Statistics from RenewableUK show that if the government takes steps to maximise the economic benefits of renewable energy, next year’s auctions for contracts to generate clean power can secure over £20Bn (US$25Bn) of investment and create 12,000 jobs, mainly in the construction sector
RenewableUK analysis shows that since lockdown was imposed on 23 March 2020, UK-based companies working in the wind industry have announced contracts and investments in new projects worth more than £4Bn, creating over 2,000 UK jobs at a time when economic activity in other sectors has been shrinking.
The government is due to run an auction in 2021 to secure the next round of new low-cost renewable power. RenewableUK calculates that if Ministers lift capacity caps, the 2021 auction can secure 11 GW of new onshore and offshore wind. This would translate into over £20Bn of investment supporting over 12,000 jobs.
These projects, unlike many other infrastructure investments that have long lead-in times, can ramp up spending quickly once contracts are secured and will generate low-cost power that provides net benefit to consumers. The last contracts for difference (CfD) auction in 2019 secured 5.8 GW of renewable energy capacity at prices below the long-term market price of electricity.
RenewableUK’s new report, Recommendations for a Green Economic Recovery, sets out a range of priorities for government and industry to work on together, to achieve the goals of kickstarting the economy after the Covid-19 pandemic, levelling up economic opportunities throughout the UK and reaching net zero emissions as fast and as cheaply as possible.
“Maximising the development of low-cost renewable power sources will also support a faster roll-out of electric vehicles and the decarbonisation of heating in homes through the installation of electric heat pumps and other low carbon options,” said RenewableUK. “Transport and domestic heating are the two largest sources of UK emissions and decarbonising these sectors is an immediate priority if the UK is to meet our net zero target.
“Supporting innovation and the growth of the UK supply chain is vital to maximising the benefits of the clean energy transition and the offshore wind industry is already investing £100M in the Offshore Wind Growth Partnership, which supports the rapid expansion of companies in the UK supply chain.”
The industry is calling for the government to also provide funding for this initiative, as is the case in other sectors like aerospace. More small and medium firms can be attracted into the supply chain through new grants and business rates support. This will create further export opportunities for our cutting-edge companies.
The report also highlights the opportunity to upgrade UK port facilities to ensure they can handle the giant offshore wind turbines and components now being manufactured, which will grow even larger in the future. At present there are only a small number of UK ports able to accommodate turbines of the size expected within the next five years; investing in upgrading ports will improve the competitiveness of the UK in this global growth industry.
The report further highlights innovative technologies where the UK can be a world leader, such as floating offshore wind and tidal power. The CfD auctions provide an opportunity to support these new technologies which will, for example, allow us to build offshore windfarms in deeper waters using floating foundations. RenewableUK also calls for the government to consider providing tax relief for companies who sign power purchase agreements with marine energy developers.
Devising a hydrogen strategy to accelerate the number of renewable hydrogen pathfinder projects could build a whole new industry in a technology seen as the gamechanger needed to reach net zero. More investment in research and development would unlock further innovation, and this needs to match those of competitor countries such as Germany, the Netherlands, Denmark and Japan.
RenewableUK director of strategic communications Luke Clark said, “The Prime Minister and the Chancellor want to build back greener; putting low cost renewables at the heart of this agenda is a no-regrets option that will get investment flowing into the economy quickly and create jobs.
“Government has the tools it needs to put a rocket under renewable energy projects, which will make it much easier to achieve wider net zero objectives like the switch to EVs and low carbon heating.
“If we can support innovation and strategic investment in our offshore wind supply chain, alongside new cutting-edge technologies like renewable hydrogen and floating wind, the UK can be at the forefront of global growth sectors. The renewables sector is one of the biggest investors in UK infrastructure; boosting that will increase opportunities and employment, particularly in parts of our economy where we need to level up.”
In June, Riviera held a series of webinars on offshore wind. These are available to view in our webinar library