that auction were not replicable. And the reason why was because we ended up with um a fixed bottom project that only really got through because it's in one of the lowest nuance zones in Scotland, one of the lowest transmission charging zones in Scotland, and beyond that, all of our projects sit with that penalty that they then have to overcome. So I'm delighted, as everyone was with the result for AR7, but I am concerned about what comes comes next for AR8 because of that transmission charging issue.
SPEAKER_00On transmission charges, do you think that we will see a quick fix for AR8? I know Scottish Renewables has obviously suggested a quick fix whereby it would be fixed at the point of bidding. I've heard varying discussions around uh government around what they're thinking about AR8, but the direction of travel appears to be no, we will continue without any change to grid charging. What's the latest on that and what impact will that have on the AR8 Scottish entries, do you think?
SPEAKER_04So obviously in AR7 we had the kind of cleaning price that was separate that actually wasn't triggered. I suspect that that would come into play if anyone feels able to bid. Our key issue at Scottish Renewals that we're talking about is not just the certainty, so the volatility that sits within transmission charging, it's the level as well, which gets worse obviously as you go further north. So we we released some research that said that our projects have faced about £3 billion worth of additional charges since 2015. That's unnecessary, that's unnecessary money within that marketplace at a time when we're trying to drive costs down for consumers. So it doesn't make sense to continue with the regime we've got. Recognise the issue that government is faced with, which is that doing things quickly can be difficult. We're really pleased again that in that conversation with government they've been exceptionally responsive. You know, we saw that with ER7. So continuing that conversation with ER8, but very much focused on that enduring solution. But what we are clear about is that for anything to go into ERE and to be successful for it to get through an investment board, a developer, there is going to have to be some level of certainty applied to that transmission charging issue.
SPEAKER_00And if it isn't applied, could we see are we facing an uncertain IR8, a bit like AR7 for Scottish offshore wind?
SPEAKER_04I certainly feel that that is the case, Shane, for ERA. I think in terms of Scottish offshore wind, the transmission charging is going to be an issue for the near-term projects. I think there will be an enduring solution. I'm very hopeful of an enduring solution that will mean that we can we can get this fixed as we go forward. I think the other thing we need to focus minds on is that cost reduction pathway for floating. So much of the proportion of the Scottish pipeline relies on floating technology, and we really do as an industry need to come together and gather around what does the technology choice look like, what does the supply chain development look like, and how do we manage to create the most efficient possible structures for all of these things in order to make floating offshore wind a commercial reality.
SPEAKER_00To new us will remain a challenge even for floating in the long term. The discussion is that we won't see a long-term enduring regime until 2029 and it'll all be tied up in the strategic energy plan. 2029 is a long time away for near-term projects like West of Orkney and others that have stalls development activity. Are you worried that in the medium term we may see this two-track UK offshore wind market where everything in England and Wales gets away, but Scotland is left out in the cold essentially?
SPEAKER_04There is an advantage geographically to not being in Scotland, and that is a concern, and that's obviously what we're talking to to government about. I think there was recognition, that's what was good about AR7 for me in that conversation with government, was that recognition that there is a differential and it needs to be addressed. Something like West of Orkney, you know, really strong commitment to local content, 60% local content, and government are really heavily intensely focused on that as well. So I think there is scope for that conversation with government, which is I'm hopeful that 2029 is a backstop date, and that is certainly what I'm hearing is that things could happen much more quickly because this is not a new issue. We've had some of the best minds uh you know within OffGen, within Nisso and within Desnes and the industry thinking about this for a long, long period of time. There is the issue with legacy projects, but putting that to one side, I think actually finding a solution, an enduring solution for future projects should actually be something that we can arrive at in relatively good time. But again, coming back to that point about if we want a pipeline of projects that are going to drive local content and drive a supply chain, I think government are very alive to the notion that this at this point in time is going to cost them cost.
SPEAKER_00You think just finally about the politics of renewables? We've just come off obviously a series of elections. What's your view of how it all ended up in Scotland and in England and Wales?
SPEAKER_04So it was it's always going to be a challenge that the politics in election will always deliver you some surprises. It actually didn't in the end up here in Scotland, we pretty much got what we thought we we were gonna get. If you look across the board, and I think this is where you have to be quite um quite analytical about it, if you look across the board in terms of grid infrastructure and in terms of renewables, in terms of local supply chain, there is actually a real alignment because even when you when you get to the party such as reform, we've been very vocal about things like renewables, they absolutely get that energy security is important and they absolutely understand that grid infrastructure is a national asset which can drive economic growth. So I think we have to kind of work to that, play to that strength again, which is to just think about actually where the alignment lies rather than working, working, trying to work around some of the more dividing lines that came put in place.
SPEAKER_02My name is Ewan Walker, I'm project director for the Air Offshore Wind Fund.
SPEAKER_00You and there was a panel this morning on offshore wind that discussed the question whether offshore wind is back after AR seven. We've had contributions to that from near term projects, projects that have CFDs, projects that are looking at AR8. Air is obviously a lot earlier in the development cycle. You look at policy and the big challenges for a project like yours, what are your number one issues and barriers to continuing successful and timely development?
SPEAKER_02I think a really current concern for us is the uncertainty around the SSEP, the Stratudit Spatial Energy Plan. And where floating, so air is a floating watching wind from that's our base case. And how floating will sit within the SSP and the different pathways that are being developed as part of that plan. So yeah, we really don't know how that's going to look. Scottish Government targets have a 40-gigawatt target, and floating is a very significant part of that target. So it's really essential that all of the pathways that are being developed as part of the SSEP factor that in.
SPEAKER_00When you say uncertainty around the SSEP, what do you mean? I mean, we've honestly last year when uh locational zonal pricing was ruled out, this SSEP became you know the master plan for energy and then mapped out a whole delivery plan. Are you concerned about delays or the direction of travel in terms of what's going to be in it?
SPEAKER_02It's more, yeah, it's more around it's the latter, it's the direction of travel and um what is the direction of travel that we're seeing already in it? That's that's the issue we have, we don't really know at the moment. It's really not clear what the view is um with regard to floating. And um yeah, and uh and how much um capacity will be will be um taken you know allowed from the UCFD process, how much budget will be available in upcoming auctions through AR8, 910 and beyond. Um and um yeah, I mean that's that's a big key thing. And there are other issues as well, of course, but it timing is less of a concern, um, but it's more around the budgets, and we have a relatively early grid connection compared with some of the other floating projects in Scotland, so um, this is a really immediate concern for us. We can't just sit there and accept uh you know a much later commitment for floating. We see, I'm not expecting there'll be gigawatts and gigawatts of floating and you know coming through CFT auctions in the next couple of years, but we need to see larger capacity start to come through these options.
SPEAKER_00Strategic uh energy plan, the secondary element to that was to use potentially grid charging as a locational signal instead of zonal pricing. Where on the risk register for a project like Air off the Northeast Coast is grid charging, or do we have more fundamental challenges around technology, consenting, grid connection, and so on?
SPEAKER_02I think grid charges would be higher than all of those that you mentioned. I think with consents, I'm sure we'll get there. Every developer wants our project consented quicker than it is, that's a given. Um yeah, charges are grid charges are huge, Tinois is huge, and we've already seen West of Orkney project very close to ourselves, paused after years of development, huge spend. That project's really ready to go, but it's sitting on ice, which is tragedy, and I really hope that it's resurrected and resurrected soon. But it sounds it sounds like without certain Zovercrit charges that that isn't going to happen. So we really need to get to that place as early as possible.
SPEAKER_00The other area that's quite topical at the moment is a shortage of turbine suppliers given the UK government's decision to essentially bar access to Mingyang. Um it leaves Siemens, Gemisa, and Vestis. Vestis has already said publicly that floating's not quite their bag at the moment. Essentially leaves one option as it stands at the moment, which may well obviously change in the coming years. But how do you view that possible shortage of options on what is ultimately the biggest CapEx item on a project?
SPEAKER_02It's extremely unhelpful to have no competition. Um and that really has to change, is it? You know, we we want to see um floatings that are still at an early stage. There are quite few demo projects out there, but still at an early stage, and we need to drive down those costs in a way which is you know comparable to how we did 10-15 years ago with fixed offshore. Um and not having any competition, like say for key elements of a project, is isn't helpful there. Um I do have some empathy with the turbine OEMs, and um they don't have the confidence that floating is going to be developed at a speed, you know, or to the extent that helps them to justify making the investments they're required to put into these projects. So I can see where they're coming from. So what we really need is UK government to give confidence not just to us developers but to the supply chain. These projects will um be brought forward at scale, and the government is is behind floating.
SPEAKER_00The Renews podcast was produced and edited by me, Stephen Don. Click subscribe wherever you get your podcast to make sure you never miss an episode. For more exclusive market intelligence on the renewable sector, see renews.