UK Chancellor of the Exchequer Rishi Sunak’s Budget announcement has been acclaimed for measures that will help drive growth in the offshore wind industry
Among a number of developments potentially benefitting the offshore wind industry, the Chancellor announced that a new UK Infrastructure Bank would be initiated and capitalised to £12Bn (£5Bn equity and up to £7Bn debt).
The budget also included news that the government will issue its first sovereign green bond – or green gilt – this summer, with a further issuance to follow later in 2021 as the UK looks to build out a ‘green curve.’ Green gilt issuance for the financial year will total a minimum of £15Bn (US$21M). The green bonds will enable investors to buy in to renewable energy projects, accelerating their rate of development, job creation and progress to net zero.
The budget also included £20M to fund a UK-wide competition to develop floating offshore wind demonstrators and help support the government’s aim to generate enough electricity from offshore wind to power every home by 2030.
Measures were also announced relating to offshore wind manufacturing at port locations and quayside hubs of offshore wind manufacturing excellence on Teesside and Humberside, and freeport locations including Teesside, Humber, Felixstowe, Harwich, Solent and the Thames. The Prime Minister’s Ten Point Plan had previously announced that £160M would be made available to support manufacturing and ports infrastructure for the next generation of offshore wind.
Assistance came in the form of an offer of support, in principle, to Able Marine Energy Park on Humberside, following the conclusion of a competition to upgrade port infrastructure for the next generation of offshore wind. The government will also sign a memorandum of understanding with Teesworks Offshore Manufacturing Centre on Teesside to support the development of another offshore wind port hub.
The government will provide £27M, subject to business case, for the Aberdeen Energy Transition Zone, helping to support northeast Scotland to play a leading role in meeting the UK’s net-zero ambitions. It will also provide £4.8M, subject to business case, to support the development of a hydrogen hub in Holyhead which will pilot the creation of green hydrogen from renewable energy.
Responding to the Budget announcement, RenewableUK chief executive Hugh McNeal said, “This is a big-bang moment for offshore wind manufacturing in the UK which will drive investment in a globally competitive domestic supply chain.
“The Government is putting its support squarely behind the kind of strategic approach to securing supply chain investment which the industry has been making the case for during our intensive work with Ministers to deliver the green economic recovery this country needs. This new funding to develop world-class offshore wind hubs in Teesside and Humber is a clear example of levelling-up in action.
“There is a huge opportunity for the UK’s offshore wind industry not only to supply UK projects but also to export to rapidly growing global markets. Today’s new funding for port upgrades and the award of new freeports represent a huge boost to our export ambitions.
“The next wave of renewable projects could inject £20Bn of private investment into the economy and support over 12,000 jobs. Ramping up onshore and offshore wind, alongside hydrogen and other renewables, is the key to unlocking a rapid, low-cost transformation of the energy sector. We therefore welcome the new support for floating offshore wind and renewable hydrogen technologies announced today.”
Co-chair of the Offshore Wind Industry Council and Vattenfall UK country manager Danielle Lane said, “The Chancellor is right to highlight the fact that the UK needs investment in green growth and that offshore wind is an innovative industry in which we have a global competitive advantage. Our sector is working with Government to help deliver a green industrial revolution which will benefit all parts of the country.
“To meet our 2030 target we need to grow our offshore wind fleet four-fold in ten years and that offers a unique opportunity to boost UK manufacturing, particularly in turbine blades, towers, foundations and power cables.
“Our industry is attracting tens of billions of pounds in private investment in new clean energy infrastructure to deliver net zero and boost local economies throughout the UK. We want consumers and communities to feel the full benefit of offshore wind, from low-cost power to local jobs and regeneration. When we host the key UN climate change summit COP26 here in November, we will be able to point to our global leadership in offshore wind as a prime example of how to build back greener.”
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