The UK government will miss its 2030 clean energy target without a record number of new licences and £15 billion of private investment every year, according to a new report.
It says that achieving the required 43 to 51 GW of installed offshore wind capacity means the September auction will have to be the biggest ever with more than 8GW of licences awarded.
Scotland has an offshore wind pipeline that includes five projects consented, eight in planning, and a further 22 under development. This places Scotland in the top ten of global offshore wind markets.
However, rising costs and other market challenges make investment in offshore wind all the more challenging, putting additional pressure on delivering Clean Power 30 targets.
The Offshore Energies UK 2025 Wind Insight report, released at the All-Energy conference in Glasgow this morning, says unless the pace of change quickens, the UK stands to achieve only 35GW of offshore wind by 2030.
The National Energy System Operator (NESO) last year set out recommendations to the UK government on the design of a clean power grid by 2030.
With a goal to accelerate progress to net zero by eliminating emissions that currently come from electricity generation, CP30 also aims to ensure that heating, transport and industry sectors are powered by electricity.
The plan sees a huge build out of renewables, including 43-50 Gigawatts (GW) of offshore wind, 27-29 GW of onshore wind, and 45-47 GW of solar power.
OEUK’s wind & renewables manager, Thibaut Cheret says: “Meeting the government’s 2030 target of 43 and 51 GW of installed offshore wind capacity means securing £15bn of private investment in offshore wind each and every year between now and 2030.
“The government’s next Contract for Difference auction in Allocation Round 7 (AR7), which incentivises new low carbon electricity generating projects, will need to secure historic levels of renewable energy procurement. AR7 needs to clear a record 8.4GW of offshore wind capacity to maintain the course toward CP30.”
He adds that more than 50 years oil and gas experience means that the UK supply chain is well-equipped to capture a sizeable stake of the floating wind market,
“But a significant portion of the spend required is beyond the reach of many UK companies, which highlights the need for strategic investment in innovation, skills and infrastructur.” he says.
“Getting this right means the UK can become a market leader in wind power generation and play a major part in delivering a homegrown energy transition.”
Wind power remains a key component of the UK’s energy system, its share for UK’s electricity amounting to 29.5% in 2024. Of that, offshore wind contributed 17.2% of total electricity generation.
Its ability to outperform onshore wind generation relative to installed capacity is down to newer, larger turbines installed off the coast of Britain, where wind speeds are often stronger for longer and efficiency is likely to be higher. This makes offshore wind one of the most attractive of the renewable energy technologies.
Rebuilding the National Grid electricity transmission grid will be a massive task. A grid investment programme of £58bn will be required to support 50 GW offshore wind by 2030.
The report says investment in UK energy should be to the long-term benefit of the UK economy with £65bn invested in UK offshore wind over the next five years. The forthcoming UK industrial strategy should make developing a competitive homegrown energy supply chain equipped to make the most of these opportunities one of its key objectives.
OEUK says there should be a focus on homegrown energy, making the most of UK resources. It says there will be a continued role for gas-fired power generation to balance the grid which should see the progressive deployment of gas with CCS and in due course hydrogen-fuelled power generation.
Interconnectivity will help, it says. A North Sea integrated grid can save £37bn/yr and cut wholesale prices by a fifth and would avoid system duplication.
To get a copy of the report, please visit OEUK’s website here.
Kate Forbes, the Deputy First Minister, told the conference that her government wants to work “in close partnership” with Westminster on “big decisions to be made about energy prices and grid connections” to make sure that “any reforms respect devolved powers but also deliver certainty”.
“We are at a crossroads and the decisions we take, and the opportunities they unlock, are not just notable for what they can deliver in the coming years within our lifetimes, but what they can deliver when we are gone and our children and grandchildren are enjoying the benefits.”
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