Britain is not making the most of its opportunity to become the ‘Saudi Arabia of offshore wind’, according to a new report from the think tank IPPR. The report says the British Isles have ideal building conditions, with large areas of seabed in shallow waters, close to shore, but warn that the government is not doing enough to bring down costs and secure British jobs in offshore wind.
The report says the government has backtracked on ambition to secure 18GW offshore wind by 2020 and expects just 4.4GW to come online between 2020 and 2030. The report argues that as a result the industry risks missing out on an additional 15,000 jobs that could be created by 2020.
Will Straw, Associate Director at IPPR, says: “The UK’s current policy trajectory could see it achieving a ‘worst of all worlds’ outcome: low volume, low jobs, and high costs. This would fail our climate challenge, our jobs challenge, and our rebalancing challenge. Unless Britain ‘pumps up the volume’ there is little prospect of either bringing down the costs of offshore wind or creating domestic jobs.”
He continues: “An alternative pathway is possible, if the government can bring together an industrial strategy for the sector predicated on a combination of ‘carrots and sticks’. The industry should be given the long-term clarity that it needs, and which has been provided in other countries. A 2030 target for the carbon intensity or share of renewables in the power sector is a necessary condition as are long-term 20 year contracts. But developers must be expected to drive down costs with a subsidy regime that reduces the strike price over time. Developers and suppliers should do more to provide apprenticeships and sponsor university and FE courses.”
The report argues for a three-point strategy to build a strong domestic offshore wind supply chain:
* The UK government needs to attract at least two turbine manufacturers, preferably more. While failure to do so would not be fatal to the prospect of a strong domestic supply chain, success would be a major boost, as these companies are able to attract a cluster of other companies further down the supply chain (as is the case in Denmark).
* The UK government must continue to support and build upon its existing strengths in the supply chain, as the UK also has expertise and manufacturing capability in both the onshore wind and the North Sea oil and gas industry which can be built upon.
* The UK government should support export opportunities for British firms as they build up their expertise in the supply chain and related services. A new EU renewables target would help create export markets to 2030.