Nearly half of offshore wind contracts are awarded to UK firms
New data from RenewableUK reveals 48 per cent of spending on planning, building, and running offshore wind projects goes to UK companies
British companies are playing a major role in the UK’s offshore wind farm supply chain, according to new data released this morning that underscores the growing importance of clean energy to the UK’s manufacturing sector.
Data released today by trade body RenewableUK reveals British companies have secured 48 per cent of the planning, building, and operational expenditure associated with offshore wind projects in UK waters.
The performance puts the industry just two per cent short of its long-term target to source 50 per cent of its supply chain in Britain by 2020.
It also marks a significant uptick in British firms’ market share compared to the last analysis in 2015, when 43 per cent of contracts surveyed were awarded to British companies.
The report was compiled by RenewableUK on behalf of the Offshore Wind Programme Board that represents The Crown Estate, the Department of Business, Energy and Industrial Strategy (BEIS), and the Department of International Trade.
Minister for Energy and Industry, Richard Harrington MP, welcomed the news. “The offshore wind industry is growing at a rapid pace, with £11.5bn of investment in new UK offshore wind farms due to take place over the next four years,” he said in a statement. “This report demonstrates the strength of this growing sector and the positive impact it is having on the UK supply chain. We will continue to support offshore wind developments through our Industrial Strategy, helping to reduce carbon emissions while growing the economy.”
The UK is already the world’s leading market for offshore wind, with more installed capacity than any other nation. Yet the sector has faced criticism from some quarter in the past over a supply chain dominated by large contracts with overseas suppliers.
However, recent investment in the British supply chain seems to be significantly shifting this picture now in favour of UK-based firms and factories, with new facilities such as the £301m Siemens blade factory in Hull helping to keep manufacturing on home soil.
UK suppliers are also dominating the development phase of new projects, with 73 per cent of work going to British firms as UK-based consultancies and advisors securing much of the licensing, planning and surveying work involved with preparing major offshore projects.
The report comes as the industry awaits Monday’s expected announcement of the results of the latest offshore wind auction, under which the government will award around 2GW of contracts to new offshore projects. Industry insiders expect the strike prices for new projects to be well below the levels achieved at the previous auction in 2015, when the average strike price agreed was £117 per MWh.
Industry insiders are expecting the sector to smash its goal to deliver power at below £100/MWh by 2020, as a raft of cost reduction efforts start to yield dividends for developers.
In related news, the UK’s onshore wind sector also received a boost this week after the GFG Alliance, a London-headquartered international group of businesses owned by the Gupta family, announced plans to develop a 54-turbine wind farm in the Scottish Highlands.
The proposed 178MW, £170m Glenshero farm will be used to help power GFG Alliance’s aluminium smelter and planned Fort William alloy wheels factory, as well as steel mills in Lanarkshire, under the Alliance’s GREENSTEEL strategy that aims to promote low-carbon manufacturing in the UK.
Chief investment officer Jay Hambro stressed the supply chain for the development would be rooted in UK industry.
“Glenshero is a unique project in our portfolio,” he said in a statement. “It would be built in an environment of zero subsidies, using steel rolled and finished in Scotland and then generate clean energy to support the Scottish metals industry.”
GFG Alliance also floated the possibility of using the land surrounding its existing Fort William smelter and hydro power stations to develop several further small-scale hydro generators.
The plan appears to represent a further boost to those developers who hope new onshore wind farms could be developed without additional subsidy support if they can secure supply agreements with large power consumers.