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Infrastructure blog

3 challenges for offshore wind to become a top renewable source in the UK

Date
16 January 2025

Delivering a huge pipeline of projects requires clear vision and commitment, writes ICE Policy Fellow Kaloyana Kostova.

3 challenges for offshore wind to become a top renewable source in the UK
Development for offshore wind can take 10 years before construction begins. Image credit: Shutterstock

With electricity demand in the UK expected to double by 2050, floating offshore wind is crucial to the UK’s future.

It’s seen not just as a green energy source, but the new industrial base for the UK.

But achieving this means investment.

The Contracts for Difference (CfD) scheme is the government’s main way of supporting low-carbon electricity generation.

Much has changed since 2023’s CfD auction failed to attract any offshore wind bids. Last year’s saw the world’s biggest award for offshore wind.

Scotland already has a 25GW pipeline of offshore wind projects. And in England and Wales, developers are soon expected to secure rights to areas in the Celtic Sea.

The delivery of such a huge pipeline requires a clear vision and long-term commitment.

2050 vision

Last October, the joint government-industry Floating Offshore Wind (FLOW) Taskforce launched its Vision to 2050 report.

The report introduces five missions to speed up projects:

  1. reducing costs
  2. deployment
  3. enabling infrastructure
  4. supply chain
  5. innovation

The first recognises the importance of bringing down the cost of floating offshore wind to make it commercially viable – as has happened for onshore wind.

And while standardisation is the answer for the scale of the challenge, innovation will play a crucial role.

Key challenges remaining

1. Time to consent

A key challenge is the time it takes to get projects started. Development for offshore wind can take 10 years before construction begins.

Much of this is down to the potential impacts of projects on marine habitats.

The Energy Act 2023 allows offshore wind developers to make up for potential damages by paying into the Marine Recovery Fund (MRF). This can speed up the consenting process for projects.

But to apply the measures, the government needs legislation to establish the fund.

New technology for ecosystem monitoring can identify the potential environmental effects and allow for site-specific solutions. This can shorten consenting time by at least 40%.

The Crown Estate manages the seabed and much of the coastline around England, Wales and Northern Ireland.

It uses a whole of seabed evidence base to provide a long-term, holistic approach to achieving goals like net zero and marine recovery.

There is a clear need for industry and government to collaborate on updated sectoral marine planning. Not just to protect seabed habitats, but to restore and enhance them.

2. Skills and people

The UK missed the opportunity to make early, long-term investments in the fixed offshore wind supply chain.

While it’s invested significantly in offshore wind power, the country doesn't have enough capacity to make components.

The 2024 Offshore Wind Industrial Growth Plan includes a ‘make or buy’ assessment of all the key components and services in the offshore wind value chain.

The ‘make’ priorities are where the UK can win market opportunities. Within these are ‘nurture to make’ priorities, which will benefit from skills development.

These include floating foundations, assemblies and installations, electrical systems design, export cables, and others.

A skills enquiry is key for the government to understand what green skills are needed and where.

The government should aim to attract students and encourage apprenticeships. And, look at all technology, including wind, solar, and tidal energy.

This should include long-term investment in career pathways for suitably qualified and experienced personnel (SQEP).

3. Funding

Different financial sources are available: the Scottish National Investment Bank, Great British Energy, the National Wealth Fund, UK Export Finance, and others.

But developers need clarity on how to access them at various development stages.

A mix of private and public finance is needed to develop floating offshore wind technology and industrial capacity.

Early engagement with finance providers is important to better understand risk. Standardisation and optimisation will come with scale.

Policy certainty and strategic investment is key to enable commercial decision-making and to leverage private capital.

The role of Contracts for Difference

Contracts for Difference (CfDs) provide long-term revenue for new power projects, which reduces risk for investors.

CfDs are good for bankability. But they become available very late in the development process, after consent is in place.

The government regularly revises CfDs.

A recently announced amendment would allow offshore wind projects with a maximum capacity of 1,500MW to be built in up to three stages. This policy previously only applied to fixed bottom offshore wind.

This would de-risk the construction process and give more certainty to developers and the supply chain.

Another amendment would allow projects to apply for a contract to repower onshore wind sites at the end of their operational life. This would further contribute to the government’s 2030 clean power goal.

Innovate to win

Success stories of capital-intensive innovation, such as SENSEWind and Marine power systems, show the route to success. But more needs to happen to reduce costs.

Standardisation is needed to identify the lowest-risk, lowest-cost components.

But innovation in design and manufacturing is essential to developing them competitively and bringing costs down.

Finding the balance is the key challenge for engineers.

State of the Nation 2025

Every year, the ICE reports on the state of the industry and the actions that members could take to improve infrastructure throughout the UK.

The report, which looks at water, transport and energy, will launch on 30 January with an evening event chaired by ICE President Professor Jim Hall.

Sign up to watch online

  • Dr Kaloyana Kostova, engineering capability lead for structural engineering at National Composites Centre