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INDUSTRY ARTICLE


The UK will therefore be in the worst possible position: investing billions of pounds of tax payer money in the development of offshore wind farms where the major beneficiary will be German and Danish businesses. This is a crazy situation where the UK maximises cost to the treasury and minimises benefit to the taxpayer. Or as Renewable UK state:


“Although both scenarios will generate significant levels of activity, the lower scenario runs a greater risk of not stimulating inward investment in the UK. This is because the commercial and logistics benefits of setting up in the UK may not be a sufficient incentive for Tier 1 suppliers, who will instead look to supply offshore components from existing Continental supply chains.”


WHAT DO WE DO ABOUT IT? 1 The coalition government needs to provide a clear directive in relation to energy policy. Right now it is confused with ‘luddite’ Tory MPs opposed to renewable energy development being allowed to dominate the message. This has limited direct impact on the development of offshore wind farms, but it does have a direct knock on effect to private investors looking at the supply chain. This messaging needs to be corrected if we are to secure key investments. The UK currently has eight major offshore wind manufacturing projects announced, but not yet constructed. The potential is clearly there, but it is being held back by blinkered politicians.


The government’s desire is to appease Tory members who are fearful that the level of technological innovation required for production cost savings will not be delivered. They should read the DECC’s own report that shows wind energy projects due to start in 2018 will already produce cheaper electricity per MegaWatt hour than fossil fuel projects (including gas). It is, however, the emotional myopia of this Westminster lobby that is keeping us at the Scenario 1 stage and preventing inward investors building a UK offshore wind manufacturing supply chain. Essentially, they are ensuring the UK gets the worst possible deal.


2 There needs to be real pressure put on offshore wind developers to use UK content. Even at the lower levels of Scenario 1 there are billions of pounds being invested in offshore wind farms. These wind farms are dependant on UK tax payer subsidies and yet the government continues to take a “light touch” approach to requiring UK content. As the report points out this does not happen in other European countries and is a key area of weakness for UK Plc.


IN SUMMARY


Offshore wind has massive potential for UK Plc and the Humber region in particular. Right now we are the suckers in the game. We have the world’s biggest offshore wind farms, but receive only a tiny fraction of the manufacturing and supply chain wealth created by the industry. This situation is largely the fault of long term investors’ risk analysis, combined with confusing coalition government messaging, and the UK’s inability to find effective ways to specify local content in the manufacture and construction of wind turbines and offshore wind farms.


This is a situation that can rapidly be turned around. However, in order to do so we need to take the emotional politics out of energy policy and look at what is truly good for UK Plc. We are, as a nation, investing billions of pounds into offshore wind farms. This is happening and no amount of misinformed economic commentary by Tory backbench MPs will stop this. It is now our job to ensure that UK businesses and workers receive the maximum possible benefits from these developments. Otherwise we will continue to subsidise the development of a continental European industry in UK waters.


Sam Pick Renewables Network


www.renewablesnetwork.co.uk


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www.windenergynetwork.co.uk


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