A new report confirms that there should be very strong future growth for renewables in the UK, but it highlights an overall gap between what is achievable under existing circumstances and the Renewables Advisory Board central estimate scenario target of 7.6GW (Gigawatts).
This gap mainly arises from slow progress in the development of the offshore wind sector, where “major supply chain, infrastructure and market issues must be faced”, according to Douglas-Westwood, which prepared the report for BERR. Basically, Supply Chain Constraints on the Deployment of Renewable Electricity Technologies seeks to inform civil servants at BERR about the current and anticipated future supply chain’s capability of meeting the target for renewable electricity generation.
Douglas-Westwood (DWL) was asked to “quantify likely market growth between 2008 and 2020 and to determine both the present status of the supply chain and how it will grow towards supplying the future demand that the EU target represents”.
According to the report, the UK is expected to instal significant levels of offshore wind by 2020, with 10GW of new capacity being added. After the leading “Round 2” projects are built, a lull in activity is forecast before the first of the “Round 3” projects is completed.
With seven to nine-year development timelines at present, long-term vision is required for the industry to react sufficiently well to allow capacity to be brought online before 2020. The recent launch of Round 3 will deliver greater confidence in the long-term potential of the UK’s offshore wind industry.
The study analyses constraints on expansion of the current supply chain, including components, materials, skills and installation capacity, and provides an overview of employment and economic benefit from renewable energy and how this might increase by 2020. It also refers to other potential obstacles to renewables deployment, such as grid and planning.
As Energy has commented before, it is well understood already that the UK wind sector supply chain is virtually non-existent.
Indeed, the report says that all sectors must be developed. However, given that grid constraints are set to limit onshore wind, that wave/tidal are still embryonic technologies and that biomass faces major feedstock supply and logistics problems, then to meet the 2020 target would suggest increased focus is needed on addressing the issues slowing development of offshore wind in particular.
DWL also says that the macro issues being faced by the UK renewable energy sectors, such as skills shortages and inflated materials costs, are common to many other industries, but that other countries can offer more attractive markets for the manufacturer. It also takes the view that large-scale grid-connected renewable energy generation is different in that many of its sectors are relatively new and require long-term investments. The expected new capacity will have significant economic impact and offers considerable supply-chain development opportunities for the UK.
In key sectors such as onshore and offshore wind, supply-chain constraints at an international level present opportunities for new market entry and diversification.
Although the report is not geographical in nature, it is easy to interpolate in terms of Scotland’s position, where perhaps tidal and wave energy technologies provide a particular opportunity.