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Green power surge and £2.6Bn export opportunity to flow from offshore wind Sector Deal

Thu 07 Mar 2019 by David Foxwell

Green power surge and £2.6Bn export opportunity to flow from offshore wind Sector Deal
Energy and Clean Growth Minister Claire Perry said the Sector Deal will drive a surge in offshore wind, bring investment to coastal communities and ensure that the UK maintains its position as the global leader”

Electricity generation from offshore wind will increase fourfold as a long-awaited Sector Deal is announced and the government aims to make the UK a global leader in renewables.

Clean, green offshore wind is set to power more than 30% of British electricity by 2030, Energy and Clean Growth Minister Claire Perry announced today with the launch of the new joint government-industry offshore wind Sector Deal.  

The deal will mean for the first time in UK history there will be more electricity from renewables than fossil fuels, with 70% of British electricity predicted to be from low carbon sources by 2030.  

This the 10th sector deal from the Industrial Strategy signed by Business Secretary Greg Clark. It is backed by UK renewables companies and marks a revolution in the offshore wind industry, which 20 years ago was only in its infancy. As already highlighted by OWJ, it could see the number of jobs triple to 27,000 by 2030.  

The deal will also increase the sector target for the amount of UK content in homegrown offshore wind projects to 60%, making sure the £557M (US$733M) pledged by the government in July 2018 for further clean power auctions over the next 10 years will directly benefit local communities.

The deal will also spearhead a new £250M (US$329M) Offshore Wind Growth Partnership to make sure UK companies in areas like the northeast, East Anglia, Humber and the Solent and continue to be competitive and are leaders internationally in the next generation of offshore wind innovations. These include robotics, advanced manufacturing, new materials, floating wind and larger turbines. It also aims to boost global exports to areas like Europe, Japan, South Korea, Taiwan and the US fivefold to £2.6Bn (US$3.4Bn) per year by 2030, through partnerships with the Department of Trade and Industry to support smaller supply chain companies to export for the first time. The world market for offshore wind is predicted to grow by 17% each year up to 2030, from 22 GW in 2018 to 154 GW installed by 2030. The government said the Sector Deal will reduce the cost of projects in the 2020s and overall system costs, so projects commissioning in 2030 will cost consumers less as the industry moves towards a subsidy-free world.

To facilitate the buildout of more offshore wind capacity, the Crown Estate will release new seabed land from 2019 for new offshore wind developments. The government will also provide more than £4M (US$5M) for British business to share expertise globally and open new markets for UK industry through a technical assistance programme to help other countries abandon dirty coal power and develop their own offshore wind projects.

"The deal will challenge the sector to more than double the number of women entering the industry to at least 33% by 2030, with the ambition of reaching 40% – up from 16% today"

The deal will challenge the sector to more than double the number of women entering the industry to at least 33% by 2030, with the ambition of reaching 40% – up from 16% today. The Sector Deal will create an ‘Offshore Energy Passport,’ recognised outside the UK, for offshore wind workers to transfer their skills and expertise to other offshore renewable and oil and gas industries, allowing employees to work seamlessly across different offshore sectors. It will also see further work with further education institutions develop a sector-wide curriculum to deliver a skilled and diverse workforce across the country, facilitate skills transfer within the industry and prompt new targets for increasing the number of apprentices in the sector.

Ms Perry said, “This Sector Deal will drive a surge in the clean, green offshore wind revolution that is powering homes and businesses across the UK, bringing investment into coastal communities and ensuring we maintain our position as global leaders in this growing sector.  

“By 2030 a third of our electricity will come from offshore wind, generating thousands of high-quality jobs across the UK, a strong UK supply chain and a fivefold increase in exports. This is our modern Industrial Strategy in action.” 

Benj Sykes: “the offshore wind industry has been relentlessly innovative”

The co-chair of the Offshore Wind Industry Council and Ørsted UK country manager for Offshore, Benj Sykes said, “Now that we’ve sealed this transformative deal with our partners in government, offshore wind is set to take its place at the heart of our low-carbon, affordable and reliable electricity system of the future. 

“This relentlessly innovative sector is revitalising parts of the country which have never seen opportunities like this,” Mr Sykes said, “especially coastal communities from Wick in northern Scotland to the Isle of Wight, and from Barrow-in-Furness to the Humber.

“Companies are burgeoning in clusters, creating new centres of excellence in this clean growth boom. The Sector Deal will ensure that even more of these companies win work not only on here, but around the world in a global offshore wind market set to be worth £30Bn (US$39Bn) a year by 2030”. 

The Sector Deal, the first for renewable energy technology, puts offshore wind at the centre of the UK’s clean energy system, almost quadrupling capacity from 7.9 GW now to at least 30 GW by 2030.

The chief executive of RenewableUK, Hugh McNeal said the Sector Deal “is about creating opportunities for the people who will be part of our 27,000-strong offshore wind workforce.”

Mr McNeal said, “We’re setting up a new body to develop the right skills for years to come, not only by offering apprenticeships, but also by helping experienced people from other parts of the energy sector, as well as the military, to make the change into offshore wind. We also want to ensure far more diversity in the industry, by reaching a target of at least 33% women employees by 2030, and by recruiting people from a wider variety of ethnic backgrounds.

“This deal will also ensure that the UK maintains its leading role as an offshore wind innovation hub, accelerating our world-class R&D in fields like robotics and AI, and cutting-edge technologies being put through their paces at our globally-renowned test facilities.” 

Scottish Power chief executive Keith Anderson said ScottishPower “is proof that offshore wind works” and said the company and industry had worked tirelessly to bring down costs. “Having transitioned to 100% renewable energy, we will be building more windfarms to help the UK shift to a cleaner electric economy,” he said, noting that two of the company’s offshore windfarms in East Anglia will replace all of the old thermal generation the company has sold. “We are ready to invest more by actively pursuing future offshore projects both north and south of the border,” Mr Anderson said. 

“We have a fantastic supply chain already in place in the UK, from businesses in and around East Anglia to across England, across Scotland as well as Northern Ireland. The Sector Deal will attract even more businesses in the UK to join the offshore wind supply chain and we are excited to see the transformative impact this will have on our projects.” 

Scottish Renewables senior policy manager Fabrice Leveque said the deal was a “major milestone” for the government’s Industrial Strategy, setting a clear path for offshore wind, one of ambition, optimism and innovation. “That’s particularly true in Scotland, where the sector is building out again after delays which meant schemes in shallower waters further south powered ahead,” he said. “The benefits that are being realised in places like Hull and Lowestoft are now starting to appear in Scotland’s coastal towns and cities like Wick and Invergordon, heralding a new, sustainable energy future from the seas.

“With the support of government both at Westminster and in Edinburgh we, as an industry, can work together, as set out in this sector deal, to help ensure offshore wind’s benefits are felt across the country for decades to come.”

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