The UK’s offshore wind industry could be worth as much as £2.9 billion to the British economy by 2030, a new report has claimed.
The report on the economic value of offshore wind, which has been published by the Offshore Renewable Energy (ORE) Catapult claimed offshore wind is now cost-benefit neutral with a strike price of £105 and 30 per cent UK-manufactured content.
But the report also said the sector is doing better than this, as an additional 10 per cent of UK content is worth between £500 million and £600 million, depending on strike price.
According to the ORE Catapult, each £10 strike price reduction is worth £240 million and £350 million, depending on the level of UK content.
The gross value added (GVA) to the UK per GW of offshore wind installed, given current UK content, is £1.8 billion and is predicted to increase to £2.9 billion by 2030.
Chief executive of the ORE Catapult, Andrew Jamieson, said the report shows the British offshore wind industry is “already a UK success story”
“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,” added Jamieson.
“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.”
The report on the economic benefits was also launched on the same day that the world’s first benchmarking platform for offshore windfarms, Sparta (System Performance, Availability and Reliability Trend Analysis), published its review of British offshore wind.
The review found newer windfarms, which are further from shore, tend to have lower availability and higher capacity factors, due to higher wind speeds and more modern turbines.
As these new and larger windfarms mature, availability is expected to increase, leading to higher productivity levels.
The chief executive of RenewableUK, Hugh McNeal, said offshore wind developers now have to demonstrate they are sourcing an increasing proportion of their content from UK suppliers, in order to win contracts for financial support from the Government.
“This has enabled investment across the UK supply chain, from Hull to East Anglia and the Isle of Wight.
“Government and industry have agreed a methodology to provide a comprehensive analysis of UK content, which will be released in June. We are confident that this will show significant progress towards 50 per cent UK offshore wind content,” added McNeal.