Wind sector deal marks ‘welcome change’ in tone from UK Government

Minister of State for Energy and Clean Growth, Claire Perry, arrives in Downing Street, London, for a Cabinet meeting. PRESS ASSOCIATION Photo. Picture date: Tuesday November 13, 2018. See PA story POLITICS Brexit. Photo credit should read: Victora Jones/PA Wire
Minister of State for Energy and Clean Growth, Claire Perry, arrives in Downing Street, London, for a Cabinet meeting. PRESS ASSOCIATION Photo. Picture date: Tuesday November 13, 2018. See PA story POLITICS Brexit. Photo credit should read: Victora Jones/PA Wire
Opinion by Derek McCullochHead of energy and projects at Gillespie Macandrew LLP

Today the UK Offshore Wind Sector welcomed the new sector deal with the UK Government.

Essentially a contract between the sector and governments encompassing commitments (by the industry to invest £250m in the Offshore Wind Growth Partnership and by the Government to fulfil its already promised but gradual clean power auctions feeding £557m over a 10 year period) and ambitious targets (30GW offshore wind built by 2030 representing 30% of British electricity generation) but predicated upon lowering costs to the consumer.

This marks a welcome change in tone from the UK Government, moving towards the very supportive tone and already published strategies of the Scottish government for many years – and it would have been good to see more Scottish examples used.

As deeper offshore fixed and floating wind ventures are now being pursued off Scotland we should see a catch up with the huge shallow water development predominantly in England to date.

There is much to analyse in this deal which has relevance to other sectors of the UK Economy.

In particular the need for around £40bn of infrastructure investment to deliver these ambitious targets, not least in grid lines and connections onshore, (mainland and remote islands) and offshore seabed cables, but also in the need to integrate storage at scale in the grid and local smart grids utilising a mix of energy sources.

The impact on existing land uses and infrastructure will require careful planning and management, as will the further release of seabed areas by Crown Estate Scotland.

This sector deal must also be coupled with wider UK energy policy and we are yet to see if marine renewables and hydrogen gas grid ventures can assist at a scale that will complement and even reduce dependence upon new nuclear and carbon capture gas plants both yet to be developed.

Support for free onshore wind and hydro storage projects must also be facilitated within this mix.

Further, there is clear international ambition here to benefit and grow the supply chain companies across the UK, not only in the increased 60% UK content requirement, but also the export target of £2.6bn by 2030.

Coupled with the Offshore Energy Passport to be offered to offshore workers enabling freedom of movement across all offshore energy projects oil, gas and renewables, this creates a welcome prolongation of the UK offshore sector and its UK supply chain as a world class centre of excellence.

Jobs and clean economic growth are at the heart of the BEIS industrial strategies, and there is a welcome commitment to encourage more women into the sector.

The education sector will be encouraged and assisted to develop training centres to meet the skills and labour required.

Finally the £4m support for technology partnerships with Asian developing nations to assist them to decarbonise energy generation will hopefully foster international ambition within our smaller but high quality supply chain in particular consultancy and design.

GMLLP Energy and Projects sector group includes 6 partners and 25 personnel in Edinburgh Glasgow and Perth providing energy, planning and infrastructure legal advice and project management to UK wide developers and investors, supply chain, and affected landowners.

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