tom hopkinson

Offshore wind provides opportunity across the supply chain

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This week, Tom Hopkinson looks at how the entire supply chain of the wind industry can bring wealth and jobs to a region.
Offshore wind provides opportunity across the supply chain

Business secretary John Hutton’s £150 million government manufacturing strategy has been set up as a means of "seizing the opportunities in the low carbon economy". Earlier this year, Mr Hutton said that renewable and low carbon energy industries can help the UK to rebound from current economic difficulties - creating 260,000 jobs over the next 10 years.

 

In the offshore wind energy sector, there is no doubt that the manufacture and final assembly of wind turbines will play a critical role in creating new jobs and stimulating economic growth.

However, despite manufacturing often ‘grabbing the headlines’, there is often a lack appreciation or understanding of the considerable value - in terms of employment and economic generation - that post manufacture, service roles and ‘supportive’ construction projects can create, particularly in logistics, operations and maintenance.

In fact, the proportional ‘value’ of manufacturing although extremely important to our economy, is perhaps less than one would expect, particularly when it comes to employment opportunities. This point was clearly illustrated after the completion of the Scroby Sands wind farm in 2004, when Douglas Westwood Ltd, BWEA’s consultant analyst, conducted an interesting survey looking at the total expenditure and man hours that went into the final project.

The consultants looked at construction, operations and maintenance over the first five years. They found that despite using Danish built turbines, 48% of the contract work was placed with UK companies, and up to 73% of man hours were UK based. In terms of capital value - of a total value of £55.7 million, £19 million was sourced from within the UK.

Many of the construction contracts were placed with UK companies in the South East including foundation and cable manufacture, onshore cable installation, grid interface and the installation of the export cable to shore this phase.

The majority of the UK’s 48% content was sourced from successful penetration of the lower tiers of the supply chain with a significant number of service-based contracts with, for instance, the UK providing all environmental monitoring, survey, insurance/legal and onshore installation related works.

The positive message we can take from this survey is clear. The sheer ‘depth’ and complexity of the offshore wind sector’s supply chain can provide plenty of scope for economic stimulus.

Beyond offshore maintenance and operational jobs, and the service and construction roles mentioned in the survey, consultancy will also be in big demand, as utility companies look for specialist skills in geotechnical surveys, planning and survivability studies. Many of these skills have been developed and honed in the Oil & Gas sector, putting the UK in an advantageous position when Round 3 reaches maturity.

Research & Development is another element of the supply chain likely to stimulate growth by producing highly-skilled, highly specialist and well paid jobs. The European Marine Energy Centre (EMEC) up in Orkney is already considered a world hub for prototype development and testing - if the UK can build its reputation as R&D specialists we can export these skills, and create jobs for the long term.

There is undoubtedly rich opportunity across the entire supply chain, from consultancy to R&D, maintenance and operations. As Round 3 gets into full swing, these opportunities will only increase. Scroby Sands gives us a glimpse into the sheer scale of opportunity that Round 3 will create, with or without the domestic manufacture of wind turbines.

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