‘Industry bonus’ for offshore wind will support jobs and low-carbon manufacturing

The application window has opened for the Clean Industry Bonus, which provides financial support for offshore wind developers, on the condition they prioritise their investment in areas that need it most. 

The government particularly wants to see investment in traditional oil and gas communities, supporting highly skilled jobs such as engineers, electricians or welders.

The support also rewards developers who build more sustainable low-carbon factories, offshore wind blades, cables and ports to reduce industrial emissions across the clean energy supply chain.

By encouraging developers to use less polluting suppliers, the bonus will help tackle the climate crisis while also addressing supply chain blockages in renewable technologies driven by Russia’s invasion of Ukraine – supporting industry on the transition to clean, secure, homegrown energy that Britain controls.

The UK wants offshore wind to be the backbone for plans to deliver a clean power system by 2030 and become a clean energy superpower. The bonus will help accelerate the drive for clean power – incentivising developers to build the infrastructure the country needs to end reliance on unstable fossil fuel markets and help keep energy bills down for good. 

Energy Secretary Ed Miliband said, “We are backing our proud manufacturing, coastal and oil and gas communities with good jobs, skills and private sector investment – delivering on the government’s Plan for Change.

“This is our clean energy superpower mission in action, kickstarting growth, delivering energy security and transforming towns and cities as part of the transition – from the ports of Nigg and Leith to the manufacturing hubs of Blyth and Hull.”

Offshore Renewable Energy Catapult chief executive Steve Foxley said the bonus is “an important signal from government to industry” of intent to grow the offshore wind sector in a way that benefits the climate and economy.

RenewableUK chief executive Dan McGrail said initiatives like the Clean Industry Bonus, coupled with industry initiatives to support innovation and the upcoming Industrial Strategy, could drive hundreds of millions of pounds of private investment into new manufacturing.

Energy UK chief executive Dhara Vyas said the Clean Industry Bonus will play an important role in strengthening the contracts for difference mechanism. She said clarity “will be critical” in ensuring the UK can deliver Allocation Round 7 (AR7), which is likely to be the single most important auction to achieving the Clean Power goal.

The bonus will come with an initial £27M (US$34M) per GW of offshore wind projects. That means if developers commit to 7-8 GW of offshore wind, up to £200M of funding could be made available. Funding will be allocated competitively with the results announced by the Energy Secretary mid-year.

The Clean Industry Bonus will apply to all offshore wind projects bidding for funding through AR7 of the CfD scheme, which is the main mechanism for securing clean energy infrastructure for Britain. The funding will come through the CfD  mechanism.

Scottish Renewables head of economics and markets Andrew MacNish Porter said, “Offshore wind represents Scotland’s greatest economic opportunity and the UK government’s Clean Industry Bonus has the potential to help bring vital investment to our domestic supply chain.

“However, the amount of new funding the Clean Industry Bonus will provide for ports and clean energy manufacturing facilities is dependent on how much offshore wind capacity is delivered through the next round of the Contracts for Difference scheme.

“Maximising delivery through AR7 will therefore be crucial for securing benefits for our economy as well as achieving the UK government’s clean energy targets.”