EXCLUSIVE: Deal will offer UK businesses a route into the offshore wind market in China, forge research links and secure UK role in 500MW demonstrator project in Shandong Province
The much-touted export potential of the UK's offshore wind industry comes to life today, with a major new agreement between the UK's Offshore Renewable Energy Catapult (ORE) and Chinese clean energy company Tus.
The collaboration agreement, set to be signed today in China, will see ORE and Tus work together to develop offshore wind technology and forge new trade links between the two countries, via Tus' subsidiary Tus-Wind and the TusPark incubator in Newcastle, part of Tus' global network of innovation bases.
Notably, the deal includes plans for a new 500MW demonstrator offshore wind farm in China's Shandong Province to incorporate at least 10-15 per cent of UK content - a condition estimated to be worth up to £220m to UK business and universities.
The new comes just a day after the UK launched its international brochure for its Industrial Strategy, which stresses the UK's position at the "forefront of global changes such as new technologies and climate change".
Secretary of State for Business, Energy and Industrial Strategy (BEIS) Greg Clark is in China to host the signing ceremony, which will be held at the British Ambassador's residence in Beijing. "The UK is established as a leader in offshore wind which is helping us lead the world in transitioning to a low carbon economy and in meeting our climate commitments, while we grow the economy and create jobs," Clark said in a statement ahead of the event.
"International research collaboration and clean growth are key to our modern Industrial Strategy and the agreement signed today will help to advance co-operation on offshore technologies with one of our largest global trading partners, unlocking further opportunities for projects across the UK and the rest of the world," he added.
The collaboration is the first major initiative under the Catapult's International ORE Research Platform, launched earlier this year with funding by Innovate UK. ORE hope the agreement will firmly establish UK expertise in offshore wind technology and boost export-ready innovation.
To that end, the deal will also see the creation of a new UK-China Technology Growth Accelerator at the TusPark incubator in Newcastle, for small and medium-sized UK businesses to develop new offshore technologies. Companies at the accelerator will have access to a network of more than 50 other TusParks across China to build industrial links between the two countries.
There are also plans for joint applied research projects between "high potential" companies and UK and Chinese universities.
China has a target to generate 20 per cent of its energy from low-carbon sources by 2030. It is already the largest global market for onshore wind, and the third largest market for offshore wind, with 1.6GW of operational capacity. Over the next five years it plans to build out 5GW of new offshore wind capacity.
But its expertise in offshore technologies, such as subsea cabling and deep sea turbines, lags behind the UK, according to James Battensby, the project's technical lead at ORE.
"They are at quite an early stage in the technology they develop," he told BusinessGreen. "They haven't developed far-from-shore wind farms like we have in Europe, and equally some of the turbines are a lot smaller in terms of MW capacity. And in the UK we are leading in terms of offshore subsea installation, we operate and maintain the largest amount of offshore wind globally, so we have a lot of skills in terms of how to improve turbine reliability, how to install cables and foundations and how to look at the site infrastructure."
Today's agreement answers calls for a sharper focus on technical expertise in UK export strategy for the industry. Matthew Wright, the managing director of Ørsted's UK operations. He told BusinessGreen in September that the UK government's export strategy should focus on technology innovation. "It's not realistic to think that all the components of an offshore wind farm are going to get manufactured in the UK," he said. "But if the design of the projects could take place here, if the innovation around new technologies and how it's integrated can partly take place out of the UK then that would be great."
Battensby echoed Wright's perspective. "You're not going to compete on fabrication," he said. "There's going to be next-generation technologies that you develop that you can export the know-how and market intelligence. That's how we are going to stay at the forefront of technology development."
ORE and Tus will host workshops early next year to identify key technologies with export potential for the Chinese market. These are likely to include cable installation technologies, monitoring technology, turbine reliability and maintenance kit.
The deal could also form a template for other nations with offshore wind export potential, Battensby suggested. The US, for example, has a very nascent offshore wind sector but is looking to fast develop a pipeline of projects for its eastern seaboard. "You could replicate this kind of model there, as long as you have a good research partner and you are helping the supply chain in both countries, Battensby said.
Last month's Industrial Strategy stressed the UK's desire to be the "partner of choice" for science and innovation and its plan to "maximise the advantages for UK industry of the global shift to clean growth". Now we're starting to see what some of the rhetoric looks like at ground level.
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