The UK is a global leader in offshore wind energy, with ambitious targets to scale up capacity as part of its net-zero strategy.
By 2030, the UK government aims to deploy 50GW of offshore wind, including 5GW of floating offshore wind. Looking further ahead, projections for 2050 suggest the sector could reach 100GW or more.
As a result, the offshore wind sector will play a pivotal role in decarbonising the UK electricity grid and supporting energy security.
In addition, the transition from fossil fuels to renewable energy could provide a significant jobs opportunity for offshore oil and gas workers in the UK.
Many of the skills required for deploying wind projects, particularly floating developments, already exist within the oil and gas sector.
For communities in the north east of Scotland such as Aberdeen, ensuring a just transition for workers will be crucial for maintaining economic stability.
Investors driving offshore wind expansion
The UK offshore wind market has attracted significant investment from both domestic and international companies.
Ørsted, RWE, SSE Renewables, ScottishPower Renewables, Corio Generation, and Copenhagen Infrastructure Partners (CIP) are among the largest investors in the UK market.
The UK government is supporting investment into offshore wind and other forms of renewable energy through the Contracts for Difference (CfD) scheme.
In the most recent sixth allocation round (AR6), the government awarded more than 3.3 GW of offshore wind capacity.
It followed a disastrous result in the AR5 auction in 2023, which saw no CfD bids from the offshore wind sector.
In order to achieve its ambition to decarbonise the UK electricity grid by 2030, the Labour government is introducing reforms for AR7 to entice more bidders.
ScotWind and INTOG leasing rounds
Two of the most significant recent developments in the UK offshore wind sector came from Scotland’s ScotWind and Innovation and Targeted Oil & Gas (INTOG) leasing rounds.
The Crown Estate Scotland announced the results of the ScotWind leasing round in early 2022, awarding seabed rights to 17 offshore wind projects with a total capacity of over 27GW.
Many of these projects focus on floating wind technology, which is essential for unlocking deepwater sites off the Scottish coast.
© Supplied by Forth PortsDelivering ScotWind projects forms a key part of the Scottish government’s future green hydrogen export ambitions.
Major ScotWind developers include oil and gas firms BP and Shell, as well as SSE, ScottishPower, BayWa, BlueFloat Energy, Nadara and Ocean Winds.
Meanwhile the INTOG leasing round awarded seabed rights to 13 winners in 2023.
The aim of INTOG is to support the decarbonisation of oil and gas infrastructure in the North Sea.
INTOG investors include BlueFloat Energy and Nadara, Simply Blue and ESB, Flotation Energy, BP, Cerulean Winds, TotalEnergies and Harbour Energy.
Economic potential of floating offshore wind
According to RenewableUK, floating offshore wind is a “once-in-a-generation” opportunity which could employ 100,000 people and contribute £47bn to the UK economy by 2050.
Both the Scottish and UK governments are investing heavily in port infrastructure and cable manufacturing, alongside efforts to encourage wind turbine players Vestas and Mingyang to set up operations in Scotland.
© Supplied by StatkraftWith countries like France, Norway, Italy, Portugal, Japan, South Korea and Australia all investing in floating wind capacity, the UK and Scotland are aiming to capitalise on their existing oil and gas expertise to develop a potential export market.
UK offshore wind facing challenges
Despite its strong growth, the offshore wind industry in the UK faces several critical challenges.
Financing constraints are becoming increasingly pressing, as rising material costs, inflation, and supply chain disruptions have led to higher project costs, putting pressure on developers, according to RenewableUK.
Planning and permitting delays continue to slow the approval process for offshore wind farms and transmission infrastructure, with grid connection bottlenecks a major issue.
The UK’s electricity grid also requires significant upgrades to accommodate new offshore wind capacity and ensure efficient power transmission.
Supply chain issues present another obstacle, as a lack of domestic turbine and component manufacturing capacity has led to reliance on international suppliers, creating vulnerabilities in project delivery timelines.
The financial challenges have led to a retreat from oil and gas giants BP, Shell and Equinor, who have reduced their renewable energy investment targets.
Amidst the challenges, the UK government is continuing to invest in grid upgrades and long duration energy storage in an effort to keep the wind sector on track to meet net zero goals.
