Expanding the UK offshore wind supply chain could offer a £92 billion boost to the UK’s economy by 2040, according to a new report.
Published by the Offshore Wind Industry Council (OWIC) and the Offshore Wind Growth Partnership (OWGP), the Supply Chain Capability Analysis report found that “targeted intervention” in the UK’s offshore wind supply chain could add £92 billion of Gross Value Added (GVA) to the economy by 2040.
The UK has the one of the largest installed offshore wind capacities in the world and the sector continues to grow. A government energy trends report recently revealed that offshore wind capacity in the UK grew by 24% in 2022, accounting for an impressive 69% of the UK’s total renewable capacity growth to 53.5GW.
According to the Department for Business & Trade, the UK currently has a fully commissioned offshore wind capacity of 13.9GW with a total pipeline of roughly 77GW across 80 projects, as the nation works towards a 50GW by 2030 offshore wind target.
This expansion, the report noted, will require a significant increase in demand for equipment and services. Offshore wind development overseas will also create demand for equipment, leaving an opportunity for the UK to export its equipment, services and expertise.
The report broke down the highest value opportunities both domestically and internationally within the UK’s supply chain:
- Cables – £70 billion potential opportunity
- Substations and electrical design – £30 billion potential opportunity
- Steel fabrication – £100 billion potential opportunity
- Floating wind – £55 billion potential opportunity
- Development services – £35 billion potential opportunity
- Offshore services – £170 billion potential opportunity
- Vessels – £10 billion potential opportunity
- Blades and rotor assembly – £70 billion potential opportunity
- Wind Turbine Generator (WTG) components – £20 billion potential opportunity
To take advantage of this opportunity, the report urged for more to be done to keep the UK’s supply chain resilient, focusing on value chains, and capturing more value from main installations contract packages.
“The UK has some world-class factories and organisations involved in renewables, and now we are in a global race for cleaner energy; we need to keep our foot firmly on the accelerator to avoid slipping behind and losing the advantages that we have gained,” said Sophie Banham, vice-chair of the OWIC.
“This report and the detailed analysis that sits behind it, shows how the UK can develop its supply chain to maintain a leading role through a coordinated Industrial Growth Plan.
“By intervening in key areas, we can ensure the UK’s ambitious deployment targets are achieved in a way that maximises benefit to the UK through the development of industrial clusters, inward investment and significant job creation.”
Tim Pick, chair of the OWGP, and the UK’s former Offshore Wind Champion, said: “The UK is one of the world leaders in offshore wind in terms of installed capacity, contributing to lower energy bills, extra money for the public purse, and new jobs being created in coastal towns and cities. However, we’re only really scratching the surface when it comes to the full potential economic and social benefit of offshore wind, which we can only capture by maturing our domestic supply chain.
“Achieving this requires a coordinated strategy from both public and private sectors, with industry programmes like the OWGP playing an important role. There are significant lessons to be learned from the aerospace and automotive sectors where the UK already has nurtured a leading position.
“This new analysis allows us to better target our support to UK supply chain companies, foster the development of new technologies, and support a just transition – keeping the UK competitive on the global stage.”
