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Offshore windfarms given further incentives to invest

Commenting on the implications of the UK government’s extension of double-ROC eligibility for offshore wind projects to 2014, David Donnelly, a director specialising in renewable energy at international accountancy firm Mazars said:

“The extension to the “double ROCs” (Renewable Obligation Certificates) eligibility period to March 2014 will give utilities much needed investment certainty to continue to take on the substantial risks of developing large-scale offshore wind farms.

These measures for supporting offshore wind, as well as those announced for carbon capture and storage demonstration projects, will be recouped by utilities entirely through UK consumers’ and businesses’ energy bills, and not their tax bills.

To earn “double ROCs” – worth around 7.5p per unit on top of the market electricity price – the date by which offshore wind farms must start producing is extended from to March 2014. Depending on future market electricity prices, the cash payback period should be around 7-10 years, well short of the wind turbines’ 20 year expected lives. For those projects which succeed in controlling the construction costs and risk inherent in large offshore engineering, this additional support should help these become very attractive investments for the project developers.”

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