News, Offshore, Opinion & Commentary, Wind Power

Embracing opportunity in the UK’s growing offshore wind sector

Offshore Wind

In the UK, the past few years have seen an increase in an array of extreme weather events. Hotter, drier summers and wet, stormy winters are placing more strain on our energy infrastructure and our vital industries. Back in 2018, The Environment Agency estimated that the economic damage of the 2015-16 winter floods (the most extreme flooding on record at the time) was around £1.6 billion. This spring, heavy storms have thrown light on the direct effect the climate crisis is having on our environment as it’s effectively forced into ever-sharper definition. The need to move away from our dirty’ fossil fuel power sources towards low carbon solutions has been thrown into greater relief.  

Climate change is (still) an energy problem 

Although the UK and its like-minded international allies have been working towards targets to limit global warming for many years, the Intergovernmental Panel on Climate Change has agreed that our definition of a ‘safe’ limit of climate change needs to shift. Going forwards, 1.5oC is the absolute maximum that can be mitigated in order to prevent numerous low-lying countries (such as the Netherlands) from being inundated as sea levels rise.  

But seeing the climate crisis without also recognizing the economic opportunities of building a more sustainable world would be a mistake. While we face significant challenges to limiting our greenhouse gas emissions, the UK is ideally placed to taking a leading role in a new emerging ‘green economy’. This is where the windy weather of the British Isles comes into play… 

The UK energy sector has already made significant strides towards decarbonizing. However, the UK is now the first country which has committed to achieve net zero emissions by 2050 – meaning that the government will need to rely on offshore power in their strategy to reach this goal.   

To achieve this, the renewables sector in the UK is growing fast, supported by both private investment and the government’s introduction of Contracts for Difference in 2014-15, which have been successful in incentivizing renewables projects by protecting businesses from volatile wholesale process and guaranteeing a reliable return on investment. According to Renewable UK, the UK’s current operational capacity from onshore and offshore wind is over twenty two gigawatts. This is enough energy to power almost 16 million homes. Offshore wind already contributes a significant part of our renewable energy with 8 GW installed, a figure which is forecast to increase to 30GW in 2030 and 75GW in 2050, with several new project auctions in the works.   

While this target sounds ambitious, innovations both at home and in the global markets are supporting this boom in offshore wind power. The size of turbines is increasing and the number of ongoing projects in the UK is scaling rapidly, leading the cost of investment in the sector to drop by approximately 40% in just the past two years. As a result, the cost of the electricity generated becomes more affordable, projected to drop below electricity wholesale prices in 2024.  

But the unpredictable nature of wind energy supply still poses an obstacle to weaning our grid off ‘switch on’ energy sources. Built for a traditional one-way power flow in a passive network, our grid is working on building up the digital capacity required to manage the new reality of distributed renewable energy generation.  

Currently, the flow of data in our power grid is inconsistent across the country. Forty percent of the power generated through renewables in the UK goes directly to Distribution Network Operators (rather than the Transmission Network Operator). This creates a major obstacle for National Grid to embrace active energy management and balancing the grid’s load effectively, something which is essential to incorporating the variable output of renewable sources into our energy mix to deliver a reliable supply for both consumers and industry. Data is fundamental to the future of our power sector’s economy to unlock system and consumer benefits, flexibility, resilience and costs in the most efficient way. 

In addition to improving reliability of the UK power supply, keeping up with innovation in the offshore wind sector is the best way for the UK to maintain its lead in this field. As the floodgates open to both domestic and international investment, we have a significant opportunity to set the world standard in grid connectivity. Already seen as the ultimate test in safety and reliability for the nuclear and power station industries, the UK will be a key case study for other countries looking to upgrade their legacy grid infrastructure in order to integrate a higher proportion of renewables and start managing their energy supply in a smarter, more connected way.