Offshore wind deal negotiations ‘lengthy and confusing’

The offshore wind industry’s sector deal with the government was unveiled months after the industry said it was within weeks of signing it, according to a new report by the Business, Energy and Industrial Strategy (BEIS) committee.

The new report, which looks at the BEIS department’s track record in delivering its industrial strategy sector deals, hails the offshore wind agreement because it can help to boost clean growth and deliver investment in parts of the UK beyond the south east, especially neglected coastal regions.

It recommends that the government should pursue further sector deals that “similarly seek to deliver environmental and societal benefits alongside the economic boost they can bring to industry”.

However the report highlights the protracted gestation period for the offshore wind deal, which was “weeks” away from being signed in mid-October according to Benj Sykes, vice president of wind farm developer Orsted.

The offshore deal is one of five sector deals, which the committee examined in detail.

Sykes, who is also co-chair of the Offshore Wind Industry Council, told a hearing of the BEIS committee that the deal could be ready in time for Offshore Wind Week in November.

However the final version of the agreement, a draft of which appeared in March last year, only finally appeared last week.

The report says the process of negotiating the sector deals has been “lengthy and confusing”.

It says: “Even sectors that have secured a deal, such as offshore wind, compared the process of securing a deal to playing darts blindfolded.”

It also says that agreeing a sector deal will not on its own tackle the UK’s productivity problems, pointing to how the nuclear version has not prevented the recent withdrawal of investors from the Wylfa and Moorside projects.

It says that many of the problems identified by industries, like skills, were common across the economy rather than to specific sectors.

Responding to the publication of the report into Industrial Strategy sector deals, Jonathan Werran, chief executive of thinktank Localis, said: “The committee rightly points to the success of the offshore wind sector deal as an exemplary way to boost coastal areas, rebalance the economy and ensure the Industrial Strategy delivers economic, environmental and societal benefits which people can experience in their daily lives.

“The clean growth agenda has unique potential to galvanise renewal where it is needed most in our country. And with ambitious national 2040 targets for decarbonisation to be addressed, the question of how we deliver good clean growth must increasingly become a mainstream issue, one for which our local authorities must prepare urgent and strategic place-based answers.”