United Kingdom

United Kingdom

Offshore provides 21% of UK infrastructure value

UK: More than 20% of the entire UK's infrastructure construction contract value in 2016 came from the offshore wind industry, new research from market analyst Barbour API has found.

Offshore wind made up over 20% of the UK's total infrastructure spend
Offshore wind made up over 20% of the UK's total infrastructure spend

According to its latest data, offshore wind accounted for 42.1% of the UK's construction contract value in the utilities and power sector last year, up from 29.9% in 2015.

In 2016, offshore wind sector's total contract value totalled £4.1 billion (€4.83 billion), up from £2.45 billion (€2.88 billion) in 2015 and nearly six times the £700 million (€824 million) in 2013.

The UK's total infrastructure contract value reached £19.26 billion (€22.7 billion) in 2016, up from £18.9 billion (€22.2 billion) in 2015 showing the increasing importance of offshore wind in the UK's infrastructure industry.

Babour points to three major offshore wind projects providing the increase in contract value; SSE's 588MW Beatrice site off Scotland; Innogy's 336MW Galloper site and ScottishPower Renewable's 714MW East Anglia One, both off east England.

Year Offshore Wind Contract Total Total Utilities and Power Offshore % of Utilties and Power Total Infrastructure Offshore % of total infrastructure
 2013 £700,000,000 £9,283,269,213 7.5%  £15,381,000,000  4.6% 
 2014 £675,000,000 £5,042,251,500
13.4%
£18,278,000,000  3.7%
 2015 £2,450,000,000
£8,180,903,111
29.9%
£18,897,000,000 13.0%
 2016 £4,105,600,000  £9,750,000,000
42.1% £19,263,000,000
21.3%
       
source: Barbour API

"Back in 2013, offshore wind farms accounted for only 7.5% of the annual construction value for the utilities and power sector," said Barbour API lead economist Michael Dell.

"With reports showing the costs of producing electricity in this way have fallen significantly, the increase in construction value makes sense.

"We have also seen a large uptake in the planning pipeline for future offshore wind farms, with £23.2 billion worth of construction planned over the coming years, suggesting this burgeoning sector will continue to expand in 2017 and beyond," Dell added.

Trade body RenewableUK said the UK was "reaping the benefits" of the offshore market.

"By winning nearly half of the construction contracts in the energy sector, offshore wind is showing that renewables are not just about clean energy generation — they are about substantial modern infrastructure investment," said RenewableUK's executive director Emma Pinchbeck. 

"Offshore wind is transforming places like Hull, Grimsby, Great Yarmouth and the Isle of Wight — and there are a host of supply chain companies benefitting across the country, in West Lothian, Cheshire, Leicestershire, Bedfordshire and Hampshire. These UK businesses are the backbone of the new clean energy economy," Pinchbeck added.

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