Floating offshore wind in Celtic Sea could be biggest investment opportunity in Wales, but certainty over projects needed from UK Government
8 March 2023
Floating offshore wind could represent the single biggest investment opportunity in Wales for decades, the Welsh Affairs Committee argues today, but urgent clarity is needed by the UK Government to turbocharge efforts.
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The Crown Estate has said that there is scope for floating offshore wind in the Celtic Sea to generate 20GW of energy by being situated further offshore. If its full potential is realised, the Committee argues that floating offshore wind farms could create thousands of high-quality, long-term jobs and give Wales the ‘first-mover’ advantage. However, developers and port operators told the Committee that a lack of long-term targets and a clear pipeline of projects to unlock investment are stifling progress. The UK Government must urgently address this, and steps must be taken to ensure consenting bodies are adequately staffed and resourced to take on the anticipated increase in demand.
In October 2022, the Committee published its report considering grid capacity, and argued that network constraints hold back green energy projects in Wales. The setting of long-term targets and a roadmap of delivery would also benefit National Grid ESO in planning network upgrades.
Local supply chains in Wales must benefit from the manufacture and installation of floating offshore wind, and their involvement must be prioritised over international competitors. The Committee argues that local supply chains did not benefit from the rollout of conventional, fixed-bottom offshore wind as much as they could have, with major fabrication and installation work undertaken overseas. The Committee is determined that this is not repeated as the potential for wealth and job creation in Wales is too great an opportunity to miss.
While the Crown Estate requires developers to provide supply chain investment plans as part of their bid for a lease, a mechanism is needed to hold developers to account on delivery of these plans. Similarly, the Committee is calling on the UK Government to reform future Contracts for Difference auctions for floating offshore wind to include enforceable local content requirements.
Ultimately, the Committee believes the successful delivery of floating offshore wind in the Celtic Sea will require coordination between the UK and Welsh Government, public bodies and industry in a number of interdependent policy areas. Only then can Wales capitalise on the enormous potential floating offshore wind represents to the nation.
Welsh Affairs Committee Chair, Rt Hon Stephen Crabb MP, said:
“New floating offshore wind technology will open up the deep waters of the Celtic Sea to the green energy revolution. Larger turbines sited farther offshore than traditional turbines will harness the stronger winds to deliver greater power generation."
"Wales will have a key role in helping the UK to reach its target of 5GW of floating offshore wind by 2030. Our Committee was told that floating offshore wind in the Celtic Sea could bring £20 billion of direct investment into the domestic market. Some of the world's largest energy companies are already drawing up Celtic Sea investment plans.
"The challenge is to ensure that floating offshore wind creates real long-term economic value for Wales. Ports like Milford Haven and Port Talbot are ideally situated to become hubs for manufacturing and operations, and firms like Tata Steel could form part of a strong Welsh supply chain. Achieving this will require a clear strategy from Government and the Crown Estate to prioritise domestic content and ensure developers meet their commitments.
"Floating offshore wind represents a once-in-a-generation industrial opportunity for Wales - we cannot afford to let this pass us by.”