It’s sad to say, but the UK’s ambitious plans to decarbonise its energy output by 2030 are looking more unlikely than ever. Despite bold targets and public commitments, major clean energy projects are stalling or being abandoned entirely. The country aimed to deliver 43GW of offshore wind by the end of the decade and ramp up hydrogen production as a key part of its net zero strategy. However, rising costs, long planning delays and weak investment signals are now putting these goals in peril. In this article, we’ll examine these setbacks in more detail.
Offshore wind setbacks
According to the energy research group BNEF, the UK is likely to deliver only 33GW of offshore wind by 2030, 10 gigawatts short of the target. Projects are being delayed or scrapped due to high financing costs, inflation and supply chain bottlenecks. There are also too few vessels available to build the infrastructure needed.
The collapse of Orsted’s Hornsea 4 project has been a major blow. The wind farm, expected to power more than a million homes, had secured a government contract at a fixed price of £58.87 per megawatt hour. But unfortunately, Orsted said the sums no longer add up. Costs have continued to rise, interest rates are higher, and the risks of construction and operation have increased. As a result, the company has halted further spending and terminated its supply chain contracts, taking a hit of around £510 million this year.
The Hornsea 4 project had secured planning consent, grid connection and seabed rights. But even those advantages weren’t enough to keep it going. The project accounted for more than half of the fixed-bottom offshore wind capacity awarded in last year’s clean power auction. Its cancellation leaves a significant gap in the delivery plan.
SSE has also slowed investment in Berwick Bank, a project in Scotland that could become the world’s largest offshore wind farm. SSE’s Chief Executive complained that the project has been stuck in the government’s planning system for three years. SSE has also held back funding from Arklow Bank, another large-scale wind farm in the Irish Sea.
While 16.6GW of offshore wind is still in the planning pipeline, BNEF warns that only a fraction will move forward under current market conditions. Delays and cancellations are becoming increasingly likely unless issues related to pricing and planning are resolved.
Hydrogen hopes fading
The government’s plans for hydrogen are also facing problems. BP’s H2Teesside project, announced in 2021, was designed to produce blue hydrogen from natural gas while capturing carbon emissions. It was expected to supply more than 10% of the UK’s 2030 hydrogen target.
This plan is now at risk. Sources say BP may cancel or significantly reduce the project, as it has failed to attract enough customers to justify the investment. The company is in discussions with the government about additional financial support, but the future of the initiative is unclear.
Ed Miliband’s department sees H2Teesside as a key part of the national hydrogen strategy. Local leaders have voiced frustration over the uncertainty. The Mayor of Tees Valley has called for urgent talks with BP and criticised the company for seeking more government subsidies without a clear investment plan. He also noted that other investors are showing interest in the site and that alternative options are being explored.
Investment warning signs
Developers say the current market model is no longer working. Orsted’s withdrawal from Hornsea 4 came less than a year after it was awarded a contract. With strike prices now too low to cover rising costs, the industry is warning that future auctions must reflect the reality of inflation and supply chain pressures.
The upcoming round of Contracts for Difference (AR7) is now critical. If it fails to deliver enough viable projects, the government will fall further behind on its 2030 clean power goal. Some experts argue that auctions should be opened up to projects that do not yet have full planning consent in order to increase the volume of bids.
A looming decision on zonal pricing has added more uncertainty. This proposal would set different electricity prices depending on location, a move that most renewable developers oppose. They argue it would make projects harder to finance and add unnecessary complexity. Government officials are reportedly struggling to explain the policy’s details to ministers, and there are signs a weak compromise may be emerging.
Industry leaders have called for immediate clarity. Developers want to know what to expect from future auctions, how market rules will change, and whether stalled projects like Hornsea 4 will be allowed to return next year. Without those assurances, investor confidence will continue to erode.
Time for action
The UK’s 2030 energy targets remain achievable, but the window is closing. With time running out and projects falling by the wayside, the government must act quickly. Faster planning, updated contracts, and a clear industrial strategy are essential. Without them, the transition to clean energy will stall and the country’s climate commitments will slip further out of reach.