UK OW Content Target Challenge Due to Cost-Cutting Pressure

Having 60% of UK offshore wind content provided by local firms is challenging due to constant pressure to cut costs, according to Seacat Services’ Managing Director, Ian Baylis.

Baylis gives the example of Scottish manufacturer BiFab which has reportedly lost a major offshore wind contract to yards in Belgium, Spain and the United Arab Emirates.

“The drive to increase UK local content in offshore wind is admirable, and it’s essential that UK firms throughout the supply chain benefit from planned growth in the sector. However, the news from BiFab shows just how much of a challenge it will be to hit the 60% target,” Baylis said.

According to Seacat Services’ Managing Director, the concept of UK local content appeals to everybody in principle, but the industry is under pressure to cut costs across the board to bring down the levelised cost of energy (LCOE).

Ultimately, when it comes down to procurement decisions, financial targets still come first, even if it means sourcing components, services and labour elsewhere, Baylis claims.

“The industry needs reassurance that this renewed commitment to UK local content is more just than a PR exercise, and delivers tangible benefits to British firms as new construction activity continues to escalate in the offshore wind sector,” Baylis concluded.

To remind, the UK recently launched the new joint government-industry Offshore Wind Sector Deal which will see offshore wind reach the connected capacity of 30GW and deliver one-third of the UK’s electricity by 2030.

The number of jobs in the industry is expected to rise from the current 7,200 to 27,000 by 2030, while the deal also includes a GBP 250 million growth partnership to develop the local supply chain as global exports are set to increase fivefold to GBP 2.6 billion by 2030.