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Offshore Wind Sector Deal

Volume 655: debated on Thursday 7 March 2019

As part of the industrial strategy, the Government are committed to continue to work closely with the offshore wind industry to further drive down the costs of clean power, while building a competitive UK supply chain.

Offshore wind is a huge UK success story, with the world’s largest offshore wind market and 8 GW of operational capacity (rising to 14 GW by 2023). Long-term Government support has underpinned growth and technological innovation in the sector, leading to significant cost reductions and resulting in offshore wind becoming one of the cheapest low carbon generation sources.

As a key part of our modern industrial strategy, sector deals bring industry and the Government together in partnership to boost productivity and earning power in specific sectors. The offshore wind sector deal sets out an ambitious partnership between Government and industry that will ensure the UK continues to play a leading role in the global market for offshore wind, and that UK companies capitalise on the opportunities of this growing export market; delivering on the industrial strategy’s clean growth grand challenge.

The development of the deal was led by the Offshore Wind Industry Council in close engagement with offshore wind developers, major equipment manufacturers, the wider supply chain in the UK and local communities with an interest in the success of the sector. This reflects on the excellent existing collaboration between the industry, the UK Government, and local, regional and devolved partners, who supported the formation of this deal. It follows ambitious sector deals with the life sciences, automotive, construction, creative industries, artificial intelligence, nuclear, aerospace and rail sectors.

The deal will build on the United Kingdom’s global leadership in offshore wind by growing the UK supply chain, increasing its competitiveness and productivity, taking advantage of new technology and developing the innovative products and services needed in the future. It will do this by:

Providing forward visibility of future contracts for difference auctions with support of up to £557 million, with the next auction to open by May 2019 and subsequent auctions around every 2 years thereafter1.

The sector committing to increase UK content to 60% by 2030, including increases in the capital expenditure phase.

Increasing the representation of women in the offshore wind workforce to at least a third by 2030, with an ambition to reach a higher figure of 40%.

Setting an ambition of increasing exports fivefold to £2.6 billion by 2030.

The sector investing up to £250 million of funding to establish a new offshore wind growth partnership to work with UK businesses and SMEs to address the UK’s productivity gap, increase business competitiveness, drive supply chain innovation and support the UK’s export drive.

Working to integrate offshore wind to support grid integration, such as co-located storage and wind to hydrogen.

Furthermore, the deal aims to bolster regional clusters in alignment with the industrial strategy’s aim to support prosperous communities throughout the UK. The offshore wind sector will continue to co-ordinate its approach and work with local, regional and devolved Governments and their economic development agencies to build on the opportunities created by this deal, through local industrial strategies in England, and city and growth deals across the UK.

Constructing up to 30 GW of offshore wind by 2030 and boosting exports to £2.6 billion per annum will bring new jobs and economic growth; the sector expects to grow its skilled workforce to 27,000 by 2030, creating opportunities across the UK. The sector aims to employ women as more than a third of its workforce by 2030 and a stretching ambition will be set for raising BAME representation, with the sector committing to initiatives for including people with diverse backgrounds, perspectives and needs, which include age, ethnicity, education and other abilities.

This deal will support the offshore wind industry into the next phase of its development as a world leading industry. I will be placing a copy of this document in the Libraries of both Houses.

1 Depending on the prices achieved, this could deliver up to 30 GW of offshore wind by 2030.