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  • Writer's pictureDeclan Turner

How Government can support economic gains from offshore renewable energy

The UK is a global leader in offshore energy, with 11GW of installed capacity from mostly fixed bottom offshore wind farms. The UK renewables sector continues to develop and to innovate, whilst the climate and marine conditions (steady wind, shallow seas, and large tides) around the UK are a natural opportunity for renewable energy to flourish. With this comes the potential for substantial economic benefits that can be realised if the opportunities presented by the sector are taken forward.

Developments such as the recent consent granted for Erebus, the first floating offshore wind farm in Wales demonstrate how the UK maintains its global position within the offshore renewable energy sector. This scheme should see the start of more floating offshore wind farms being deployed in the Celtic Sea alongside other marine energy technologies around Wales and the UK.

Offshore renewables: policy context in the UK.

The Clean Growth Strategy, and more recent Net Zero Strategy, make clear that the UK will need to significantly expand its use of renewable energy, and particularly wind energy to develop a low carbon economy. The British Energy Security Strategy sets out targets for 50GW of offshore wind by 2030 while in Wales the National Plan sets out how the country can realise its potential through a transition to a sustainable future while underpinning greater equality and prosperity aligned to the pivotal Wellbeing of Future Generations Act.

Though these targets are helpful in providing a focus, there is more that the Government could be doing through policy and incentives to encourage and facilitate the development of offshore renewable energy projects around the coast of the British Isles.

Creating the conditions to support benefits from the offshore renewable sector.

Wavehill has been working with a range of clients on different schemes that either directly deploy offshore renewable energy or that support innovation within the sector. Consequently, we are developing an appreciation of the common challenges the sector face and barriers to realising benefits for the UK.

Challenges in deploying offshore renewable energy.

One of the biggest challenges for realising local economic benefits is the nascent supply chain in the UK to support the delivery of projects at scale. Ports closest to the suitable locations for many offshore renewable energy technologies need to receive substantial investment in order to be able to support construction and deployment. Offshore fixed bottom and floating wind farms require substantial lay down areas and assembly space for the turbines and floats, while docks and quays are required for the deployment of marine technology solutions.

Another key challenge to realising economic benefits in rural and coastal areas of Wales and the UK is a lack of grid connection and the requirements for serviceable connections to development sites. Greater investment from Government needs to be made to help ensure that grid options make more sites feasible to create jobs and benefits in these peripheral locations.

Challenges to support skills and innovation

Wavehill has conducted several socio-economic impact studies for potential fixed and floating offshore wind projects and this work has highlighted the requirement for skills development in coastal communities to support these projects.

Several developers have begun to establish relationships with colleges and universities in places like North Wales and Devon to support course development and learning, but the lead time to secure seabed leases, design and get projects through planning and then built means that developers cannot provide the demand for large numbers of apprentices and graduates. This risks the skills not being available to meet future demand and Government support is needed to both accelerate development approvals and to prime education and training for this low carbon transition.

Many of the skills required in offshore renewables are transferrable from the oil sector and from working on rigs. This could provide a transition opportunity for many who work in the North Sea oil and gas industry.

Our evaluation of the Marine Energy Engineering Centre of Excellence for the ORE Catapult has demonstrated the impressive gains being made from innovation in the sector, but also clearly highlights the difficulties of the funding landscape for such projects, especially as ERDF, Interreg and Horizon funding ends. This has also had implications for the university and research sector which does much to support these developing industries and is also struggling to recruit research staff who had been coming from the EU. Replacement funding is needed to continue to support research and development for a domestic supply chain to grow.

Potential socio-economic benefits

If these challenges were to be overcome and the targets set by Government achieved, there is the potential for substantial economic impact. Offshore wind is anticipated to create over 31,000 jobs in the UK by 2030 directly and through supply chains, with 22,000 jobs in marine energy by 2040. Importantly, many of these jobs and the Gross Value Added that they will generate will be in coastal communities, often in areas of the country left behind by other developments.

Some of the job benefits from the growth of the offshore industry will be in other sectors of the supply chain. Large amounts of high value manufacturing is required not only for the renewable energy technology being deployed but also in the equipment and vessels needed to service the projects. Environmental specialisms are supported as well as high value engineering roles and foundation economy jobs in construction, transport and digital.

There are lots of opportunities in offshore renewable energy beyond just meeting the UK’s net zero targets. Local economies can be supported, particularly in peripheral coastal regions which are some of the areas that need the most “leveling up”. High value jobs can be created, and skills can be improved or retrained from other sectors, potentially avoiding structural unemployment. To achieve this, the right conditions need to be fostered with support from all levels of Government, targeting this growth area and investing to achieve the targets set.


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