Building an Offshore Wind industry
BIS is due to publish another in its series of 11 industrial strategies, this one for the Offshore Wind Industry. It’s a big challenge to move from where we are now – with as little as 10% of UK content in some projects – to a high ambition, job rich, exporting industry. Government is resisting industry calls for a 2030 carbon target, and the sector still bedevilled by skills shortages. So here are three key tests for a sector which could prove what many believe, that instead of green investment being a trade off to growth, it is the key to a sustainable economic recovery.
First test: clear long term policy signals. Leading manufacturers have alluded to the lack of clear signals out to 2030 as affecting future investment. Plans for major dockside turbine manufacturing plant have been stalled.
Current UK employment (16,000) could double in seven years under a high ambition vision for the industry. The key driver to date is the UK’s obligation under the EU Renewable Energy Directive to generate 15% of energy from renewables by 2020 – meaning 30% of electricity from green sources, led by offshore wind. The government has resisted setting a 2030 carbon reduction target in its Energy Bill, and opposes a new, 2030 Renewable Energy target at an EU level as “inflexible and unnecessary …our reforms will rely on the market and competition to determine the low carbon electricity mix.” Is this aversion to targets sending a strong and long term enough policy signal for an industry that may be looking over an investment cliff in 2020?
|UK company supply chain||790|
|London Array – overall||10%|
|Robin Rigg – capital||32%|
Second, Skills: “The supply of skills is already acting as a key constraint to the scale of economic benefits that the UK can capitalise on from wind and marine energy,” according to an assessment two years ago by RenewableUK . “Should the sector develop as rapidly as we anticipate, recruitment problems and skills shortages could become even more manifest if urgent action is not taken.” The current training landscape is a complex of networks, programmes, institutes and academies. In 2012, the Green Economy Council commissioned a study of skills for a low carbon economy, in part in response to calls for the TUC and its affiliates in the industry. But this has not appeared. It is vital that the social partners – employers, unions, trainers, government – work urgently together to develop a skills strategy for this sector.
Finally, taking a whole-system approach to industrial policy, which implies not shying away from an active and risk-taking role for government. Current systems “risks” include: the UK is a net importer of offshore wind turbines. The apparent disconnect between the UK steel and cement industries and the wind tower sector. Tier 1 developers are foreign owned, for whom the UK is inward investment, meaning new plant, new supply chains. Projects are disaggregated, not bundled into large, long term investment opportunities, as an offshore wind finance paper to the Green Economy Council suggested. Our ports as sites for new turbine plant are privately owned, unlike our competitors. And lack of skills as a barrier to growth. As Mariana Mazzucato suggests, a policy nudge here, a support for a piece of innovation there, whilst welcome per se, may not deliver the high ambition prize.
With 11 unemployed people chasing every job in Hull, the successful opening of a 700-job turbine plant on Hulls docks, with local training provided, contracts sealed with UK steel and cement and other suppliers, would look like success.