An auction for billions of pounds worth of offshore wind farm subsidy contracts has been delayed until next year.
The previous energy secretary, Amber Rudd, had said she intended to hold the auction before the end of 2016 but this will not happen now until early 2017, people close to the process have told the Financial Times.
The delay follows the decision by Theresa May to abolish the energy department and fold it into a new Business Energy and Industrial Strategy department after she became prime minister following the Brexit vote.
This bureaucratic reshuffling, combined with the August summer holiday break, was causing the delay, said one person with knowledge of the auction timetable, rather than any change of renewable energy policy under the new government.
The move comes just weeks after the energy industry was jolted by the government’s unexpected decision to review the £18bn Hinkley Point nuclear power plant hours after EDF, the project’s French developer, gave it the go-ahead.
Gordon Edge, for economics and regulation policy director at the wind industry trade body, RenewableUK, said news of the delay in the auction for subsidy contracts was not a concern at present. “Nobody is panicking,” he said. “We feel pretty confident about government support. A bit of a delay is not terrible but obviously we don’t want it to drag on.”
The delay means there will be a gap of about two years since the last competitive auction for the subsidy contracts needed to underpin financially the giant offshore wind farms that dot the coasts of the UK.
The auctions replace an older system in which renewable energy companies received a set level of subsidies for building approved projects.
Now, companies must bid against each other in a type of reverse auction, with the cheapest proposed project winning contracts that guarantee a price for the electricity generated.
Companies such as Denmark’s Dong Energy, developer of the world’s largest offshore wind farm, have been expected to bid in the new auction, which is also likely to be open to some other renewable energy technologies, such as wave and tidal power.