By: Pritil Gunjan
According to recent announcements, UK Prime Minister Boris Johnston has unveiled an economic recovery policy package, Build Back Greener, intended to create jobs, slash carbon emissions, and boost exports. A large portion of the Build Back Greener vision relies on the UK’s offshore wind industry, with plans for the UK government to invest £160 million (~$208 million) to eventually convert ports and infrastructure into renewables manufacturing hubs.
UK Wind Power Has Been Steadily Building
Since the early 2010s, the UK has been steadily developing its wind power sector. In 2015, the renewables obligation certificate (ROC) policy shifted to the contract for differences (CFD) system, which primarily facilitates offshore wind developments. The success of UK offshore wind hinged on the industry achieving offshore cost reductions by 2020; strike prices through the CFD system realized offshore prices that were challenging but manageable.
Between 2018 and 2020, UK wind generation reached new heights with reports of the country’s wind farms supplying more electricity than eight of its nuclear power stations combined. At one point, wind energy was providing as much as 50% of the UK’s electricity. According to Guidehouse Insights’ recent Global Wind Database update, the UK’s investment in wind power is estimated to reach nearly $3 billion and is expected to install more than 1 GW by the end of 2020, reaching a total cumulative capacity of 24.3 GW. Offshore wind is expected to increase from 9.7 GW in 2020 to nearly 26.4 GW by 2030.
Harnessing Offshore Wind Is Vital for UK’s Green Goals
If Johnston’s plan is successfully implemented and the government resolves permissions and licensing hurdles, offshore wind installations could reach 40 GW by 2030. In the previous auctions, the UK government had limited the amount of renewable energy that could win a subsidy contract to encourage developers to lower their costs. In the new plan, the government needs to produce measures that will reiterate that the country is taking its net-zero target seriously as it prepares for the UN climate talks, COP26, which will be held in Glasgow in 2021. Assessing the best green build option for UK with strategies to harness its offshore wind will be vital for the industry to scale up and reach its full potential in the long term.