Chamber hails Offshore Sector Deal

The UK Chamber of Shipping has hailed the Offshore Wind Sector Deal as an ‘exciting new phase’ for the offshore shipping sector.

The Sector Deal, announced in March 2019, is a collaboration between the UK Government and the offshore wind energy sector, and seeks to build on the significant advances already made in developing offshore energy capacity.

The UK has the largest installed capacity (7,899 megawatts) of offshore wind in the world and is expected to deliver 10% of the country’s energy needs by 2020. There are more than 430,000 jobs in low carbon businesses and their supply chains, employing people in locations right across the country and 7,200 are directly employed in offshore wind.

The announcement seeks to build substantially on this progress in four key ways:

1.       Providing forward visibility of future Contracts for Difference rounds with support of up to £557 million, with the next allocation round planned to open by May 2019, with subsequent auctions around two years thereafter.

2.       Committing to increase UK content to 60% by 2030, including increases in the capital expenditure phase.

3.       Seeking to increase exports fivefold to £2.6 billion by 2030.

4.       Investing up to £250 million in building a stronger UK supply chain, establishing the Offshore Wind Growth Partnership (OWGP) to support productivity and increase competitiveness. With the largest installed offshore wind capacity in the world and the prices consumers pay for the energy the sector generates falling significantly (between the 2015 and 2017 Contracts for Difference auctions, support costs fell 50%), a trend that is expected to continue.

Katrina Ross, Policy Manager at the UK Chamber of Shipping said:

“Ships which construct, service and decommission offshore windfarms are a fundamental part of the supply chain, and it is clear that this Sector Deal marks an exciting new phase in the development of the UK’s renewable energy capacity.

“Government has rightly committed to ensuring 60% of the supply chain for offshore wind farms will be provided by British firms, ensuring both the UK shipping industry and the UK economy will benefit from the deal.

“Further development of the UK’s offshore windfarm capability will require support from highly innovative companies.  British companies, many of whom are investing heavily in technology such as autonomous vessels, will be well placed to successfully bid for future contracts.

“This Sector Deal dovetails well with both the UK Government and UK shipping industry’s aims that are set out in Maritime 2050 and the UK Clean Growth Strategy.

Further information can be found on the Sector Deal here.