Future of UK Offshore Wind Sector in Jeopardy

The Institute for Public Policy Research (IPPR) has released a new study that warns the UK government that if it does not take action soon to rectify the situation, the future of the country’s promising offshore wind power sector could be doomed.

The UK is the world leader in offshore wind farms, with its shallow seas, and steady winds making it one of the best locations in the world for installing offshore wind turbines; in fact just last week David Cameron, the British Prime Minister, officially opened the world’s largest offshore wind farm in the Thames estuary, the London Array.

The London Array. (ITV)

Related article: Bidders Line up for First US Offshore Wind Auction

The government’s mixed messages, sent by a poor policy, have failed to attract any large wind turbine manufacturers to set up in the UK, despite the abundance of finance, skilled labour, expertise, and demand. This means that very little of the tens of billions of expected foreign investment, and wind subsidies paid for with British taxes, will actually benefit the British economy, as foreign manufacturers take the cash overseas.

Will Straw, the associate director at the IPPR, explained that “the current policy trajectory could achieve a worst of all worlds outcome – low volume [of energy generated], low jobs and high costs. This would fail our climate challenge, our jobs challenge and our rebalancing [of the economy] challenge. Unless Britain pumps up the volume, there is little prospect of bringing down the costs of offshore wind or creating domestic jobs.”

The government’s refusal to set its own 2030 renewable energy target, and its strong opposition to a target set by the European Union, fail to provide long-term security for the wind sector, and therefore deter investors and manufacturers alike.

The recent decision to set the offshore wind strike price at £155 per megawatt hour, meaning that wind companies would receive at least that amount from the energy they produce from offshore turbines, has deterred energy companies even more as they claim that at that rate it will be almost impossible for them to reduce their costs enough to turn a profit.

Related article: 2014 Expected to be a Bumper Year for Wind

The IPPR states that in order to secure the future of the UK offshore wind industry, the government must work to attract at least two wind turbine manufacturers to set-up shop in the UK.

Jennifer Webber, the director for external affairs at RenewableUK, commented that attracting manufacturers “would stimulate the healthy growth of the offshore wind industry not just for the rest of this decade, but also in the decade which follows. We've made progress on the development of the UK supply chain in areas such as manufacturing foundations and electrical equipment, but we must ensure that we reap the full manufacturing benefits by bringing big offshore turbine factories to ports around the UK rather than seeing them sited in other countries.”

By. Charles Kennedy of Oilprice.com