Opinion - 08/June/2021

Offshore wind’s success is only the beginning

The world’s ocean provides much of humanity’s foodstuff, carries the bulk of the world’s trade and acts as a store for enormous amounts of carbon dioxide. It is central to our climate goals and prosperity, says Graham Stuart, UK International Trade Minister, on World Ocean Day (June 8th, 2021)

The views expressed are those of the author and do not necessarily reflect the position of FORESIGHT Climate & Energy

Global collaboration should place offshore wind at the core of the energy transition

As an island nation, the UK looks to the sea for solutions to the challenges we face. That is why we have built the world’s largest offshore wind deployment in response to the need to decarbonise and drive down the cost of doing so.

Offshore wind is renewable, affordable and large-scale. Off the coast of my constituency in East Yorkshire lies Hornsea Project One, which alone is powering more than one million households.

The Contracts for Difference (CfD) model the UK uses requires wind farms to pay back the state if the wholesale price exceeds the guaranteed price. This, coupled with the largest auction pipeline, has transformed the economics of offshore wind and seen prices drop from £117/MWh in 2015 to £57/MWh in 2017 and £40/MWh in 2019.

Offshore wind is plentiful. There is enough potential worldwide to meet global electricity needs 18 times over, yet current capacity is less than half of 1% of this.

The offshore wind sector in the UK is growing rapidly and there are extensive project construction activities scheduled up to 2030.

The UK has the largest future pipeline of offshore wind projects in Europe and is seeking to develop at least 40 gigawatts (GW) of capacity by 2030 from a current total of around 10 GW. This means some £40 billion of investment in Capex to 2030 and ongoing expenditure in operating and maintaining the assets for 25-35 years.

Significant momentum

It has now been just over 20 years since the UK’s first offshore wind farm was installed. We have the most offshore wind installations in the world, generate more electricity from offshore wind than any other country and export our expertise around the world from America to Asia.

Now the UK is going further. Floating wind farms can be deployed in deeper waters, meaning that countries around the world with naturally limited shallow waters can still access offshore wind power.

The UK is already home to the world’s first two commercial floating offshore wind projects and by 2030 we intend to have scaled up this capacity twelve-fold, creating countless opportunities for businesses in the process.

As well as providing clean energy solutions, offshore wind supports livelihoods and families through the diverse chains of green jobs it creates. From designers and component manufacturers to turbine technicians and deep-sea divers, offshore wind can offer high-quality employment opportunities for everyone from school leavers to experienced hires leaving fossil fuel industries.

Moreover, these largely local roles can boost our coastal communities and help “level up” our country; for example, 97% of the staff at the Siemens Gamesa factory in northeast England live within just 50 kilometres of the facility and an offshore wind industry cluster there has helped the city cut its unemployment in half.

In the last 18 months, UK Export Finance, the government export credit agency, has supported three major offshore wind projects in Taiwan with £500 million in financing. This enables UK firms to win green energy contracts that they otherwise may have missed.

For instance, FoundOcean, a Scottish-based company, has won a contract to provide the foundations for a 100-turbine offshore wind farm in Taiwan. This contract will create 30 new green jobs at the firm and help place Scotland at the vanguard of Taiwan’s offshore wind revolution.

So it is welcome that research by the Offshore Wind Industry Council (OWIC) indicates the private sector is set to invest more than £60 billion in UK offshore wind in the next five years, with the number of direct and indirect jobs in the industry set to rise to almost 70,000 by 2026.

But, in order to achieve the full potential of ocean-based solutions, we need nations all around the world to embrace offshore wind and step up their ambitions in this area. That means understanding their technical resource, engaging in marine spatial planning, developing national visions for offshore wind and setting long-term targets for offshore wind deployment.

Climate talks

Global problems require global solutions and the UK is very much looking forward to hosting the UN Climate Change Conference (COP26) in Glasgow later this year. This is an opportunity to galvanise global action around climate change at a critical moment for our planet and our peoples.

The UK’s presidency will champion international cooperation on an accelerated transition to net-zero and building a resilient global economy.

We must come together as an international community and strain every sinew to build a better, greener and more prosperous future for us all. Tapping into our latent offshore wind potential is a great place to start this World Ocean Day.

Do you have a thoughtful response to the opinion expressed here? Do you have an opinion regarding an aspect of the global energy transition you would like to share with other FORESIGHT readers? If so, please send a short pitch of 200 words and a sentence explaining why you are the right person to deliver this opinion to opinion@foresightdk.com.


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