Introducing our Offshore Wind for 2050 series - it’s all about coordination.

Complete Strategy publishes a new series on the future of offshore wind in the UK. 

Offshore wind is one of the UK success stories of the past twenty years.

We now have the largest installed offshore wind capacity in the world, with c.14GW of installed capacity – 30% of the global capacity.

The output produced by offshore wind has recently broken records – up to 21GW, half of Britain’s power in January 2023. At the same time, offshore wind has become a cheap source of energy, cheaper than new nuclear power.

The Government’s continued enthusiasm for offshore wind is therefore not surprising. The target of reaching 50GW of offshore wind capacity by 2030, and 100GW by 2100 is a tremendous opportunity for the UK. Beyond Net Zero, it will support economic growth, creating thousands of jobs and contributing to the Government’s levelling-up agenda. It will also be a considerable industrial and economic challenge, to which current industry arrangements and regulation are potentially ill-adapted.

The global offshore wind industry has been driven forward by the UK. But, as Tim Pick said in his recent "Independent Report of the Offshore Wind Champion" - if we are to keep our leading position "we need to maintain our focus on the competitiveness of the UK’s offer to Offshore Wind investors in an age of increasing global opportunities, whilst also recognising that the costs of our electricity system are ultimately borne by consumers".

To date, the success story has been built on a series of discrete investments, managed individually. Developers could build their wind farms and would then design and build their own individual connections to the network– through a radial connection. This can be suboptimal given that there is no coordination to allow several wind farms to use the same assets to connect to the onshore network. The lack of coordination also means that wind farm generators usually seek the closest point of connection to the onshore network, regardless of local network capacity and constraints.

With expectations of future offshore wind capacity now significantly higher, the original approach is no longer fit for purpose. A more coordinated and strategic approach is needed both to network planning and to ensure we fully benefit from the upcoming investment. For example:

• There are strong arguments for moving towards a coordinated approach. Connection assets should serve several generators. The ESO estimates that a coordinated approach to connecting offshore wind could save consumers £5.5bn in costs by 2030 compared to the current radial connection approach. It could also reduce the impact the infrastructure will have onshore, on the seabed (with a 30% smaller footprint from cables coming to shore), and reduce CO2 emissions between 2030 and 2032 by 2 megatonnes by facilitating the flow of green energy thereby reducing the use of fossil fuels.

• It will be crucial to ensure acceleration of onshore investments. Windfarms experience long lead times to connect to the network – up to 11 years.

• The UK could gain from greater coordination with its neighbours. With the volumes envisaged by 2030 and beyond, in the parts of the UK closer to our neighbours, the most efficient approaches to grid development may increasingly involve the integration of offshore wind connections and subsea interconnectors – so-called hybrid projects – or even a more meshed subsea grid, which brings more technical issues.

• Finally, the investment in offshore assets has the potential to generate new jobs, contribute to growth and help with the levelling-up agenda. However, these benefits will only be realised if they are anticipated and planned for. Ofgem can deliver impactful reforms, by adapting the regulatory regime and helping industry players

Ofgem can deliver impactful reforms, by adapting the regulatory regime and helping industry players to find new, better ways to do things. At the same time, large obstacles lie outside Ofgem’s direct control, for example around the supply chain capacity and availability, planning requirements and skills shortages. A holistic strategic approach is therefore recommended if the UK is to reach its target for 50GW of offshore wind capacity by 2030.

We explore these issues in a series of posts. Our aim is to provide insights into the current challenges and to trigger constructive debate. Please reach out to us if you would like to discuss any of these topics in more detail. We would love to discuss with you how you can stay ahead.

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