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Dong looking at UK 'afresh' after policy announcements

UK: Dong Energy has told a parliamentary committee it is looking at the UK market "afresh", following policy changes affecting wind in the last six months.

Dong's Danielle Lane giving evidence to the UK parliament's energy and climate change select committee
Dong's Danielle Lane giving evidence to the UK parliament's energy and climate change select committee

Dong UK's head of regulatory and stakeholder relations, Danielle Lane, told the energy and climate change select committee that changes by the new Conservative government in the UK caused "nervousness" within the offshore sector.

Since being elected in May, the UK government has announced a series of changes that have damaged the renewable energy sector's attractiveness. This included the closure of the renewables obligation support in April 2016, a year earlier than expected.

Changes to the country's support for solar, the feed-in tariff for small-scale renewable energy projects and alterations to the climate change levy have also been announced.

The policy changes led to the UK dropping out of the top 10 for the first time in Ernst & Young's renewable energy country attractiveness index.

However, in November, energy minister Amber Rudd indicated there would be three further contracts for difference (CfD) auctions in the next five years to facilitate growth in offshore wind – as long as the industry can meet cost reduction targets.

CfDs are the replacement support system in the UK, moving the market to an auction-based mechanism in a bid to push down prices.

The announcement was made as part of Rudd's "policy reset" speech, which came after months of uncertainty in the UK's renewable energy sector.

"It was very helpful we had some clarity in the 'reset' announcement, but we're now looking for detail," Lane told the committee.

"This government did very well saying what it didn't want, but quite a long period before it said what it did want [in the policy reset announcement]," Lane said, adding the sector does not like "vacuums". She also warned the UK would face competition from other markets.

"We knew things like onshore wind were less attractive to a Conservative government.

"[But, RO] announcements came very quickly and without forewarning. It does create nervousness in other areas. There were a lot of questions from the headquarters in Denmark about what it meant for offshore.

"We're certainly looking at the UK afresh. We've got a secure pipeline until Hornsea 1, but we're looking hard at how we take future projects forward," said Lane.

Lane said Dong had a clear UK pipeline up to its 1.2GW Hornsea 1 project due online in 2020. The developer is currently building the 256MW Burbo Bank Extension and the 580MW Race Bank site in UK waters. It has also given the go-ahead for the 649MW Walney Extension in the Irish Sea.

Lane was joined by members from the natural gas and nuclear sectors in giving evidence to the committee about the UK's investment attractiveness.

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