A new study quantifies the potential economic benefit, in gross value added (GVA) terms, that the UK stands to gain through the deployment of innovative offshore renewable energy (ORE) technologies in domestic and international waters.
The study, published through a new policy paper from the Supergen ORE Hub, and the Policy and Innovation Group at the University of Edinburgh, highlights the significant potential value to the UK if the UK government invests in developing the local supply chain ahead of deploying these innovative ORE technologies – namely wave, tidal stream and floating offshore wind.
The key results show:
- Global deployments of wave, tidal stream, and floating offshore wind technologies produce a total of £24.6bn to £79.6bn in GVA to the UK economy, dependent on supply chain assumptions.
- Of this total figure, domestic deployments result in £16.4bn to £41.4bn in GVA for the UK economy. Within this obtained GVA range, a 152% increase in GVA can be observed, due to more ambitious retention assumptions reflecting a stronger UK supply chain.
- UK content in international deployments therefore generates £8.2bn to £38.2bn in GVA for the UK economy. Within this obtained GVA range, a 221% increase in GVA can be observed from global deployments, due to more ambitious retention assumptions reflecting a stronger UK supply chain.
- Translating this per MW of deployment, domestic ORE deployments result in GVA per MW values which range from £258k/MW to £745k/MW, dependent on technology and retention assumptions. International ORE deployments result in values of £35k/MW to £179k/MW.
- Lifetime operational expenditure (OPEX) is the cost centre that contributes the most to the incurred GVA for all technologies and scenarios. In terms of the capital expenditure (CAPEX)-related GVA, the balance of plant supply generates the highest CAPEX-related GVA for floating offshore wind, and the generating device results in the highest CAPEX-related GVA for wave and tidal.
The Supergen ORE Hub are pleased to publish this report, working with the Policy and Innovation Group at the University of Edinburgh. Offshore Renewable Energy technologies have a key role to play in meeting net zero greenhouse gas emission targets and reducing our reliance on fossil fuels, both in the UK and globally. But, these technologies can also provide significant socioeconomic benefits such as Gross Value Added and jobs creation.
This study gives us a clear indication that future deployment of floating offshore wind, tidal stream and wave energy technologies will have great economic for the UK. These technologies are of particular interest as they still require significant levels of innovation and cost reduction to become commercially mature, but the UK has potential to lead the way in technology and supply chain development.
This report has been written by Charlotte Cochrane, Shona Pennock and Henry Jeffrey from the Policy and Innovation Group.