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Government action could release £2.5bn of wind industry private investment into UK economy

Governmental action that could release £10bn of private sector investment, £2.5bn of which would be spent direct in the UK on installation and construction work, was outlined in the report: Powering a Green Economy: Wind,wave &tidal’s contribution to Britain’s industrial future published today by British Wind Energy Association.

The British Wind Energy Association wants to see the government encouraging funding from sources, such as the European Investment Bank, for schemes struggling to raise project finance; underwriting the energy floor prices in generator-supplier contracts; socialising offshore grid costs and increasing the offshore Renewable Obligation Certificate multiple.

It says the actions, outlined in the budget, would provide an immediate economic stimulus to the UK economy and pave the way for the creation of a £65bn British wind and marine energy sector by 2020.

“The UK has a £10bn pipeline of shovel ready wind energy projects that are being held up by current economic conditions,” said British Wind Energy Association Chairman Adam Bruce.

“If the government takes the right action in the budget tomorrow it can release this private sector investment, which will both provide an immediate boost to the economy and build the supply chain to deliver the next generation of offshore wind – with all the new employment opportunities that will present.”

There are approximately 2GW of offshore schemes (worth an estimated £6bn) ready to be built and a further 3GW of onshore projects (worth £4bn) which could be operating within the next 2 to 3 years.

Today’s report also calls on the government to take steps necessary to deliver on the long-term industrial opportunities presented by the expansion of offshore wind over the next decade, such as:

  • Strategic support to develop ‘wind industrial hubs’ of research institutes and factories for manufacturing and operations suppliers
  • Long term investment in infrastructure such as a new offshore grid network, local ‘smart’ grids and upgraded port facilities
  • Action to tackle the skills shortage in the power sector, with the creation of 2,000 new renewables apprenticeships a year

While only 1% of the existing world wind market is offshore (some 1.5GW of generating capacity), up to 40GW of new sites will be developed in European waters over the next decade. At least half of those sites will be in the UK, creating a tremendous new opportunity for UK based manufacturing, installation and operations jobs.

The British Wind Energy Association analysis of the industry demonstrates that at least 20GW of UK offshore wind projects are deliverable by 2020. Together with onshore development this would create a £65bn UK wind sector within a decade. Up to 60,000 UK based jobs could be created in the new sector, if the plant needed to supply the industry is located in Britain.

“There is now a wide consensus over the industrial potential offered by wind and marine renewables,” said Bruce. The private sector is willing to invest billions to deliver a low carbon economy, and looks for further partnership with the government to clear the short and long term obstacles to investment.”

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