As the UK on Monday launched its biggest renewable scheme – Contracts for Difference (CfD) scheme – aimed at encouraging offshore wind investments, offshore workers’ union RMT has called for a stronger link between offshore wind projects and local jobs and businesses.
The Contracts for Difference (CfD) scheme is the UK Government’s method of encouraging investment in low-carbon electricity.
Renewables energy firms apply for a CfD by submitting what is a form of ‘sealed bid’ and if successful, they then enter a private law contract with the Low Carbon Contracts Company (LCCC), a government-owned company.
Under the CfD scheme, developers are paid a flat (indexed) rate for the electricity they produce over a 15-year period; the difference between the ‘strike price’ (a price for electricity reflecting the cost of investing in a particular low carbon technology) and the ‘reference price’ (a measure of the average market price for electricity in the GB market).
According to the government, the scheme incentivizes investment in renewable energy by providing developers of projects with high upfront costs and long lifetimes with protection from volatile wholesale prices, which, in turn, “ensures consumers don’t pay increased costs when electricity prices are high.”
The latest round, the UK’s fourth, aims to double renewable electricity capacity secured compared to the third round, when the country allocated 5.8 gigawatts (GW), and to secure more new capacity than the previous three rounds combined, Reuters reported, citing the UK Government.
The latest round will provide 200 million pounds ($277 million) to support offshore wind projects and ensure Britain hits a target of 40 GW of installed capacity by 2030, up from 10.4 GW at present, Reuters further said.
Call for Stronger Link between Offshore Wind Projects and Jobs
Commenting Monday, RMT union’s General Secretary Mick Lynch said: “This will seal the deal for another generation of offshore wind farms across the North Sea.
“The developers who get these contracts must produce Supply Chain Plans that benefit UK workers and businesses in every part of the supply chain – labor costs must not be hacked back to pay private dividends off the back of workers’ terms and conditions.”
“The climate and our communities cannot take many more investment failures such as CS Wind. We must also see these contracts used to tackle minimum wage evasion, excessive hours, and other unacceptable employment practices affecting seafarers in the maritime supply chain all of which could be avoided by recognizing trade unions,” he said.
The UK unions earlier this month criticized the South Korean owners of the CS Wind factory based in Machrihanish as the company entered into administration. According to Unite, a big UK workers’ union, the factory which employed approximately 130 people was the only UK facility manufacturing onshore and offshore wind towers. It was purchased by the South Korean company in April 2016.
RMT’s Lynch also said: “Industry has forecast an increase of over 160% in jobs in offshore wind by 2026. Loopholes around employment, re-training, immigration, and safety must be closed if those green jobs are to go to workers in North East Scotland and elsewhere in the years and decades ahead.
“The fanfare around CfD must not distract politicians, environmentalists or the labor movement from the need for stronger links between these public offshore wind projects and good quality UK jobs, green energy, skills, and tax revenue.”
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