The UK continues to drive investment and innovation in its thriving offshore wind sector through ambitious targets and the deployment of new technologies.
The UK is one of the world’s largest markets for offshore wind, with more than 10GW of cumulative installed capacity across 38 sites. There is a further 5GW in pre-construction, and there are plans for a further 11GW.
Sector growth was encouraged by the UK’s target of 40GW of offshore wind energy by 2030, as stated in the Ten Point Plan for a Green Industrial Revolution. This includes 1GW generated by floating technologies. This ambition was increased through the British Energy Security Strategy (BESS), published in April 2022, which aims to achieve up to 50GW of offshore wind by 2030. 5GW of this should utilise floating technology.
Teesside Freeport is the UK’s largest Freeport, driving growth in renewables, advanced manufacturing and the chemicals and process sectors.
Freeport East (Felixstowe and Harwich)
Freeport East is a world-leading centre for clean energy production, offering a unique set of opportunities and support for investors, traders, manufacturers and suppliers. This includes access to innovation, technology and new collaborative partnerships.
UK policy is underpinned by a strong pipeline of projects and lease awards, including 25GW awarded to floating and fixed bottom wind in the recent ScotWind leasing round. Battery Energy Storage System BESS has also laid the foundations for a new streamlined process, including planning reforms to cut the approval times for new offshore wind farms from 4 years to one.
The Offshore Wind Sector Deal, announced in 2019, is driving the transformation of the UK offshore wind supply chain, including an industry commitment to 60% local content by 2030. It’s expected that 90,000 jobs will be created in UK offshore wind by 2030.
The Crown Estate is responsible for the seabed in England, Northern Ireland, and Wales, while the Crown Estate Scotland owns and manages the seabed in Scottish Territorial Waters and adjacent areas of the UK Exclusive Economic Zone. These organisations run periodic leasing rounds, the latest of which saw 8GW awarded by The Crown Estate through Round 4, and 25GW awarded by Crown Estate Scotland. We are expecting the Celtic Sea floating wind leasing round to take place in 2023, confirming The Crown Estate’s ambition to unlock up to 4GW of new clean energy capacity in England and Wales and help establish a new industrial sector for the UK.
Annual auctions and allocation Round 5
In February 2022, the government announced that it would be increasing the frequency of auctions for funding through the Contracts for Difference (CfD) scheme to every year rather than every 2 years. The CfD is the UK government’s flagship scheme for procuring high volumes of clean energy at the lowest cost to consumers. CfDs incentivise investment in renewable energy and reduce the cost of capital by providing developers with protection from volatile wholesale electricity prices. Increasing the frequency of auctions is expected to give more projects the opportunity to enter the pipeline, thereby accelerating the decarbonisation of UK energy, and boosting the benefits to the UK supply chain. Allocation Round 5 is expected to be launched around March 2023.
Celtic Sea leasing round
The Crown Estate has completed the second phase of its engagement on plans for up to 4GW of floating wind leasing in the Celtic Sea (the area of ocean situated off the coast of Cornwall, between Wales and Ireland). This would provide enough clean energy to power approximately 4 million homes. It is anticipated that the Celtic Sea leasing round will see rights awarded in 2023.
Innovation and targeted oil and gas (INTOG) leasing round
The INTOG leasing round, operated by Crown Estate Scotland, is a mechanism through which developers will apply for rights to build offshore wind farms to provide low-carbon electricity. These offshore wind farms will subsequently power oil and gas installations and help decarbonise the sector. INTOG also provides an opportunity to enable small scale (less than 100MW) innovation projects, including alternative outputs like hydrogen.
Crown Estate Scotland’s ScotWind leasing round, which saw 25GW awarded across 17 projects (10 of which were floating), demonstrated the significant appetite for investment in the region. As a result of this success, Crown Estate Scotland is expected to progress plans later this year for a ScotWind 2 leasing round.
The UK has designated the following as key strategic priorities for components manufacturing:
- Nacelle and hub
- Floating substructures
- Floating anchoring and mooring systems
- Monopile foundations
- Dynamic, export and inter-array cables
- Transition pieces
Operations and maintenance
According to the Offshore Renewable Energy Catapult, the UK offshore wind operations and maintenance (O&M) market will grow faster in relative terms than any other offshore wind sub-sector market over the next decade. By 2030, it’s expected that it will be the UK’s second largest sub-sector after turbine supply; a projected £1.3 billion per year opportunity.
Offshore Electricity Transmission (OFTO)
The Office of Gas and Electricity Markets’ (Ofgem) – the UK regulator for the electricity and downstream natural gas markets in Great Britain – OFTO regime underpins the government’s renewable energy targets by connecting renewable wind generation and prioritising consumers. Ofgem manages the competitive tender process through which offshore transmission assets are sold and licences are granted, enabling the transmission of electricity generated by an offshore wind farm to the onshore grid. The Department for Business, Energy and Industrial Strategy (BEIS) has launched a new enduring regime for this through The Offshore Transmission Network Review (OTNR), aiming to improve offshore generation’s connection to the onshore transmission network, and facilitating a more supportive approach for multi-purpose interconnectors.
The 30MW Hywind Scotland Pilot Park was the world’s first floating offshore wind farm, established in 2017 by Equinor. Hywind Scotland has achieved the highest average capacity factor of all UK offshore wind farms every year since it became operational, proving the potential of floating offshore wind farms. Project CAPEX was £180 million. Read more about Hywind Scotland.
Kincardine is the world’s largest floating offshore wind farm, operating 15km off the coast of Aberdeenshire, Scotland. The farm – owned by Grupo Cobra (90%) and Grupo ACS (10%) – became operational in 2021. It has a capacity of 50MW and comprises five Vestas V164-9.5 MW and one V80-2 MW turbine, each installed on WindFloat® semi-submersible platforms designed by Principle Power. The total investment in Kincardine was £273 million.
Dogger Bank is the world’s biggest offshore wind farm and an important milestone in delivering the UK’s Sector Deal ambitions and decarbonisation goals. The Dogger Bank Offshore Development Zone, located between 125km and 290km off the east coast of Yorkshire, extends over approximately 8,660 square kilometres and water depths range from 18 metres to 63 metres. The wind farm will be broken down into phases A, B, and C to be delivered by SSE Renewables, Equinor, and Eni. Total investment in Dogger Bank will be approximately £9 billion. Read more about Dogger Bank.
Siemens Gamesa is investing £186 million to expand its already highly successful blade factory in Hull by 41,000 square metres making it the UK’s largest offshore wind manufacturing facility. The investment will see the creation and safeguarding of around 1,080 jobs.
Smulders has announced a £70 million investment in new equipment and infrastructure at their existing site in Wallsend, Newcastle. The investment will enable Smulders to manufacture offshore wind turbine transition pieces, and in turn create and safeguard more than 300 jobs.
SeAH has announced a £117 million monopile manufacturing facility at Teesworks, Teesside. It is anticipated that the facility will be one of the world’s largest monopile facilities for offshore wind turbines. The investment will create up to 750 direct jobs by 2030.
JDR Cable Systems
JDR is developing a £130 million state-of-the-art subsea cable manufacturing facility in Cambois, near Blyth. Construction will commence in 2022. The new facility will create and safeguard up to 440 jobs.