Nearly half of British offshore wind farms 'locally sourced'

With the UK government expected to this week set out new plans for cost-effectively decarbonising the energy sector, two new reports aim to underline the economic benefits of investing in offshore wind power, despite it remaining one of the more expensive forms of renewable energy.

Analysis by BVG Associates will today show 43 per cent of the content used to build and run UK offshore wind farms has been sourced locally. The report commissioned by the Department of Energy and Climate Change (DECC), sea bed-owner The Crown Estate and trade body RenewableUK, is the first of its kind to show the level to which UK companies are reaping rewards from the expanding offshore wind industry.

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The report details how the sector in the UK is well on track to meet its self-declared target for 50 per cent UK content in offshore wind farms. RenewableUK said the performance translates to £840m of offshore wind investment being retained in the UK in the past year alone.

Wind industry companies have come under pressure in recent years to prove their investments are creating local jobs by attracting new manufacturing plants or supply chain opportunities. With some earlier projects, such as Thanet offshore wind farm, sourcing only 20 per cent of its content from UK operations, fears had been mounting that the country would once again miss out on attracting local investment in manufacturing capacity, repeating the experience of the onshore wind sector.

But Benj Sykes, co-chairman of the government and industry led Offshore Wind Industry Council, predicted local content share for offshore wind farms will now increase further as the industry develops. “We expect the amount of UK content to grow as more companies base their operations here,” he said. “This includes the recent opening of a blade factory on the Isle of Wight, and Siemens’ landmark blade manufacturing and turbine assembly plant scheduled to open in Hull next year. This means more jobs and investment in local communities, proving that the offshore wind industry is making a substantial contribution to the British economy.”

The report reveals that currently the actual content in wind turbine supply remains low, at just three per cent, while most large electrical components, such as switch gear transformers, were also imported. However, UK businesses, such as Harland and Woolff and BiFab, contributed significantly to the construction of offshore platforms and foundations, and a large chunk of investment for operations and maintenance is sourced in the UK.

Meanwhile, a separate report from the European Wind Energy Association (EWEA) today, predicts the wind industry as a whole could generate 366,000 jobs and €591bn in investments across the bloc by 2030.

The report predicts wind power will be the largest single source of European electricity supply by the end of the next decade, overtaking coal and gas. But it  warned the sector would only be able to secure this prospective leadership position if governments show a renewed commitment to delivering on their clean energy and climate change policies.

It comes after a separate report last week from the International Energy Agency (IEA) predicted renewable energy globally will overtake coal as the number one source of energy by the early 2030s. Renewable energy technologies accounted for nearly half of all new electricity plants in 2014, and are now the second largest power generator after coal.

The European Union has agreed to source 27 per cent of its energy from renewable sources by 2030, but it has yet to explain how that goal will be shared between member states – an uncertainty that has sparked concern across much of the wind power industry.

Today’s EWEA report calls for countries to develop national renewable energy action plans among a range of policy proposals that could help boost the industry.

The report predicts that under a “central scenario”, wind power will deliver 334,000 jobs and €474bn in investments by 2030. But this could rise significantly to 366,000 jobs and €591bn if the EU shows a stronger commitment to helping the industry succeed, the EWEA added.

“Wind power can be the foundation of the European energy system within the next 15 years,” said Giles Dickson, chief executive of EWEA in a statement. “Wind power makes economic sense. But policymakers must demonstrate more determination than is on show today. Wind power can deliver economic growth in Europe by boosting investments, creating jobs and reducing electricity bills. A new market design, a reformed ETS and rigorous accountability on 2030 targets are essential if these goals are to be achieved.”

The wind energy industry has enjoyed an impressive run of form, as costs have fallen and ever more efficient onshore and offshore turbines have emerged. The pace at which the sector’s impressive expansion continues now rests to a large extent in the hands of Europe’s policymakers.

Nearly half of British offshore wind farms "locally sourced"