Accelerator programme launched to grow Britain’s offshore wind supply chain

Image: Crown Estate

The Supply Chain Accelerator has an initial funding round of £10m and a further £40m has been pledged for future rounds. Each business will be able to apply for a share of up to £1m at this stage.

The aim of the accelerator is to catalyse further early-stage investment in the UK’s offshore wind supply chain, thus growing the nation’s manufacturing capacity for key components.

There will be an initial focus on financially supporting suppliers to floating offshore wind projects in the Celtic Sea. Floating wind, which can enable larger turbines to be erected in deeper waters, is becoming increasingly popular globally and benefits from Contracts for Difference (CfD) funding in the UK.

The Crown Estate’s managing director of marine, Gus Jaspert, said: “Offshore wind not only plays a key part in our energy transition, it can also be a key part of a local and national regeneration with new jobs, skills and industry.

“The Supply Chain Accelerator will enable investment in priority capabilities and skills to aid the delivery of the opportunities within the Celtic Sea Blueprint, driving economic growth regionally for the benefit of the UK as a whole and ensuring we are driving value onshore through offshore activity.”

Recent CBI Economics research found that the UK’s low-carbon economy grew 9% year-on-year in 2023, compared to an 0.1% increase in GDP in general. The analysis also revealed that workers in sectors such as renewable energy tend to be better-paid than the national average.

Applications for the Supply Chain Accelerator funding will open in June. Successful projects will be announced this autumn. The Crown Estate has enlisted Grant Thornton’s assistance with judging and scheme administration.

Supply chain risks

Government-commissioned research last month concluded that there is a ‘high’ or ‘medium-high’ risk of capacity constraints in supply chains for eight key types of components for offshore wind farms and related transmission infrastructure this decade.

The Crown Estate and RenewableUK have previously stated that the UK’s offshore wind manufacturing capacity could be trebled within the next ten years, helping to ease potential supply chain crunches while growing the economy.

A key issue facing the sector at present is rising component and raw materials costs, caused in part by the energy price crisis. Developers of large projects in the US, UK and other markets have axed, paused or sold projects as costs increased by around 40%.

The UK Government has intervened by increasing the maximum strike price for offshore wind projects through the CfD scheme. Late last year, a 52% uplift was confirmed for floating wind farms, and a 66% hike confirmed for other offshore wind projects.

Additionally, offshore wind developers will start being paid for not only their ability to deliver low-cost clean energy generation but also their provision of wider socio-economic benefits, described by the UK Government as “non-price factors”. This change will apply from 2025.