Did you know that the UK has more offshore wind turbines than the rest of the world put together? Not only is this great news in helping us to meet our ambitious targets to reduce carbon emissions, it’s also creating thousands of jobs and bringing billions of pounds of investment into the UK.
If we get it right, this industry has the potential to be an area of real competitive advantage for the UK in the global economy, as well as supplying clean energy. This is why Government is working closely with industry, through the UK Offshore Wind Industrial Strategy, to build a competitive and innovative UK supply chain that can deliver economic growth and jobs.
Key to the success of the Government approach has been a joined-up, ONE Team outlook – we have created a cross-government Offshore Wind Organisation, bringing together people from DECC, BIS, the overseas embassy network and our customer-facing team at UKTI, all working closely together to provide a clear, coherent support package for companies.
And this approach is proving successful.
Since 2008 the UK has been the world leader in offshore wind. However, the majority of offshore wind manufacturing has, in the past, been supplied from overseas (largely Denmark and Germany); independent analysis in March 2014 estimated the UK content average in our offshore wind farms by capital expenditure at just 19%.
Over the past year real progress has been made to turn this around. The UK’s strong project pipeline, the certainty provided under the new Contract for Difference regime, and the Government resources and collaborative approach dedicated to boosting the UK’s supply chain have delivered results: the last 12 months has seen £400m investment committed into the offshore wind supply chain, which will deliver 1700 direct factory jobs and stimulate many more in the supply chain. The UK has also made significant steps to enhance its manufacturing capability and capacity.
What’s more, this investment and job creation is spread across the UK – Teesside, Rosyth, Isle of Wight, Hull, Grimsby, Warrington, Barrow-in-Furness to name a few locations – providing a real boost to regions across the whole of the United Kingdom.
Government’s dedicated support for UK suppliers assisted £90m worth of exports from local offshore wind companies in 2014/15 – that’s up from just £1m in 2013/14.
These successes have boosted UK capability in priority subsectors of blades, foundations, substations and cables manufacturing, increasing the opportunity for future offshore wind projects to source competitively and locally.
The growing strength of the sector is also bringing down costs even faster than anticipated, with industry ahead of target to deliver a reduction in cost to £100/MWh for projects reaching final investment decisions in 2020. The Offshore Renewable Energy Catapult centre, launched to support innovation, will help with this progress and ensure UK offshore wind is at the cutting edge of the sector. This will enable offshore wind to compete with traditional energy sources such as oil and gas – good for the environment and good for the UK economy, as we develop our exports in this market.
The UK offshore wind pipeline has attracted over £3bn in capital investment from around the world over the past financial year. This has been a collaborative effort – close working between UKTI, BIS, DECC, the global embassies network and industry, ensuring we take full advantage of the skills, experience and opportunities here in the UK to generate increased investment, exports and jobs.