Only 4% of offshore wind leaders believe 50GW target is achievable

The vast majority (96%) of senior leaders in the UK’s offshore wind industry believe the government will miss its production target of 50GW by 2030, new research has found.

A report by Newton Europe has been compiled following a survey of 200 senior decision-makers in the UK’s offshore wind industry, gathering their thoughts on the country’s progress towards its targets.

It said that the government’s 50GW target “is a vital part of the UK’s plan to get to net zero carbon emissions and create a new energy economy with green jobs”.

It added: “The first priority must be to secure the next 30GW, but we also have to remember that the bigger picture demands more. Today’s industry faces a fresh set of challenges and a risk/reward methodology that has failed to adjust to them.

“The resulting low profit margins have created a pessimism that has permeated the offshore wind industry. So it’s no surprise that 96% of senior leaders believe the government will miss its target of 50GW by 2030.”

The report’s survey found that while most (63%) believe the UK will achieve at least 30GW by 2030, just 4% of senior leaders say they expect the UK to reach its 50GW target.

The current state of the infrastructure needed to construct offshore wind assets was cited as a main cause of pessimism. More than two thirds of leaders (67%), it explained, warn that the UK’s current pool of ports, vessels, and labour is too limited to support both the offshore wind and oil and gas sectors.

“Despite this, 31% believe that ports and infrastructure offer one of the best opportunities to compete globally – higher than green hydrogen (29%) or manufacturing (22%), though behind fixed offshore wind construction and installation itself (44%),” it added.

Commenting in the report, the government’s offshore wind champion Tim Pick said improving the UK’s port infrastructure was a priority.

“Offshore wind relies on ports, which have a catalytic effect on wider supply chain growth,” he said, adding, “One of the recommendations in my report, which I haven’t seen any substantive progress on yet but understand discussions are taking place, was that we need a structured programme to support and catalyse serious incremental port capacity investment – particularly to support the specific needs of commercial-scale floating offshore wind.”

There are also concerns about capacity, with the report noting the need for National Grid to build five times more transmission lines by 2030 as it has in the last 30 years.

It further explores the “major role” that the oil and gas sector has to play in assisting the UK’s offshore wind ambitions. A majority (70%) – including 67% of leaders in oil and gas itself – believe that the fossil fuel industry should allocate more resources to advance UK offshore wind.

Around the same number (69%) agree that oil and gas companies are good at sharing information and experience about offshore projects with others in the industry.

When asked about the specifics of how oil and gas companies can assist offshore wind, almost half (48%) called for existing offshore infrastructure to be repurposed altogether, 42% hope oil and gas firms will create synergies with supply chains, and 39% call for help in electrifying offshore platform operations.

Newton’s report makes a number of recommendations, including a call for the government to overhaul the structure and pricing of Contracts for Difference auctions and for the offshore wind industry to invest in areas such as digitalisation and asset optimisation.

Other conclusions include:

• Greater supply chain resilience is crucial, including an increased role for UK manufacturing;
• There needs to be investment in infrastructure – in marine assets such as ports, but also in grid connections;
• The oil and gas sector has skills and infrastructure that it could use to accelerate offshore wind development;
• More standardisation would support collaboration and scaling up; and
• Targeted policy measures to increase the UK offshore wind sector’s attractiveness to foreign investment can bring new capital into the industry.

Commenting on the report Dan Parker, partner at Newton, said: “It has been a good month for the offshore wind sector. The government has stepped up to resolve the stark issues in CfD pricing ahead of the next auction next spring, and the chancellor offered some helpful reforms in his Autumn Statement. As such, the mood since our survey should have lifted somewhat.

“But there’s no denying there’s still a lot of work to do. Energy transition is a relatively young phenomenon, and it’s critical that we invest in the transformation required to remain a centre of excellence on the global stage. There are hurdles on the path; we have capacity issues in both infrastructure and UK skills. And there are several big players who will need to collaborate to make change happen. But these hurdles bring opportunities.

“The UK needs a comprehensive industrial strategy to build the infrastructure of the future; this will bring with it investment returns, jobs, and growth. The mammoth power of the UK’s oil and gas industry is perfectly positioned to play more of a role, and we have the expertise and experience to excel in digitalisation, asset optimisation, and innovation.”

Responding to the report Renewable UK’s executive director of policy, Ana Musat, said: “Maximising the amount of new offshore wind capacity we secure in each annual CfD auction over the course of this decade is vital to get us closer to the government’s target. Crucially, ministers will be setting out more details in March of next summer’s allocation round, including the overall budget and pot structures – these parameters will determine whether we can make up the ground lost in this year’s auction and regain our position as one of the most attractive destinations for international investment in offshore wind.

“Other measures such as the government’s commitment to cut grid connection delays from several years to six months send strong signals that the UK is working hard to address the barriers to deployment which we face. The industry is also working closely with the government on an Industrial Growth Plan to accelerate the development of our supply chain, to take advantage of the global boom in offshore wind and deliver our huge pipeline of domestic projects in the face of intense international competition.”

A Department for Energy Security and Net Zero spokesperson said: “The UK is home to the five largest operational wind farms in the world and we remain fully committed to our ambition of up to 50GW by 2030.

“We have attracted £200 billion in low carbon investment since 2010 and our recent increase to the offshore wind maximum strike price will help encourage investment into the UK’s thriving renewables industry and protect projects from global supply chain pressures.”