The UK’s offshore wind industry could make an increasingly important contribution to the UK’s economy in the future, according to a report published today.
However, the amount of value it adds depends on the ability of UK companies to compete with their European rivals, and the capacity of scientists and engineers to innovate.
The economic benefits – beyond the electricity – are nil below a certain threshold of UK "content", meaning the amount of UK skills, products and services used in building the wind farms.
The report by the Offshore Renewable Energy Catapult, a government agency, says the gross value added to the UK economy for each gigawatt of wind power is zero when the strike price of the energy produced is £105 and the UK content is 30%.
However, each additional 10% of UK content increases the net worth to the UK economy by between £500m and £600m, and each £10 reduction in the £105 strike price of the electricity is worth £240-350m.
The report notes that if the next UK auction round achieved a strike price of £90 and 50% UK content, this would represent about £1.7bn of added value per gigawatt.
It estimates that if the UK’s wind energy industry hits a target of 65% UK content by 2030, the gross value added of each additional gigawatt would be around £2.9bn.
Andrew Jamieson, the chief executive of the catapult, said: "Our latest report highlights that offshore wind is already a UK success story, but with continued investment and support the industry is capable of delivering so much more. Continued cost reduction and increasing amounts of UK content will significantly increase the economic value of new offshore wind project."
ORE Catapult was established in 2013 by the Westminster government and is one of a network of groups set up to promote high-growth industries.
Image: European countries presently have about 11GW of installed capacity (Fotolia/Yauhen Suslo)