Offshore Renewables Could Bring GBP 6.7 Bln to UK Economy

Offshore Renewables Could Bring GBP 6.7 Bln to UK Economy

The UK economy could gain £6.7bn per year and 150,000 jobs by 2020 from the development of offshore renewable energy resources, according to a report published today by the Offshore Renewable Energy (ORE) Catapult.

The report, using extensive supply chain data from BVG Associates and analysis from the Fraser of Allander Institute, considers the likely economic and industrial growth from upper and lower estimates (8 – 15GW) for the deployment of offshore wind farms under two different sets of conditions: a "gradual growth" path similar to existing market conditions and an "accelerated growth" path which drives cost reduction and quality improvements through innovation and investment.

In the accelerated growth path for 15GW of offshore wind capacity, Gross Value Add (GVA) to the UK economy can reach almost £6.7bn in 2020, with 150,000 jobs in total in the wider UK economy. At the lower end scenario of 8GW installed in 2020, GVA can reach £2.3bn in 2020, with 50,000 jobs supported in total.

Commenting on the report, ORE Catapult chief executive Andrew Jamieson said: "The UK is in a strong position today, leading the world in both deployment and ambition for offshore renewable energy. We have the industrial base, research capability, regulatory framework and supply chain to continue to prosper and lead.

"This report clearly demonstrates the significant potential economic value of offshore renewables and why it is worth the investment now to develop and grow sustainable industries delivering energy from our offshore natural resources."

Opportunities are identified in the report for the UK to develop world-leading capability in the development, manufacture and deployment of specific areas of offshore renewable energy technology, including manufacturing of turbines, foundations, cabling and substations, and crucially the expertise in installation, operations and maintenance.

It is in this area that the Catapult sees the biggest long-term opportunity for the UK. The accumulation of the know-how in the effective operation and maintenance of offshore renewable technology will provide an exportable service industry similar to that achieved by the oil and gas industry over recent decades.

The report also considers the impacts of the development of wave and tidal technology, whilst recognising that these remain in their infancy and will be relatively minor contributors to a sustainable UK energy mix until beyond 2020. However, they are expected to become increasingly significant over the following decade.

Jamieson added: "Technology innovation and a deeper understanding of working offshore are the key enablers that will deliver essential reductions in the costs of offshore renewable energy and help us capture significant economic and social benefits." 

Press release, March 13, 2014; Image: hi-energy