The offshore wind industry could be worth as much as £2.9 billion to the UK economy by 2030, according to a Glasgow-based quango.
The report by the Offshore Renewable Energy Catapult (OREC) shows that the UK economy is already reaping the rewards of a maturing offshore wind sector.
And the latest figures suggest that continued cost reduction – resulting in lower subsidies from British taxpayers – coupled with increasing amounts of UK-content 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 content.
- But industry is already doing better than this, and each additional 10% of UK content 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 content).
- The 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 content, this would represent an estimated £1.7bn per GW net benefit for the winning bid.
An OREC spokesman said: “The offshore wind-ustry is already a UK success story, but with continued investment and support the industry is capable of delivering so much more.
“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.”
Meanwhile, OREC has also published its first annual results of its UK offshore wind farm performance review, which show that:
- Newer wind farms, further from shore, tend to have lower availability but higher capacity factors due to higher wind speeds and more modern turbines. As these new and larger wind farms mature, availability is expected to increase, leading to higher productivity levels.
- In the summer months, areas with higher wind speeds give higher capacity factors, but this trend is reversed during autumn/winter as adverse weather conditions can mean more non-access days which will impact on a wind farm’s performance.
- One of the primary drivers of non-access days is wave height, which creates opportunities for innovation in the next generation of crew transfer vessels.
Adrian Fox, Chairman of the performance review steering group, said: “This report demonstrates how crucial industry collaboration and benchmarking is in continuing to drive down costs and increase production from offshore wind farms.”