Offshore Wind Could Bring GBP 2.9 Billion to UK Economy by 2030
ORE Catapult published a new report on 28 March, highlighting the economic benefits of a strong UK offshore wind industry, which could be worth as much as GBP 2.9 billion to the UK economy by 2030.
The report – Economic Value of Offshore Wind: Benefits to the UK of Supporting the Industry – shows that the UK economy is already reaping the rewards of a maturing offshore wind sector. But latest figures suggest that continued cost reduction, resulting in lower levels of public financial support being required, coupled with increasing amounts of UK content in projects being commissioned and developed, will result in a significant increase in the economic return for the UK.
Supporting UK offshore wind is cost-benefit neutral with a strike price of GBP 105 and 30% UK content, ORE Catapult states. But industry is already doing better than this, and each additional 10% of UK content is worth a net GBP 500-600 million (depending on strike price), and each GBP 10 strike price reduction is worth GBP 240-350 million, depending on the level of UK content, according to the report.
Furthermore, the gross value added (GVA) to the UK per GW installed, given current UK content is 32%, is GBP 1.8 billion and is estimated to increase to GBP 2.9 billion by 2030 – if a projection of 65% UK content can be achieved.
If the next UK auction round achieved a strike price of GBP 90 and 50% UK content, this would represent an estimated GBP 1.7 billion per GW net benefit for the winning bid.
Continued public support for, and investment in, the UK offshore wind industry will create a virtuous circle of cost reduction and economic growth, ORE Catapult stated.
Andrew Jamieson, Chief Executive of ORE Catapult, said: “Continued cost reduction and increasing amounts of UK content will significantly increase the economic value of new offshore wind projects, which forms the basis of a compelling sector deal in line with the UK’s current direction for industrial strategy, with industry and Government working together to maximise UK growth and job opportunities and continue the cost reduction journey.
“In addition, continuing technological innovation in key supply chain areas such as offshore wind turbine blades and foundations, and developing skills in, for example, offshore operations and maintenance, also bolsters the UK economy through the potential export of skills, products and services to the global marketplace.”