INDUSTRY ARTICLE
OFFSHORE WIND
The industry of offshore wind the UK is all hat and no Cadillac. We lead the world in terms of offshore wind production but we trail badly in wealth creation. Recent research by industry trade association Renewable UK reveals that a “good” performance for a UK offshore wind farm construction is 30% spent here in the UK. That means that 70% of the spend in these mammoth tax payer funded projects goes overseas.
ALL HAT AND NO CADILLAC?
WHY IS THIS?
Primarily, this is because the vast bulk of manufacturing work is not done here in the UK. If we separate the manufacture of a turbine into nacelles, blades, towers, monopiles, foundations and installation we see twenty six major offshore wind manufacturing plants in Europe. Germany leads the way with fourteen plants with the UK propping up the league table with just two. Interestingly, there are eight manufacturing plants in the UK announced, but so far none are in construction (and may never be). It’s no surprise that UK Plc is not getting its share of the offshore wind boom when the vast majority of turbine components are imported from Europe.
WHY IS THIS HAPPENING? Traditionally the UK was slow to embrace renewable energy which gave a key ‘first mover’ advantage to Germany and Denmark. Combine that with the decline of UK manufacturing over the past twenty years and it has been very difficult to persuade major manufacturers that the UK has a supply chain to support them. Put simply; build a factory in Germany and you know you will have the supply chain to support you. Build in the UK and there is a question mark.
Going back four years to the days of the last Labour government, the supply chain weaknesses were being overcome by the sheer rate of growth for UK offshore wind. Offshore wind components are invariably huge and there are key logistics benefits of locating manufacturing close to wind farms in the North Sea. With the industry growing rapidly manufacturers were prepared to support the UK supply chain in order to secure a place in the UK market. This led to a whole host of announcements such as the Greenport Hull project and Vestas in Sheerness etc.
However, after three years of the coalition government, growth in the industry has now stalled. Repeated mixed messages from Conservative MPs have damaged investor confidence and manufacturers have been comfortable meeting UK demand via existing European based facilities. Renewable UK illustrates UK demand for production capacity in two scenarios. Scenario 1 shows an installed capacity of 13GW by 2020 and Scenario 2 shows an installed capacity of 18GW by 2020. We are currently on track for Scenario 1. This means that existing European supply capacity is capable of meeting UK demand.
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www.windenergynetwork.co.uk
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