UK Offshore Wind Attracts Investments

Laxman Pai
Monday, August 12, 2019

Power companies including Ørsted, Vattenfall, Innogy, SSE and Scottish Power and financial investors such as infrastructure and pension funds are active in UK offshore wind power, said Deloitte.

Japan, China and other countries in Asia are also showing increasing interest in the market, it said.

With natural advantages including a long coastline, high wind speed and areas of shallow seabed providing desirable conditions for the construction of large offshore wind farms, the UK is the world's leading offshore wind power market.

There is 7.9 GW of offshore wind capacity in the UK already and the government has set an ambitious target of over 30 GW by 2030. Accounting for 14.7% of the total power generation, offshore wind power has seen substantial growth in the UK.  

"With sophisticated regulation to support efficiency and encourage competition, the highly open and transparent UK power market has become one of the most attractive destinations for overseas investors. The market is transitioning towards a cleaner energy mix, with the UK recording one week of coal-free power generation this May and planning to phase out coal-fired power plants by 2025," said Deloitte China Energy, Resources & Industrials Industry Leader Kevin Guo.

Kevin added: "Offshore wind power is increasingly important in the energy mix. UK practices and policies could inform Chinese companies' faster expansion of offshore wind power at home, significantly driving energy mix transformation and local economic structure upgrades."
 
An offshore wind farm can operate for 25-45 years and goes through several stages before starting operation. In the UK, these stages are seabed leasing, planning consent, generation license application and a contract for difference (CfD) auction. The UK's rigorous and complex procedures and market mechanisms can be challenging for new entrants.  

"The UK's offshore wind sector leads the world in capacity and technology. We can see from previous CfD auctions and the strike price in the third CfD round that the industry is extremely confident about reducing generation cost from offshore wind sources. This will help offshore wind power go from niche to mainstream," Kevin added.

Categories: Wind Power Renewable Energy Europe Research Investment Offshore Wind

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