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Sector Deal lifts wind targets

By: Tom Russell 07/03/2019 4C Offshore

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The UK Government has today (Thursday 7 March 2019) published its long awaited Offshore Wind Sector Deal, a partnership between industry members and the government which aims to put the UK offshore wind sector at the forefront of the global shift to clean growth.

Using the Sector Deal, the government and industry members aim to generate one third of the UK’s electricity from offshore wind by 2030. This scaled-up ambition, coupled with the government’s Clean Growth Strategy, suggests that the UK could more than double its capacity to 30GW by 2030. It is also claimed that the UK could become a global leader in renewables, with more investment potential than any other country in the world.

This is the first Sector Deal for any renewable energy technology in UK history, and it aims to help source more electricity from renewables than from fossil fuels. The government expects that 70% of British electricity will come from low carbon sources by 2030 and over £40 billion of infrastructure investment in the UK.

As part of the deal, industry members have pledged to invest £250 million over the next 10 years into companies across the country providing goods and services. This is expected to help companies to grow their businesses further and to encourage new companies to spring up around the country to support the industry.

The industry has also committed to reducing the cost of offshore projects in the 2020s and overall system costs, so projects commissioning in 2030 will cost consumers less, with plans to move towards a subsidy free model. With this, the Crown Estate and Crown Estate Scotland are expected to release new seabed land from 2019 for new offshore wind developments.

The Contracts for Difference allocation round for less established technologies such as offshore wind will open by May 2019. The government stated it will hold another allocation round in 2021 and auctions around every two years. Depending on the price achieved, these auctions will deliver between 1 and 2 GW of offshore wind each year in the 2020s.

To ensure UK companies benefit, the sector has set an increased target of 60% for the amount of UK content in home-grown offshore wind projects, making sure the £557 million pledged by the Government in July 2018 for further clean power auctions over the next ten years will directly benefit local communities.

The government has pledged a £115 million Strength in Places Fund to support areas to build on their science and innovation strengths and develop stronger local networks, as a competitive fund for collaborative bids. Local Enterprise Partnerships may also build on the example set by the Humber Local Enterprise Partnership to maximise opportunities in the offshore wind sector by investing in specialist skills and business support, which it has done successfully through its Growth Deal and the Hull and Humber City Deal.

Looking further afield, the Sector Deal is also targeted to boost global exports to areas like Europe, Japan, South Korea, Taiwan and the United States fivefold to £2.6 billion per year by 2030. This would be achieved through partnerships with the Department of Trade and industry to support smaller supply chain companies to export for the first time.

The Sector Deal also incudes plans to more than triple employment in the offshore wind sector to 27,000 jobs by 2030, up from 7,200. Furthermore, a target has been set to increase the proportion of women working in the offshore wind sector. Currently only 16% of members of the offshore wind workforce are women, but under this new ambitious deal, the sector will aim to increase the number of women entering the industry to at least 33% by 2030, with the ambition of reaching 40%.

Claire Perry, Energy & Clean Growth Minister said: “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.

“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.”

The UK is already leading the world in offshore wind with nearly 8GW installed. It is also home to what will be the world's largest offshore wind farm, Hornsea Project One. The 1.2GW project is being built off the 120km off the Yorkshire coast and is poised for commissioning in 2020. It will feature 174 Siemens Gamesa SWT-7.0-154 turbines which when commissioned in 2020 will power more than 1 million homes. The project is being developed by Danish offshore wind giant Ørsted which operates multiple projects out of coastal locations such as Barrow, Grimsby and Liverpool.

Benj Sykes, UK Country Manager for Ørsted and also co-chair of the UK’s Offshore Wind Industry Council commented on the Sector Deal: “Now that we’ve sealed this transformative 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

“This relentlessly innovative sector is revitalising parts of the country which have never seen opportunities like this for years, 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 £30 billion a year by 2030.”

For more information on the offshore wind industry in the UK and further afield, click here.

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Sector Deal lifts wind targets

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