The offshore renewable energy sector is experiencing rapid growth, presenting exciting investment opportunities. As the world shifts towards sustainable energy sources, assessing the economic viability of these opportunities becomes crucial.
What are the Benefits of Investing in Offshore Renewable Energy?
Investing in the offshore wind industry in the UK brings several economic, social and environmental benefits.
Environmental Sustainability
According to the
International Renewable Energy Agency (IRENA), renewable energy could account for 86% of global power generation by 2050, with wind farms expected to be a major contributor. In fact, a single offshore wind turbine can prevent the emission of approximately 9,000 tons of CO2 annually, equivalent to the emissions of over 1,900 cars.
This transition is vital for combating climate change and reducing reliance on fossil fuels, conserving natural resources for future generations.
Economic Growth
Investing in local infrastructure and supply chains for offshore renewable energy projects stimulates economic growth in coastal regions, driving local investment and development. Local businesses benefit from contracts for the construction, maintenance, and operation of offshore wind farms, fostering the growth of local industries and creating new business opportunities.
Stronger Workforce
In 2019, the renewable energy sector employed approximately 11.5 million people worldwide, with expectations for significant growth as the sector continues to expand. Offshore wind projects alone require a
diverse workforce, creating thousands of jobs both directly and indirectly.
Some relevant roles include:
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ROV Engineers: Remote Operated Vehicles (ROVs) now handle many tasks once done by divers, such as inspecting and maintaining offshore structures. To operate these machines, skilled engineers are essential. Aspiring ROV professionals typically hold an HND or degree in mechanical or electrical engineering, electronics, or hydraulics, and gain hands-on industry experience before transitioning to the ROV sector.
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Underwater Inspection Specialist: These specialists responsible for carrying out surveys and inspections on a wide variety of offshore structures and subsea assets.
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Hydrographic Survey Jobs: Hydrographic surveying involves the measuring and mapping out of offshore marine environments such as the seabed and harbours as well as onshore environments such as rivers and lakes. Those are highly specialised jobs and require a relevant degree such as geology or marine science.
Cost-Competitiveness
Advances in technology and economies of scale have significantly reduced the cost of offshore energy, making it increasingly competitive. For instance, the cost of offshore wind has dropped by nearly 30% since 2010. While the initial capital investment is high, the relatively low operating costs lead to more competitive electricity production, offering stable and predictable energy prices.
Investing in cost-competitive offshore renewable energy sources can lead to lower energy prices for consumers and businesses, enhancing economic efficiency and supporting sustainable growth.
Government Support
The UK Government is committed to providing financial support through Contracts for Difference (CfD) schemes to stimulate investment. This support not only drives deployment of clean energy but also boosts economic growth through GVA generated within the UK supply chain.
Technological Innovation
Innovations such as larger and more efficient turbines, floating wind farms, and improved storage solutions are critical for the sector's growth. Continuous improvements in technology contribute to a more sustainable and resilient energy system, increasing the efficiency and reliability of offshore wind farms, making them a key component of the future energy landscape.
The Value of the Supply Chain
Knowing the value of the UK supply chain is crucial for understanding the economic impact and benefits of the industry. According to the
UK Supply Chain Capability Analysis report, expanding the UK's supply chain just for offshore wind offers a £92 billion opportunity to strengthen the UK economy by 2040. This potential is influenced by UK content estimates, investments in manufacturing facilities, supply chain trends, and market value projections.
Investments in this industry significantly increase projects, reducing logistical costs and transit times, and enhancing the overall value of the supply chain. Various sectors within the UK offshore supply chain have shown notable trends and developments. For instance, turbine supply involves components like towers and blades, with a shift towards more UK-based manufacturing expected in the future.
Expanding the UK’s offshore renewable energy supply chain is a strategic move to bolster the economy and strengthen the industry, paving the way for a sustainable and prosperous future.
How Does Investment Increase Exports of Renewable Energy?
Investing in the UK supply chain not only benefits domestic projects but also increases export opportunities. The UK can leverage its expertise and products to tap into the global market, including emerging markets in Asia and the USA.
Opening Global Markets
Developing cross-border energy trading partnerships strengthens diplomatic and economic ties, facilitating the sharing of technology and best practices, and promoting global adoption of renewable energy. It also generates revenue by creating new revenue streams, enhancing energy security, and fostering international cooperation.
Fostering Energy Diplomacy
Positioning renewable energy as a strategic asset attracts investment and boosts national energy security by reducing dependency on imported fossil fuels, providing greater stability and resilience against global market fluctuations.
Energy diplomacy can strengthen international relations by promoting cooperation on energy issues. Leading renewable energy exporters can influence global policies and support the transition to a sustainable future, positively impacting their global standing.
Supporting Sustainable Development Goals
Offshore renewable energy projects contribute to global sustainability efforts by reducing greenhouse gas emissions and promoting clean energy, aligning with international commitments such as the Paris Agreement. Renewable energy investments directly support several of the UN’s SDGs, including affordable and clean energy (Goal 7), decent work and economic growth (Goal 8), industry, innovation, and infrastructure (Goal 9), and climate action (Goal 13).
By investing in offshore renewable energy, nations can drive positive global change, reducing environmental impacts, promoting sustainable economic growth, and supporting the transition to a low-carbon economy.
Investing in the Right Offshore Renewables Project
Now we understand why this sector is so important for us and future generations. But what can we do? When investing in the right offshore renewables project, there are several aspects to consider.
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Location Consideration: The success of offshore renewable energy projects largely depends on geographical conditions. Factors such as wind speed, water depth, and proximity to the grid determine a project's feasibility and efficiency. Conducting thorough environmental impact assessments helps identify and mitigate potential risks, ensuring sustainable project design and implementation.
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Financial feasibility: A detailed analysis of costs, including capital expenditures, operational costs, and revenue projections, is necessary. Securing adequate funding, often through a mix of public and private financing, and building effective risk management strategies to address uncertainties, such as fluctuating energy prices or regulatory changes, are key to a project's success.
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Technological Innovation: This includes understanding advancements in turbine design, floating wind technology, and energy storage solutions. Investing in innovative technologies can provide a competitive edge and enhance the overall efficiency and effectiveness of projects. By investing in cutting-edge technologies, investors can ensure the long-term success and sustainability of their business.
Maximise Returns with Recruitment at UTM Consultants
Investing in offshore renewable energy presents a myriad of economic benefits, from job creation to sustainable development. By strategically selecting investment opportunities and embracing technological innovations, investors can maximise returns and contribute to a greener, more sustainable future.
Here at
UTM Consultants, we understand the importance of quickly and efficiently connecting the right employers with the right contractors to ensure project success. Explore our
job openings or
get in touch today to kickstart your career in offshore energy.