'More support needed' for UK offshore wind industry

More support is needed to boost a ‘home-grown’ offshore wind industry in the UK, to reduce the high costs of the green energy source, a report has claimed.

Offshore wind costs have risen sharply over the past few years, despite expectations when the technology was first deployed a decade ago that the cost of building wind farms and generating electricity would fall substantially over time.

Around 80 per cent of the average offshore wind farm is currently imported from abroad, and support is needed to develop innovation and a better supply chain in the UK to help cut costs, the report from the UK Energy Research Centre (UKERC) said.

The industry has been at the mercy of commodity price increases, fluctuations in currencies and supply chain shortages and bottlenecks, as well as delays in the planning system which saw the average wind farm take seven to nine years to get up and running.

The report's chief author, Dr Robert Gross, head of technology and policy assessment at UKERC, said: "The UK is not yet fully benefiting from being a world leader in the field; in effect UK consumers are subsidising Danish and German wind energy companies. This report suggests that policies could do more both to bear down on costs and support a UK-based industry."

While costs have risen for all types of energy over the past five years, in offshore wind power the rise has been particularly dramatic, and the sector is not likely to see meaningful falls before 2015.

The report said offshore wind was still in its infancy, adding that many developing technologies went through a period where costs rose before they fell.

However, the costs may have reached a plateau, the study said, and could come down significantly if the right incentives are in place.

The report calls for ‘targeted and direct’ support for the supply chain to develop a UK-based industry, while funding for innovation in offshore wind technology should be given a priority in research, development and deployment programmes.

And it said docks and ports were ‘already inadequate’ for the offshore wind industry and sustained support, including potential public spending, is needed to develop them to enable the installation of new wind farms.

The report comes as the £60 million promised under the previous Government for developing ports to cope with offshore wind is under threat from the swingeing budget cuts expected next month.

The study also said the Government should revise the payments to energy companies for generating renewable energy from offshore wind so that they send a long-term signal that support levels would gradually decrease over time - putting the onus on firms to reduce costs.

Dr Gross added: "At the moment the UK's support system offers a generous subsidy but may not do enough to build confidence in the companies making components, providing vessels or delivering support services. We could do more to support innovation and the smaller players lower in the supply chain."

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