Offshore wind to be worth £2.9b to UK economy by 2030

By Grimsby Telegraph | Posted: 28 Mar 2017

THE huge economic benefits of a strong UK offshore wind industry could be worth as much as £2.9billion to the UK economy by 2030, with the Humber playing a leading role.

A new report has been published today by the Offshore Renewable Energy Catapult, highlighting the importance of the sector.  

Entitled The Economic Value of Offshore Wind: Benefits to the UK of Supporting the Industry, it shows that the UK economy is already reaping the rewards of a maturing offshore wind sector. But latest figures suggest that continued cost reduction - resulting in lower levels of public financial support being required - coupled with increasing amounts of UK content in projects being commissioned and developed, will result in a significant increase in the economic return for the UK.

The key findings from the report are:

  • Supporting UK offshore wind is cost-benefit neutral with a strike price of £105 and 30 per cent UK content. But industry is already doing better than this, and each additional 10 per cent of UK content is worth a net £500m – £600m (depending on strike price), and each £10 strike price reduction is worth £240m – £350m (depending on the level of UK content).
  • The GVA to the UK per GW installed, given current UK content (input) is 32 per cent, is £1.8bn and is estimated to increase to £2.9bn by 2030 – if a projection of 65 per cent UK content can be achieved
  • If the next UK auction round achieved a strike price of £90 and 50 per cent UK content, this would represent an estimated £1.7bn per GW net benefit for the winning bid.
  • Continued public support for, and investment in, the UK offshore wind industry will create a virtuous circle of cost reduction and economic growth.  

Andrew Jamieson, pictured, chief executive of ORE Catapult, said: “Our latest report highlights that offshore wind is already a UK success story, but with continued investment and support the industry is capable of delivering so much more. Continued cost reduction and increasing amounts of UK content will significantly increase the economic value of new offshore wind projects, which forms the basis of a compelling sector deal in line with the UK’s current direction for industrial strategy, with industry and Government working together to maximise UK growth and job opportunities and continue the cost reduction journey.

“In addition, continuing technological innovation in key supply chain areas such as offshore wind turbine blades and foundations, and developing skills in, for example, offshore operations and maintenance, also bolsters the UK economy through the potential export of skills, products and services to the global marketplace.” 

Grimsby has established itself as the leading east coast hub for offshore wind operations and maintenance, with five wind farms now controlled from the port, and more coming.

Hull's Siemens blade plant is now in production, with the Green Port Hull allied assembly site already operational for Dudgeon offshore wind farm off the north Norfolk coast, with first load outs completed. Race Bank, to be controlled from Grimsby, and where the offshore construction has been co-ordinated from, will follow this summer. 

Mark O'Reilly, chief executive of Team Humber Marine Alliance, said: "This is another positive message coming out of the industry. We always said it would be 'slowly, slowly' in the UK, and the local content is going to increase. We still have some way to go on that but increasingly, as infrastructure is based in the UK, then UK content will start to rise. 

"The blade plant is a big start, and we are already seeing the benefits from that in terms of pre-assembly work, the shipments and handling of components, which is quite a big thing. Vessels are now coming in on a regular basis and we have local companies getting contracts to work on that. I think the number of jobs will raise significantly as we are starting to see some people winning contracts, which is great.

"We would like to see some more significant investment, and of course there has been significant spend on operations and maintenance. The additional facilities for Dong will be quite a statement on Royal Dock."  

He is preparing to host Offshore Wind Connections, the regional conference, at Bridlington Spa on May 3 and May 4. 

The report can be downloaded by registering with Offshore Renewable Energy Catapult here. Established in 2013 by the UK Government, ORE Catapult is one of a network set up by Innovate UK in high growth industries. It is the UK’s flagship technology innovation and research centre for offshore wind, wave and tidal energy and helps to reduce the cost of offshore renewable energy, supporting the growth of the industry and creating UK benefit. 

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