The UK won’t meet its offshore wind targets until 2048, according to research from the Institute for Public Policy and Research (IPPR).
If manufacturing is ramped up in the UK, it could generate thousands of jobs and billions in revenue; if not, huge returns are at stake, and net zero goals will be threatened.
The think tank says the UK needs to triple its installation rate to get on track. The report highlights that in every major component of the wind supply chain, the UK fails to be among the top three European nations for manufacturing capacity, despite being second only to China in terms of offshore wind capacity.
The UK accounts for over a fifth (22%) of installed offshore wind energy capacity worldwide, according to the report. The Crown Estate recently published its UK Offshore Wind Report 2023, showing that the UK’s offshore wind market represents more than 40% of European offshore wind capacity.
If the UK had exploited its market for wind installation at the rate of other leading European nations (Denmark, Germany and Spain) it would have generated up to an additional £30 billion between 2008 and 2022.
Still, the UK has a unique competitive advantage and is well positioned to increase its specialisation in wind manufacturing thanks to pre-existing related green industries, the prospective size of its wind deployment market and the distinctive innovation ecosystem in the sector.
IPPR argues that in less than five years, the UK “can and must” build at least one additional blade factory, two new nacelle and tower factories and two extra foundation factories. This would capture the economic benefits of domestic component manufacturing.
It says an investment of £3.2bn in UK manufacturing facilities could generate tens of thousands of direct and indirect jobs, particularly in small and medium businesses. Failure to capitalise on this opportunity would put net zero at risk, undermine the UK’s energy independence and miss an “open goal” for economic growth.
IPPR makes several policy suggestions to enable this capitalisation. The government should ensure long-term contracts for developers with the introduction of non-price criteria in Contracts for Difference (CfDs).
It should also support businesses in expanding capacity across the whole wind manufacturing supply chain, and upgrade infrastructure by renovating ports and naval vessels to deliver and install large offshore wind farms.
Simone Gasperin, associate fellow at IPPR, said: “The UK is uniquely placed to become a world leader in manufacturing equipment for offshore wind farms. The government should grasp this opportunity with both hands and do all it can to maximise the manufacturing opportunity of its offshore wind power targets.’’
Ajai Ahluwalia, head of supply chain at RenewableUK, noted the report’s timeliness. It closely follows the Offshore Wind Industrial Growth Plan created by RenewableUK, the Offshore Wind Industry Council, the Crown Estate, and Crown Estate Scotland.
