The offshore wind industry could be worth as much as £2.9bn to the UK economy by 2030, according to a new report published by the Offshore Renewable Energy (ORE) Catapult.
The economic Value of Offshore Wind: Benefits to the UK of Supporting the Industry shows that the latest figures suggest that continued cost reduction – resulting in lower levels of subsidy being required – coupled with increasing amounts of UK input 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% UK input to the supply chain. But industry is already doing better than this, and each additional 10% of UK input 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 input).
- The gross value added (GVA) to the UK per GW installed, given current UK content (input) is 32%, is £1.8bn and is estimated to increase to £2.9bn by 2030 – if a projection of 65% UK content can be achieved
- If the next UK auction round achieved a strike price of £90 and 50% UK input, 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, Chief Executive of ORE Catapult, said: “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.”
ORE Catapult was established in 2013 by the UK Government and is one of a network of Catapults 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.