The recent announcement by Siemens to build a new manufacturing plant for offshore wind turbines in the UK is good news for the renewable energy sector in the UK and for DECC. By investing £160 million in wind turbine production and installation facilities in Yorkshire, Siemens will be creating more than 1,000 new jobs in the Hull area. While a number of recent cancellations of large offshore wind farms have taken place, the investment shows that Siemens believes in the policies put forward by DECC to stimulate the growth of offshore wind. The UK already is the biggest market for offshore wind worldwide and the project pipeline is significant with the government’s 2011 Renewable Energy Roadmap expecting to have an installed capacity of 18GW by 2020 and 40 GW by 2030.
This latest announcement indicates that the offshore wind industry is serious about their commitment to increase UK content for future offshore wind farms. In February 2012 the Offshore Wind Developers Forum, a network of developers aimed at discussing common problems facing the industry which was set up by the Crown Estate in 2010 and was jointly chaired by the Minister for Energy and Climate Change and the CEO of ScottishPower, had announced an ambition of 50% UK content for future offshore wind farms. The Forum has now been replaced by a Offshore Wind Industry Council (OWIC). Our research on offshore wind developments in the UK showed that this was a significant strategic move by the sector as the Forum recognised that this was a crucial issue for politicians. Insiders acknowledged that without creating jobs in the UK, the government’s commitment to subsidise offshore wind development would be diminished. As one interviewee put it: “I think it will be a real struggle for [offshore wind] to survive politically if it doesn’t increase its UK content” (Kern, Smith et al 2014 (2014). “From laggard to leader: Explaining offshore wind developments in the UK.” Energy Policy).
The latest announcement by Siemens really illustrates one of our key findings: that the commitment to offshore wind in the UK is driven by a close alignment of economic and political interests of key incumbent actors (incl. DECC, the Crown Estate, large energy companies and utilities as well as manufacturers such as Siemens) which has led to the rapid deployment of offshore wind making the UK the world leader.
The move offshore is circumventing anti-onshore wind protest in the short term and helps meeting the EU 2020 renewables targets in the medium term but at potentially high economic and political costs when the further deployment adds up to a significant impact on electricity bills. However, the announcement by Siemens also hints at the growth and job creation prospects of offshore wind which suggests that the proactive strategy of DECC and the Crown Estate, the Energy Technology Institute and others who are putting significant public resources into stimulating offshore wind may pay off.