The UK’s offshore wind sector is racing ahead. With the offshore wind market rapidly expanding, the demand for equipment and services to support its growth is sure to rise with it. The UK is the leader in offshore wind production as well as having an established track record in exporting physical manufactured products.
Is there a golden opportunity to be the world’s supplier of choice?
This will depend on its ability to invest in its workforce and innovation, and on the extent to which the industry can pursue a culture of collaboration. These factors will be vital if UK firms are to support and make the best of local workforces and their supply chains around the world.
A strong position
Thanks to its North Sea heritage, the UK already has a globally-renowned manufacturing and knowledge base for the offshore energy industry.
The oil and gas sector has long had a wealth of exceptional engineering talent, with extensive experience in and understanding of offshore projects. Alongside this comes a manufacturing capability and infrastructure, geared towards the offshore sector.
This was useful when manufacturing new technology, and many technologies were actually translatable into the new sector. For example, at JDR we first entered the offshore wind market by working on the 2005 Beatrice demonstrator project. We used existing technology to supply the array cables for the project, which connected two wind turbines back to the Beatrice oil platform. The technology, expertise, factory and supply chain were all already in place.
The UK also enjoys a unique geographic advantage. As an island nation with a shallow continental shelf that extends far offshore, and some of the windiest conditions in Europe, it’s extremely beneficial to use fixed-base offshore wind turbines.
Coupled with the historically robust subsidy support for the sector deployed by the UK Government, the UK seized the opportunity to take the lead on offshore wind.
Sustain and accelerate
However, this position of strength isn’t without threats, especially with the uncertainty surrounding Brexit trade negotiations, which could make exporting to the EU more difficult for UK industry. That said, I’m confident Europe will want to continue trading with the UK.
Until now, the UK approach to subsidising renewable energy has been incredibly successful for offshore wind. In 2014, the first contract for difference (CfD) round saw 15 year CfDs awarded for £140-150/MWh, for five wind farms. In 2017, there were two successful bids at £57.50, meaning the cost of the technology has fallen so far that offshore wind is close to the point of competing without subsidy.
However, we still have £557m of CfDs to be allocated to renewables through to 2020. In the Autumn Budget, the Chancellor revealed that there would be no new money after this until at least 2025 and the impact of subsidies on energy bills had been reduced. With near future offshore projects in Europe likely to be subsidy free, we can expect these changes to have an impact on the developers and the supply-chains that support them.
Finally, we can foresee an emerging skills gap in the UK as with the rest of the rapidly growing global offshore renewables sector. In the offshore wind sector alone, studies have shown our current workforce is expected to double over the coming decade. We need to increase the level of our STEM educated workforce and encourage more people to consider careers in offshore energy.