GovWire

Administrative timetable

Final report

23 May 2024: The SAU has published its report providing advice to DESNZ concerning its proposed subsidy to Green Volt Floating Offshore Wind Farm Limited in the form of an offshore electricity supply licence exemption. The report sets out the SAUs evaluation of DESNZs Assessment of Compliance of its proposed subsidy with the requirements set out in the Subsidy Control Act 2022.

• Final Report (23.5.24)

Request from DESNZ

11 April 2024: The SAU has accepted a request for a report from DESNZ concerning its proposed Subsidy. This request relates to a Subsidy of Particular Interest.

The SAU will prepare a report, which will provide an evaluation of DESNZs assessment of whether the scheme complies with the subsidy control requirements (Assessment of Compliance). The SAU will complete its report within 30 working days.

Information about the subsidy provided by DESNZ

DESNZ is proposing to award a subsidy to Green Volt Floating Offshore Wind Farm Limited. The subsidy relates to an exemption from the requirement to hold an electricity supply licence and aims to reduce greenhouse gas emissions from offshore installations (oil and gas platforms) by enabling the direct supply of electricity from a sustainable source of generation.

The Electricity Act 1989 requires suppliers of electricity to hold a supply licence. Licences impose costs and obligations on licence holders. The proposed exemption from this requirement would remove a disproportionate regulatory burden from Green Volt Floating Offshore Wind Farm Limited. The exemption would also remove a disincentive to the use of renewable generation by offshore installations. It would make costs more comparable to existing sources of fossil-fuelled power and therefore enable the wind farm to offer a viable alternative power source.

The exemption relates to a wind farm that is intended to be located 80km off the coast of Aberdeenshire. Under the proposals, the wind farm is expected to supply electricity to up to four offshore installations to replace the output of onboard fossil fuel-powered generators. Additional output from the wind farm will be transmitted to the onshore electricity network and will be subject to the relevant licensing costs and fees under the Electricity Act 1989. DESNZ consulted on the proposed exemption in January to February 2024.

The total subsidy amount will depend on a number of variables including the power requirements and lifetimes of the offshore installations as well as the amount of power generated by the wind farm. Having regard to those factors, the value of the subsidy is estimated to be between 100 million and 550 million, with the theoretical maximum determined by the legal boundaries of the subsidy at 2bn, and on that basis the subsidy is considered to constitute a Subsidy of Particular Interest.

Since the subsidy created by the exemption is the foregoing of licence costs which would otherwise fall due from Green Volt Floating Offshore Wind Farm Limited, no funding will be provided directly to the wind farm. The subsidy relates solely to the supply of electricity to these offshore installations and does not affect any planning and consenting process with which the wind farm must comply.

Information for third parties

If you wish to comment on matters relevant to the SAUs evaluation of the Assessment of Compliance concerning DESNZs proposed Scheme, please send your comments before 5pm on the date stipulated in the timetable above. For guidance on representations relevant to the Assessment of Compliance, see the section on reporting period and transparency in the Operation of the subsidy control functions of the Subsidy Advice Unit.

Please send your submissions to us at SAU-OffshoreLicenceExemption2024@cma.gov.uk copying the public authority at oslexemptionapplications@energysecurity.gov.uk

Please also provide a contact address and explain in what capacity you are making the submission (for example, as an individual or a representative of a business or organisation).

Notes to third parties wishing to make a submission.

The SAU will only take your submission into account if it can be shared with DESNZ. The SAU will send a copy of your submission to DESNZ together with its report. This is to allow the public authority to take account of the submission in its decision as to whether to grant or modify the subsidy or its assessment. We therefore ask that you provide express consent for your full and unredacted submission to be shared. We also encourage you to share your submission directly with DESNZ using the email address provided above.

The SAU may use the information you provide in its published report. Therefore, you should indicate in your submission whether any specified parts of it are commercially confidential. If the SAU wishes to refer in its published report to material identified as confidential, it will contact you in advance.

For further details on confidentiality of third party submissions, see identifying confidential information in the Operation of the subsidy control functions of the Subsidy Advice Unit.

Contacts

• CMA press team: 020 3738 6460 or press@cma.gov.uk