New sector deal aims to boost UK manufacturing base and tap into offshore wind industry's huge export potential
If you stand on the shoreline of Blyth North Beach and stare out to the horizon, you will be greeted by the sight of a clutch of offshore wind turbines up close and personal, spinning away just half a mile from the Northumberland coast.
Blyth Offshore Wind Farm, which came into operation at the turn of the century, was the UK's first ever offshore wind project. Fast-forward 19 years, and offshore wind is delivering around eight per cent of the UK's power and employs more than 7,000 people.
The government has long eyed the sector, in which the UK is a genuine world leader, as a major growth opportunity for UK manufacturing and exports. It underscored this ambition today with the release of the long-awaited Sector Deal, which sets out how government and industry can work together to grow the offshore wind sector towards a new goal of providing one third of UK electricity by 2030.
"This new 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," Energy and Clean Growth Minister Claire Perry said today. "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."
It's a lofty ambition, but if it can be met it would mean the UK would, for the first time in history, generate more electricity from renewables than fossil fuels. It would also bring significant investment and economic activity to regions that have endured decades of industrial decline, and would see the number of jobs in the sector triple to 27,000 by 2030, according to the government.
To deliver these economic and social benefits, industry and government will work together to ensure UK manufacturing is prioritised and the sector's export potential is maximised.
For the industry's part, the Sector Deal establishes a new target for UK offshore wind projects to include 60 per cent UK content. Meanwhile, a £250m industry-backed Offshore Wind Growth Partnership will be established, to ensure offshore wind hubs like East Anglia and Humber stay at the forefront of manufacturing and technical expertise, investing in innovations such as floating wind, robotics, and advanced manufacturing.
Crown Estate, which controls the development of UK seabeds, will release new land parcels from the UK's 7,000 miles of coastline this year for new offshore wind developments, with 30GW of capacity expected to be in operation by 2030.
But industry will also have to continue to bear down on costs - which have already fallen by 50 per cent in the last two years - with the Sector Deal stipulating that projects commissioning in 2030 should cost consumers less, with the industry as a whole on a path "towards a subsidy-free world".
For its part, Whitehall has promised to support the industry - government has said the Department of Trade and Industry will work to boost international exports five-fold by 2030, including new support to help smaller supply chain companies to win business overseas. Up to £4m of funding will also be used to fund a technical assistance programme, enabling British businesses to share expertise globally and encourage developing nations to move away from coal power towards cleaner sources of fuel.
Work will also begin in earnest to ensure the UK's offshore wind sector has access to the skilled workforce it will need to grow. The Sector Deal outlines plans to develop a sector-wide curriculum for offshore wind training at further education institutions, and increase the number of apprenticeships in the sector. And as trailed by Ministers yesterday, the Deal also contains a target for the offshore wind workforce to be at least 33 per cent female by 2030.
The Sector Deal is the tenth from the government under the UK's Industrial Strategy but the first to spotlight renewable technology. Developed in close consultation with the industry, it was broadly welcomed by leading figures across the sector.
Hugh McNeal, chief executive of trade body RenewableUK, said the deal puts the UK on the right path to maximise the potential of offshore wind for the economy. "This deal will 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," he said.
Benj Sykes, Ørsted UK Country Manager for Offshore and co-chair of the Offshore Wind Industry Council, echoed the positive sentiment. "Now that we've sealed this landmark deal with our partners in government, as a key part of the UK's Industrial Strategy, offshore wind is set to take its place at the heart of our low-carbon, affordable and reliable electricity system of the future," he said.
But reaction was not universally positive. Greenpeace dismissed the plan as "woefully inadequate", pointing out that following the collapse of a series of high-profile plans to build large new nuclear plants, the UK will need more low-carbon generation sources to plug a potential energy supply gap in the 2020s.
According to Greenpeace, to make up for a predicted shortfall in nuclear generation, offshore wind needs to hit 45GW of capacity by 2030. "The government's plans for a fleet of new nuclear reactors has collapsed," said Greenpeace UK's executive director John Sauven. "This leaves Britain with a big energy gap in future. It means the government's latest offshore wind target of 30GW by 2030 is woefully inadequate."
Meanwhile, the CBI's energy and infrastructure director Tom Thackray may have described the Sector Deal as "great news" for the UK's offshore wind industry, but he also warned the government must do more to ensure its Industrial Strategy as a whole lives up to expectations. "The government must redouble its efforts to implement all parts of the Industrial Strategy, in order to boost productivity and prosperity across the UK for the long run," he said. "This includes more joined-up thinking and better co-ordination between government departments."
If the government and offshore wind industry have their way, by 2030 offshore wind turbines will be an everyday sight around the UK coast, while British engineering and skill will have formed the powerbase of a thriving global industry. The potential is there for offshore wind farms to undercut fossil fuels on costs and provide the backbone of the UK's energy industry, in conjunction with energy storage and smart grid innovations. And all from an industry that barely existed just a decade ago.
However, questions remain over whether it is wise to concentrate so much effort and investment on one renewables industry, especially while others - such as onshore wind and solar - struggle on with comparatively little policy support. The Offshore Wind Sector Deal is great news for the offshore sector, but its ambition also serves to highlight the paucity of similarly bold thinking in other areas of low-carbon policy making.
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