Offshore Wind Sector Deal aims for a third of UK energy from offshore by 2030

United Kingdom

On 7 March 2019, Clean Growth Minister Claire Perry announced the launch of the new joint government-industry Offshore Wind Sector Deal.

Overseen by the government-industry body, the Offshore Wind Industry Council, the sector deal forms part of the wider UK Industrial Strategy, which was launched by the Government in 2017 to ensure the UK remains one of the best places to innovate, do business, invest and create jobs. The UK Industrial Strategy identifies four ‘Grand Challenges’, of which ‘Clean Growth’ is one. The separate Clean Growth Strategy provides for developing an offshore wind sector deal as part of the strategy.

The deal contains a central commitment to ensure up to 30GW of offshore UK generating capacity is delivered by 2030, which is equivalent to over 30% of the country’s electricity needs. Just how much of the 30GW commitment will be met is stated to be subject to costs reducing further. 

In addition, there are further key commitments by both the Government and industry, including:

Government Commitments

Industry Commitments

Fund collaborative RD&D with a focus on increasing the UK competitiveness of goods and services.

Co-fund investment in UK-based RD&D to help increase productivity and competitiveness in UK supply chain and export opportunities.

Make up to £557m available for future Contracts for Difference, with biennial allocation rounds commencing in May 2019, which accords with the timeframe in the Clean Growth Strategy.

Increase female workforce representation to a third by 2030, with an ambition of 40 per cent women employed in the sector by 2030. The figure in 2018 was 16%.

The Crown Estate and Crown Estate Scotland will undertake new seabed leasing in 2019.

Set new target for BAME representation by end of 2019.

Address strategic deployment issues including aviation & radar, onshore & offshore transmission and environmental impacts.

Develop an Offshore Energy Passport to accredit offshore workers and facilitate global job-mobility.

Bolster regional clusters through significant investments that benefit the industry, including through the £115m Strength in Places Fund.

Deliver cumulative infrastructure investment of over £40bn to 2030 to deliver a low-cost, clean energy system.

Alongside the deal, the Government will provide over £4m for British businesses to share expertise globally and open new markets for UK industry through providing technical assistance to countries such as Indonesia, Vietnam, Pakistan and the Philippines.

Invest up to £250m in building a stronger UK supply chain, including establishing the Offshore Wind Growth Partnership.

 

Increase UK total lifetime content for offshore projects commissioned after 2030 to 60% (up from 50%).

Set target of increasing exports fivefold to £2.6bn by 2030.

Does the sector deal go far enough?

The 30GW by 2030 commitment accords with the vision set out a year ago during early-stage negotiations for the sector deal. However, some critics do not think the commitment goes far enough. For example, the National Infrastructure Commission considers more offshore generating capacity is required:

“Our National Infrastructure Assessment – the first of its kind for the UK – recommends that ministers aim for half of the UK’s electricity generation to come from renewables by 2030.”

If offshore wind is to only account for a third of the UK's electricity needs, it follows that this technology can only form part of the country’s strategy to decarbonise in accordance with its obligations under the Paris Agreement and EU law. Carbon Capture Usage & Storage, hydrogen and other emerging technologies are climbing the agenda, and significant investment into these is required to ensure the UK complies with its treaty obligations and the lights stay on.