UK seeks views on OFW subsidies

The UK's Department for Energy Security and Net Zero (DESNZ) has launched consultations on a proposed "Clean Industry Bonus (CIB)" to upcoming Contract for Difference (CfD) schemes.

The CIB process will be run as a competitive allocation for extra revenue support before the main CfD Allocation Round 7 (AR7) auction.

Under this scheme, fixed and floating offshore wind developers could get extra support if they choose to invest in more sustainable supply chains.

The CIB makes extra CfD funding available if a developer chooses to make investments above the minimum standard that meet the sustainability criteria.

Eligible generators must hold a CIB statement in order to be eligible to enter the AR7 auctions. 

In order to obtain a CIB statement from DESNZ, developers will need to invest a minimum of:

• fixed bottom offshore – £100 million (€121m $128m) per GW across all CIB proposals
• floating offshore – £50 million per GW across all CIB proposals

DESNZ has not set a total budget for the CIBs. The total figure will be based on the capacity of offshore wind projects that enter the allocation round.

The initial budget for the scheme will be around £27 million per GW of capacity that applies for the bonus under AR7.

These investments could be in facilities or firms manufacturing, assembling or installing:

• ports
• blades
• nacelles
• towers
• foundations (which can include transition pieces and foundation secondary structures)
• export cables
• array/inter-array cables (including dynamic cables)
• electrical infrastructure (includes all aspects of OFTO/network)
• structural infrastructure
• onshore infrastructure (includes all aspects of OFTO/network)
• turbine installation (includes assembly and laydown areas)
• foundation installation (includes assembly and laydown areas)
• electrical / cable installation (export, inter-array and onshore installation) (Includes assembly and laydown areas)
• vessels (manufacturing or upgrading in a yard)
• mooring and anchoring systems
• floating substructures, including but not exhaustively, fabrication, assembly, primary input materials, secondary steel, concrete aggregates and concrete batching plants.
• floating assembly and marshalling facilities

Any investments submitted as part of the CIB proposal must have been made after 13 March 2024, and before the expected start date of the CfD.

The CIB application window is currently scheduled to open in February 2025.

A portion of the budget will be ring-fenced for floating offshore wind proposals

Consultations on the CIB scheme closes on 10 December 2024.