UK content in offshore wind


August 1, 2013

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The thinking behind this week’s UK Offshore Wind Industrial Strategy is clearly that if the wind industry wants government backing then it needs to start generating vote-winning jobs.

Going hand-in-hand with a support package worth a total of around £66m is an ambition to get a ‘made in the UK’ stamp on around seven tenths of the work and components going into British offshore projects.

Plus there is the possible requirement of a supply chain plan for large project developers applying for a Contract for Difference.

The Department of Energy and Climate Change says the measure is designed to ‘encourage a wider, more diverse supply chain and support innovation and skills.’

But it is unclear whose innovation and skills are to be supported. The tone of the strategy clearly hints at local manufacturers. This is fine as it goes. Britain would hardly be the first country wanting its renewable power industry to create jobs.

However, if the UK is moving towards something like a domestic content requirement (DCR) for offshore wind, there could be a couple of problems.

The first is regulatory. In the solar industry, tempers are already running high over protectionist measures imposed by US and European lawmakers on Chinese products.

And the issue of DCRs has come under scrutiny at the World Trade Organization, which recently forced the government of Ontario, Canada, to change a local content requirement for subsidising green power projects.

The second issue is associated with the effort needed to fulfil the UK’s offshore plans in the first place. In this respect, the choice of location for unveiling the Industrial Strategy was an interesting one.

Sure, the 270MW Lincs offshore project which Energy Secretary Ed Davey used as the backdrop for his announcement is a great example of Britain’s offshore wind capabilities, developed as it is by the UK energy giant Centrica.

But the key partners in the project were Dong of Denmark and Siemens of Germany. Offshore wind, it appears, is still very much an international affair.

So trying to fence off parts of it to foster local interests is a strategy that could backfire.

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