Investment demand

Offshore leaders doubt UK can hit net zero target

Offshore wind
Offshore industry leaders are sceptical about government targets

Only 4% of senior leaders in the offshore wind industry expect the UK to reach its national production target of 50GW by 2030, according to new research.

Most (63%) believe the UK can achieve 30GW by that date, but 70% – including 67% of leaders in oil and gas – believe that the oil and gas industry should allocate more resources to advance the UK offshore wind sector.

More than two thirds of leaders (67%) warn that the UK’s current pool of ports, vessels, and labour is too limited to support both the offshore wind and oil and gas sectors. 

The results have emerged in a report by the Newton Europe consultancy which argues that the UK can maximise its existing world-class offshore wind resources to build a net zero future if there is more investment.

The UK currently produces 15GW of offshore wind, and a further 10-15GW is funded, which is why 80% of senior decision makers in the UK’s offshore wind industry are confident that the UK will successfully produce 30GW by 2030.

However, the ‘missing’ 20GW is deemed to be critical if the UK is to meet its Net Zero targets. Offshore wind currently generates around 13% of the UK’s power, and that needs to rise to nearer 45% in the next six years.

Beyond the targets, 71% of leaders say their business is worried about remaining financially competitive when it invests in the UK offshore wind sector or in related supply chains, and 67% don’t believe that UK offshore wind manufacturers can compete with Europe and China.

Capacity issues in the National Grid must also be solved, said respondents. More than one in ten leaders (12%) said that rapid expansion of the electricity grid would make the UK a more investable destination for offshore wind.

In the Autumn Statement, the Government published its full response to the Winser review and Connections Action Plan, aiming to halve the time to build major grid upgrades, backed with £20bn of for 26 projects under the Accelerated Strategic Transmission Investment (ASTI) framework.

But transforming the grid requires the National Grid needs to build five times more transmission lines by 2030 as it has in the last 30 years.  

Dan Parker, partner at Newton Europe, comments: “It has been a good month for the offshore wind sector. The Government has stepped up to resolve the stark issues in CfD pricing ahead of the next auction next Spring, and the Chancellor offered some helpful reforms in his Autumn Statement. As such, the mood since our survey should have lifted somewhat.

“But there’s no denying there’s still a lot of work to do. Energy transition is a relatively young phenomenon, and it’s critical that we invest in the transformation required to remain a centre of excellence on the global stage.”

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