Huge potential of UK offshore renewable energy revealed
The report's central scenario envisages generating enough offshore renewable energy to meet total UK electricity demand in 2050, allowing the UK to export the 50% it could not use to Europe, becoming a net exporter of electricity. Photo by Peter Barker.
The Offshore Valuation, published last month by the Offshore Valuation Group, is the first comprehensive valuation of the UK's offshore renewable energy resource over the long term that explicitly assesses electricity exports to Europe.
It suggests that the offshore renewable energy industry in the UK, using less than a third of the total available resource, could generate the electricity equivalent of 1bn barrels of oil annually, matching North Sea oil and gas production. It could create 145,000 new jobs in the UK and provide the Treasury with €28bn in tax revenues annually whilst ensuring that Britain could become a net electricity exporter. Such developments could result in cumulative carbon dioxide savings of 1.1bn tons by 2050.
The Offshore Valuation Group is an informal collaboration of government and industry organisations that has commissioned the independent report to address the question: What is the value of Britain's offshore renewable resource? The group includes the UK, Scottish and Welsh Governments, The Crown Estate and eight companies across the energy sector.
It is widely acknowledged that within Europe, Britain holds the largest resource of offshore wind, wave and tidal power. Until now the full scale of the economic opportunity this represents has been unknown.
The Offshore Valuation reveals that rapid development of the UK's offshore resource using fixed wind, floating wind, tidal stream, tidal range, and wave technologies could by 2050 generate an amount of electricity equivalent to a billion barrels of oil per year, or the same as the average annual output of UK North Sea oil and gas production seen over the past four decades. If developed still further to tap their full practical potential, offshore renewables would allow the UK to power itself six times over at current levels of demand.
The study shows that the offshore resource has value to the UK whether we use the power ourselves or simply view it as an export commodity to Europe. Three illustrative scenarios calculate the potential Net Present Value to the UK of developing this resource to maturity by 2050.
The report's central scenario envisages generating enough offshore renewable energy to meet total UK electricity demand in 2050, allowing the UK to export the 50% it could not use to Europe, becoming a net exporter of electricity.
It examines what would need to happen for the UK to become such a net exporter of offshore renewable electricity. To do so, the UK would need to exploit just under a third of its total offshore wind, wave and tidal resource by 2050, resulting in infrastructure with a positive Net Present Value of £35bn. The supply chain necessary to realise the central scenario would have annual revenues of £62bn in 2050, profits of £16bn, and could employ around 145,000 people in manufacturing, installation and operations & maintenance. If fossil fuel prices rise higher than the Government's central projections, the benefits would be larger still.
The report sets out a number of key enablers for Government and industry to ensure the UK is on a path that allows it to access its substantial and valuable resource. This would involve making Round 3 offshore wind grid connections 'super-grid compliant' to avoid locking out potential future electricity sales to Europe and taking a leadership role in the current EU super-grid negotiations to ensure that the UK derives maximum value from its design and implementation. There must be continuing development the UK supply chain as key to deployment at scale and least cost. New financing structures must be developed which complement the fundamental features of renewable energy infrastructure and can support the scale and speed of industrial growth required.
Tim Helweg-Larsen, director of the Public Interest Research Centre (PIRC), which chaired the Group said, ‘This report seeks to present to the UK the true value of an energy resource right on our doorstep at a time when concerns over security of supply and climate change are ever present. To discover that we own a resource with the potential to return the UK to being a net power exporter, and on a sustainable basis, is genuinely exciting, and a wake-up call to those in a position to foster the further development of this industry.’
The full report is available for download from:
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