Public procurement, offtake guarantees could maximise domestic steel in UK windfarms 

“This volume poses an immense opportunity for the UK steel industry to meet domestic demand,” said LumenEE. “Demand is concentrated in high-volume components, such as towers and monopiles, which alone represent over half of the total steel demand. The offshore wind supply chain is clearly a growth sector, and this will be the last chance for the UK to capitalise on it.”

UK Steel and LumenEE believe if the UK is to make the most of the huge expansion in offshore wind in the coming decades, strategic investment alongside primary fabricating capacity will be needed, and the investment case will require a public procurement policy that guarantees the offtake of these domestically produced materials and components. “Through a government industry partnership and a carefully designed procurement policy, offshore wind could be one of the greatest success stories for this government,” said LumenEE.

UK Steel says the government should use the contribution the domestic steel industry makes to national security to mandate or incentivise the use of UK-made steel, where possible, for projects, using domestic content stipulations in contracts where public funding or subsidy is involved. It also believes in future offshore wind auctions, the government should evaluate bidders’ contributions to sustainability, resilience and local content, with these criteria applying to at least 30% of the volume auctioned annually, as the EU is currently implementing without challenge in its Net Zero Industry Act.

To enable the UK to provide the massive quantities of steel needed by the offshore wind industry, UK Steel suggests a public-private partnership should drive investment into steel supply chains, which will attract inward investment, create jobs, drive economic growth, and ensure the UK develops resilient supply chains in the face of uncertain geopolitics.

“To make the most of the opportunity stemming from national infrastructure spend, the government needs to work in partnership with industry and trade unions to fully understand future demand for steel and maximise its value to the UK economy,” UK Steel said. “We also need to fully understand the sector’s ability to meet that future demand – both now and with promised government investment. Crucially, it said, the UK needs a vision of what role the steel sector can play in its economy and develop a public procurement plan as part of its Steel Strategy – which will examine how the government can increase steel capacity, identify gaps in capability, assess future UK steel demand and help to inform investment decisions – to achieve that vision.

“It will be important to understand in detail what size of plate UK mills can supply, how early adoption of technologies such as laser welding and electron beam welding can help match existing UK plate with offshore wind needs, and what investment in new plate rolling and casting capacity is required,” said UK Steel. “And it is important to emphasise the importance of co-ordination between UK offshore wind developers, OEMs, fabricators and UK steel providers to align the forthcoming Steel Strategy with the existing Industrial Growth Plan.”

Offshore wind has demanding plate requirements, and there are few mills globally that can supply into this market, creating potential supply bottlenecks. “Given the size of the UK pipeline, this offers an opportunity,” UK Steel said. “In the short term, the UK needs to be an early mover into the use of new welding technologies like laser welding and vacuum welding that enable high-quality rapid welds to be made, including the ability to join smaller plates together into larger sizes.

“In the medium term, the UK needs to use the Steel Strategy to focus in on investment opportunities for new caster and plate rolling capacity to supply plate into the offshore wind market, alongside other strategically important sectors such as defence.”

If the UK steel industry is to capitalise on the massive opportunity offshore wind represents, the UK needs to move swiftly to build out new mill capacity to be ready to supply the market, UK Steel and LumenEE state. As it UK Steel also notes, the UK’s rapid decarbonisation of its power sector – thanks in large part to offshore wind – offers a route to greener steel, and the UK’s shift to electric arc furnaces powered by a low-carbon power mix puts the UK towards the front of the pack in nations able to offer greener steel to the market.

“This opens up potential for a virtuous circle of offshore wind powering UK furnaces producing steel for UK fabricators producing components for windfarms,” UK Steel concludes.

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