TY - RPRT
TI - What is the value of innovative offshore renewable energy deployment to the UK economy?
AU - Cochrane, C
AU - Pennock, S
AU - Jeffrey, H
AB - This study quantifies the potential economic benefit, in gross value added (GVA) terms, that the UK stands to gain through the deployment of innovative offshore renewable energy (ORE) technologies (wave, tidal stream and floating offshore wind) in domestic and international waters. The economic implications of increased and targeted innovation across the supply chain have also been quantified. GVA is the metric used in this study, in lieu of an alternative which may account for wider social impacts, because it is the generally accepted economic performance metric employed by governments and policymakers.This work is founded on deployment scenarios, where cost, performance and systemic conditions are defined by the 2030 levelised cost of energy (LCOE) targets in the Strategic Energy Technology Plans (SET Plans) for wave, tidal stream, and floating offshore wind (FOW) technologies. Deployment modelling obtained from the Energy Systems Catapult (ESC) and the International Energy Agency (IEA) form a basis for an input-output (IO) analytical model. The time series of the installed capacity are coupled with deployment costs, leakage rates, and GVA effects to obtain GVA results associated to the different project phases and components.Results are presented across multiple levels of local content ambition, to assess the impact on this economic benefit of increasing local content in specific areas of the UK supply chain, for example through targeted investment by the UK government. A High Ambition supply chain scenario assumes more ambitious levels of spend for domestic and international deployments retained by the UK supply chain. Conversely, a Low Ambition supply chain scenario assumes less ambitious retention levels of UK content.Results from this work can be summarised as:Global deployments of wave, tidal stream, and floating offshore wind technologies produce a total of £24.6bn to £79.6bn in GVA to the UK economy, dependent on supply chain assumptions.Of this total figure, domestic deployments result in £16.4bn to £41.4bn in GVA for the UK economy. Within this obtained GVA range, a 152% increase in GVA can be observed, due to more ambitious retention assumptions reflecting a stronger UK supply chain.UK content in international deployments therefore generates £8.2bn to £38.2bn in GVA for the UK economy. Within this obtained GVA range, a 221% increase in GVA can be observed from global deployments, due to more ambitious retention assumptions reflecting a stronger UK supply chain.Translating this per MW of deployment, domestic ORE deployments result in GVA per MW values which range from £258k/MW to £745k/MW, dependent on technology and retention assumptions. International ORE deployments result in values of £35k/MW to £179k/MW.Lifetime OPEX is the cost centre that contributes the most to the incurred GVA for all technologies and scenarios. In terms of the CAPEX-related GVA, the balance of plant supply generates the highest CAPEX-related GVA for FOW, and the generating device results in the highest CAPEX-related GVA for wave and tidal.This economic benefit to the UK economy is only achievable if focused investment in ORE technologies enables a reduction in LCOE in line with the SET Plan targets. This results from performance improvements and cost reduction both through innovative step-changes in research and development and through learning from continued successive deployments. This focused investment would also have to result in sufficient domestic supply chain development to achieve the levels of spend retention assumed in this work.
DA - 2021/09//
PY - 2021
SP - 29
PB - Policy and Innovation Group
UR - https://supergen-ore.net/news-and-events/policy-paper-potential-economic-benefit
LA - English
KW - Marine Energy
KW - Tidal
KW - Wave
KW - Wind Energy
KW - Floating Offshore Wind
KW - Human Dimensions
KW - Social & Economic Data
ER -