Abstract
The UK's 2030 offshore wind targets are central to its decarbonisation strategy. Understanding the wider economy impacts of meeting them, and the conditions that shape those impacts, matters for investors, policymakers, and the energy regulator, which now carries a statutory duty to promote sustainable economic growth. Here, we consider the extent to which electricity system flexibility conditions the macroeconomic outcomes of offshore wind. We use UKENVI, a dynamic multi-sector computable general equilibrium model with a detailed representation of electricity generation technologies and of the flexibility with which the transmission system draws on generators of differing responsiveness. Offshore wind expansion is introduced through productivity improvements reflecting declining generation costs, combined with exogenous investment sufficient to meet capacity targets, and we compare two scenarios: (i) current grid flexibility, and (ii) enhanced flexibility through investment in storage and network infrastructure. We find that offshore wind expansion delivers positive macroeconomic outcomes under both scenarios, but that enhanced grid flexibility substantially amplifies these gains. Crucially, under the current flexibility constraints, curtailment and declining returns to capital limit utilisation and, in turn, the economy-wide benefits realised. Where flexibility is enhanced, greater utilisation of installed capacity is sustained alongside capital productivity, and we observe stronger increases in GDP, employment, wages and household consumption. These findings suggest that delivery of the capacity targets alone is unlikely to be sufficient, and that coordinated investment in grid flexibility is required if the full economic and environmental returns to deployment are to be secured.