Government and business have today published a long-term strategy that will strengthen the UK’s position in the offshore wind industry. The multi-million pound investment has the potential to unlock £7 billion in the economy by 2020.
Investments by the government will include £20 million from the Regional Growth Fund to improve the UK wind industry’s supply chain, and £46 million to join up innovation between industry, government and academia and help companies to bring new products to market.
Deputy Prime Minister Nick Clegg and Energy Secretary Ed Davey launched the strategy today during a visit to officially open the Lincs wind farm off the coast of Lincolnshire, developed by Centrica with their project partners DONG Energy and Siemens.
The UK currently has more offshore wind power than the rest of the world combined. The offshore wind industrial strategy aims to grow UK supply chain manufacturing so that more of the work and jobs can be done here.
The industry has the potential to create 30,000 jobs here and contribute £7 billion to the economy by 2020. Exports have the potential to add even more to these economic benefits.
Key announcements include:
£20 million from the Regional Growth Fund for GROW: Offshore Wind, a new Manufacturing Advisory Service programme to support the UK supply chain to become more competitive by offering tailored support from specialists
£46 million funding over five years for the Offshore Renewable Energy Catapult Centre to join up innovation between industry, government and academia and help companies to bring new products to market
a new Offshore Wind Investment Organisation, established by UKTI, to attract inward investment to the UK
industry-led initiatives to share information with the supply chain about their procurement timelines and contracting decision points
a proposal that would require developers of offshore wind farms above a certain size to produce a supply chain plan before they can apply for a Contract for Difference – long-term contracts to provide stable revenues for investors in low carbon energy projects – setting out how the project and procurement approaches will encourage a wider, more diverse supply chain and support innovation and skills
expansion of the scope of the DECC offshore wind manufacturing funding scheme to support port and coastal infrastructure development in assisted areas of England. Any grants offered will be conditional on sites securing manufacturing investment
the Green Investment Bank has an ambition to invest a significant proportion of its £3.8 billion capital in offshore wind, co-investing in projects with commercial parties
Deputy Prime Minister Nick Clegg said:
The race is now on to lead the world in clean, green energy. As an island nation, and with our weather, the UK is ideally placed to make the most of offshore wind energy - you could say it was a technology designed for us.
This strategy will help keep Britain as the world leader in one of the most important industries of the 21st Century. If we make the most of offshore wind’s potential in the UK, it can provide a big proportion of the energy that lights our homes and powers our economy.
Business Secretary Vince Cable said:
We have more offshore wind power than the rest of the world combined and, if we get it right and strike now, we will also see this new technology creating thousands of jobs here as well.
The key achievement of the strategy is to develop a strong commitment by the industry to develop a UK supply chain together with ambitious plans to deliver it. I would hope to see something approaching the 70 per cent that we already see in the oil and gas sector of supply chain made in Britain.
The commitment and partnership that this strategy represents is an important step in giving the industry more confidence to invest here in Britain; build factories, increase capacity at ports, develop skills and carry out high-end research to tackle the problems posed by the unforgiving offshore environment.
Keith Anderson, CCO of ScottishPower, and co-chair of the Offshore Wind industry council said:
The strategy is a clear signal of what can be achieved in job creation, manufacturing investment and skills development from offshore wind when industry and government work in partnership.
Industry and government now need to work closer than ever before to ensure that the strategy is delivered and the potential for the UK is realised.
Secretary of State for Energy Edward Davey said:
The Offshore Wind Industrial Strategy will attract investment into the UK, support thousands of skilled green jobs whilst providing homes with clean energy.
Offshore wind is already an important contributor to our energy mix, with the amount of electricity we generate from it increasing by 46 per cent last year.
Yet the future opportunity is much greater, so we have provided more certainty to offshore wind investors, setting out the support available under the Renewables Obligation and publishing draft strike prices earlier than expected.
There is now real momentum with offshore wind. Recently, we opened the London Array - the largest operating wind farm in the world and I have just given planning permission to build an even bigger offshore wind farm, Triton Knoll, off the Lincolnshire and Norfolk coast. With this strategy Britain can become the world leader in supplying this growing industry too.
Business and Energy Minister Michael Fallon said:
Step by step we are working with industry to maximise the potential of this important industry. We are determined to make sure that more of the contracts, jobs and economic benefit come to our shores and that we export more to overseas markets.
This strategy is the next step in the government’s industrial strategy programme. So far eleven key sector strategies have been published to secure sustainable future growth in the economy. By working together to create a long term view of the economy, government and business are building confidence to invest, grow and create jobs.
Notes to Editors:
1.The Offshore Wind Industrial Sector Strategy can be viewed here; https://www.gov.uk/government/organisations/department-for-business-innovation-skills/series/industrial-strategy-government-and-industry-in-partnership
2.The government’s economic policy objective is to achieve ‘strong, sustainable and balanced growth that is more evenly shared across the country and between industries’. It set four ambitions in the ‘Plan for Growth’, published at Budget 2011:
- to create the most competitive tax system in the G20
- to make the UK the best place in Europe to start, finance and grow a business
- to encourage investment and exports as a route to a more balanced economy
- to create a more educated workforce that is the most flexible in Europe.
Work is underway across government to achieve these ambitions, including progress on more than 250 measures as part of the Growth Review. Developing an Industrial Strategy gives new impetus to this work by providing businesses, investors and the public with more clarity about the long-term direction in which the government wants the economy to travel.
3.The operations centre for Centrica’s Lincs Windfarm is in the Humber Centre for Offshore Renewable Engineering (CORE). CORE is a partnership between government and six key locations for offshore wind in England to support business growth and showcase opportunities for foreign direct investment for the offshore wind sector. For more information please see: http://www.liverpoollep.org/PDF/CORE%20Brochure-FINAL.pdf
4.30,000 jobs and £7 billion GVA source - BVG Associates estimate. This is based on a scenario of 16GW installed by end March 2020, with 50 per cent UK content in capital expenditure and 85 per cent content in operational expenditure. Derived from Offshore wind cost reduction pathways, technology work stream (The Crown Estate, June 2012), value breakdown for the offshore wind sector (report commissioned by the Renewables Advisory Board, RAB (2010) 0365), and Macroeconomics benefits of investment in offshore wind (Cebr report, June 2012).