WWW.IPPR.

ORG

GreenJobs:
Prospectsforcreatingjobsfrom
offshorewindintheUK
byJennyBird
April2009
ippr2009

InstituteforPublicPolicyResearch
Challengingideas Changingpolicy
2 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

Contents
Acknowledgements ............................................................................................................... 3
Abbreviations......................................................................................................................... 4
Foreword................................................................................................................................ 5
Executivesummary................................................................................................................ 7
Introduction......................................................................................................................... 11
1.Offshorewindandemployment ..................................................................................... 12
Whyoffshorewind? ........................................................................................................ 12
Theopportunity:jobcreationfromexpandingUKoffshorecapacity............................ 14
OpportunitiesforandbarrierstoUK-basedjobsinoffshorewind ................................ 16
2.Creatingjobslessonsfromtheonshorewindindustry................................................ 22
Denmark.......................................................................................................................... 22
Germany.......................................................................................................................... 23
Spain .............................................................................................................................. 23
LessonsfordevelopinganoffshorewindindustryintheUK ........................................ 24
3.Securingthedomesticmarket ........................................................................................ 26
Economicsupportmechanism ........................................................................................ 26
Removingbarrierstodeliveringoffshorecapacity ......................................................... 28
Maximisingmarketsize................................................................................................... 31
4.Industrialactivism............................................................................................................ 33
Whatisindustrialactivism?........................................................................................... 33
Measurestosupportoffshorewind................................................................................ 34
AnoffshorewindinwardinvestmentprogrammefortheUK ........................................ 38
5.Skills................................................................................................................................. 40
Closingtheskillsgap ...................................................................................................... 41
Training .......................................................................................................................... 42
Attractingtheworkforce................................................................................................. 43
6.Conclusionsandpolicyrecommendations ...................................................................... 44
Overcominguncertaintytodeliveroffshorewindcapacity............................................ 44
Assistingsupply-chaindevelopment .............................................................................. 45
Maximisingthepotentialforjobcreation....................................................................... 46
Summaryofrecommendations ....................................................................................... 49
References ........................................................................................................................... 51
AnnexI:Listofinterviewees ............................................................................................... 56
AnnexII:IPC,NPSandRoundThreetimetables ................................................................ 57
AnnexIII:ExistingfundingsupportintheUK.................................................................... 58
3 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

Aboutippr
TheInstituteforPublicPolicyResearch(ippr)istheUKsleadingprogressivethinktank,
producingcutting-edgeresearchandinnovativepolicyideasforajust,democraticand
sustainableworld.
Since1988,wehavebeenattheforefrontofprogressivedebateandpolicymakinginthe
UK.Throughourindependentresearchandanalysiswedefinenewagendasforchangeand
providepracticalsolutionstochallengesacrossthefullrangeofpublicpolicyissues.
WithofficesinbothLondonandNewcastle,weensureouroutlookisasbroad-basedas
possible,whileourinternationalandmigrationteamsandclimatechangeprogrammeextend
ourpartnershipsandinfluencebeyondtheUK,givingusatrulyworld-classreputationfor
highqualityresearch.
ippr,30-32SouthamptonStreet,LondonWC2E7RA.Tel:+44(0)2074706100E:
info@ippr.orgwww.ippr.org.RegisteredCharityNo.800065

ThispaperwasfirstpublishedinApril2009.ippr2009

Acknowledgements
TheInstituteforPublicPolicyResearch(ippr)wouldliketothanktheGreenpeace
EnvironmentTrustandtheEnvironmentAgencyforfundingthisproject,withoutwhose
support,thisprojectcouldnothavehappened.
Thefindingsofthisresearchare,however,theresponsibilityoftheauthoraloneanddonot
necessarilyrepresenttheviewsofourfundingpartnersoranyotherindividualor
organisationinvolvedintheproject.
Theauthorwouldliketothankalloftheindividualswhowillinglygaveuptheirtimetotake
partininterviewsforthisproject.Shewouldalsoliketothankthefollowingpeoplefor
providingguidance,comments,adviceandsupportthroughouttheproject:DougParr,Rob
Sauven,GordonEdge,PhilipWolfe,DaveElliott,CatherineMitchell,andcolleaguesfrom
ippr:MatthewLockwood,SimonRetallack,AndrewPendleton,KayteLawton,TonyDolphin,
SarahMulleyandCareyOppenheim.ThanksalsotoGeorginaKyriacouforsteeringthereport
throughthepublicationprocess.
Anyomissionsorerrorsremaintheauthorsown.
4 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

Abbreviations
BERR DepartmentforBusiness,EnterpriseandRegulatoryReform
BWEA BritishWindEnergyAssociation
CO2 Carbondioxide
DECC DepartmentofEnergyandClimateChange
DIUS DepartmentforInnovation,UniversitiesandSkills
EU EuropeanUnion
EWEA EuropeanWindEnergyAssociation
GW Gigawatt
IPC InfrastructurePlanningCommission
kWh Kilowatthour
MW Megawatt
NaREC NewandRenewableEnergyCentre
NPS NationalPolicyStatement
O&M Operationandmaintenance
R&D Researchanddevelopment
RD&D Research,designanddevelopment
RDA RegionalDevelopmentAgency
RO RenewablesObligation
ROC RenewablesObligationCertificate
STEM Science,Technology,EngineeringandMathematics
UKTI UKTradeandInvestment
WTO WorldTradeOrganisation
5 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

Foreword
Wearetakingactiontospeedrecovery,butnotsimplytoturnthe
economybacktowhatitwaswereontheedgeofanewlowcarbon
industrialrevolution.Theshifttolowcarbontechnologiesand
productionwilltransformhowweliveandworkWeneedtotakethe
bigdecisionsabouttheUKsenergyandtransportinfrastructureso
thattheyarereadyfortheshifttorenewablesWehavecommitted
toashifttolowcarbonasacountryandaneconomy.
LordMandelson,CumbriaEconomicForum,20February2009

Theworldisfacinganunparalleledeconomiccrisis.Asrecessionfollowsthecreditcrunch
andbankingcollapsegovernmentsaroundtheworldarecontemplatingfiscalstimulus
theuseofpublicmoneytostimulateeconomicactivitytokeeptherecessionfrom
turningintoadecade-longdepression.
Buttheworldalsohasanothercrisistofaceclimatechange.Currenttrajectoriesshow
thereislittletimelefttostoptheclimatechangingbeyondthewidely-agreedthreshold
ofadangeroustwodegreeCelsiusrise.
Climatechangeitselfisaresultofthefailedeconomicmodel,soanyinitiativesto
addressthefinancialcrisismustaddressclimatechange.Thismeansthateconomic
recoverycannotbedeliveredbyinflatingconsumptionorsubsidisingcarbon-heavy
industries.
Sincemostclimateemissionsareconnectedtoourinfrastructurehouses,offices,power
stations,roadsandsoonmanycommentatorssuchasLordSternrecognisethat
spendingmoneyontacklingclimatechangenowisthebestwayofkillingtwobirdswith
onestone.Throughrenovatingourhomesandbusinessestobemoreenergyefficient,
buildingrenewablepowersystemsandupgradingpublictransportwewillnotonly
stimulatetheflounderingeconomybutalsokick-startthechangetoalow-carbonfuture.
Convertingtheworldtoasustainableenergysystemwillinvolvesignificantfinance.
AccordingtoleadinginvestmentanalystsNewEnergyFinancewewillneedtoinvestat
leastUS$515bnperannumincleanenergybetweennowand2030.Mostofthis
investmentwillneedtobeinrenewableenergy.
CurrentlytheUKrenewablessectorisheadingforacrisiswherethetargetssetbythe
EuropeanUnionandsupportedbytheUKgovernmentwillnotbemet.Weneedalong-
termpolicyframeworkwithclearfinancialsupportmechanismsandasimple,effective
planningsystemthatgivesconfidencetoinvestors,coupledwithdirectsupportfor
deliveryofthenecessaryinfrastructure.Thedirectsupportcancome,inpart,froma
greenfiscalstimuluspackagefortheflaggingeconomy.Butfurther,italsorequiresan
effectivefinancialsupportmechanism,keyupgradestothetransmissionsystem,low-
interestloansandafaster,moretransparentsystemofplanningoffshore.
Measuresoutlinedinthisreportforthedeliveryofoffshorewindincludeupgrading
infrastructurearoundportstoallownewshipsandfactoriestoaccessthenecessary
facilitiesandensuringcablingtothenewoffshorewindsitesisestablished.Supportvia
low-interestloansfortheearlystagesofdevelopmentwhencash-flowonprojectswillbe
verytightandagreeninvestmentbankchargedwithsupportingrenewableenergywould
alsohelp.TheIrishgovernmenthastakenafurtherstepandinstructedthebanksmany
noweffectivelyinpublicownershiptohaveamajorcleanenergyfundasaconditionof
6 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

governmentrefinancing1.Thisisthesortofprioritisationthatcangiveconfidenceto
potentialinvestorsfromtheprivatesectorthattheGovernmentmeansbusiness.
BothPrimeMinisterGordonBrownandSecretaryofStateforEnergyandClimateChange
EdMiliband,havemadeitclearthatgreenjobsarepartoftherecoveryplanfortheUK.
ButiftheUKistobenefitfromthejobsthat30GWofoffshorewindwouldgenerate
thenweneedurgentactionnow.LookingtowhatGermanyhasachievedoffersgreat
encouragementtherearealready250,000jobsinitsrenewableenergysectorandthe
Germangovernmentexpectsthatnumbertotripleby2020andhit900,000by20302.
Weneedrenewableenergytoplayapivotalroleincreatingasustainableeconomyfor
theUK.Wehaveambitioustargetsbut,asthisreportoutlines,therearesignificant
policyandpracticalissuestobedealtwithbeforedeliverycanbeassured.Theeffortsto
startarecoveryfromthecurrenteconomicdownturnprovideanopportunityfortheUK
togetitsshareofthebenefitsofthisrenewablerevolution,butandthisisespecially
keyforoffshorewindsuccessdemandsthatfinancialsupportandanewpolicy
frameworkmustbefocusedonmakingsurewedeliveronourrenewabletargets.

JohnSauven,ExecutiveDirector,Greenpeace

1.NewEnergyFinancenewsletter,24February2009
2.GermanySaysGreenJobsWillShortenRecession,Reuters,25February2009
7 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

Executivesummary
AsunemploymentintheUKcontinuestoincreasewiththeglobalrecession,itisonlynatural
tolookforopportunitiestocreatenewjobs.Atthesametime,theimperativetotackle
climatechangeanddrasticallyreduceemissionsofgreenhousegasesmeansthatweneedto
havearadicalrethinkofhowtheUKeconomywillbestructuredinthefuture.
ThisreportcompilesevidencefromindustryplayersabroadandintheUKofthekindof
interventionsneededtodeliverasuccessfuloffshorewindindustryinBritain.

TheimportanceofoffshorewindtotheUK
Offshorewindisastrategicallyimportantsectorforfourreasons:
Itislikelytoprovidealargeportionoftherenewableenergyneededtomeetour2020
renewableenergytargetsandcarbonbudgets
Itprovideslong-termjobopportunities
ItisasectorinwhichthereisscopefortheUKtodevelopastrategicadvantagewith
thepotentialforexportopportunities
Ithasthepotentialtoprovidegoodqualityjobsintherightgeographicallocations.
Withoutarapidexpansioninoffshorewindcapacity,theUKwillstruggletomeetitstarget
toachieve15percentofenergyfromrenewablesourcesby2020andtomeetthecarbon
budgetssetoutbytheCommitteeonClimateChange.Thescaleoftheexpansionisstill
uncertainwithestimatesoflikelycapacityin2020varyingquitesignificantly.The
GovernmenthasstatedveryambitiouslythatRoundThreeoftheoffshorewindprogramme
coulddeliver33gigawatts(GW)ofcapacityby2020,buttheforecastsintheRenewable
EnergyStrategypresentamuchmoreconservativeestimateof14GW.
Estimatesofthenumbersofjobsthatcouldbecreatedbyincreasingoffshorewindcapacity
rangewidely,from23,000to70,000.Thesefiguresdependinpartonthesizeofoffshore
windcapacitythattheUKisabletosecure,butalsoontheextenttheGovernmentis
preparedtofollowanactiveindustrialstrategyinthisarea.Further,thereisnoguarantee
thatallofthejobswouldbelocatedintheUK.Forexample,theoffshorewindturbines
currentlyoperatinginUKwatersaremanufacturedoverseas.
TherearesomeareaswheretheUKismorelikelytobenefitfromincreasedjobcapacity.
Theseincludetechnicalconsultancy(forthedevelopmentofnewwindfarms),installationof
turbines,operationandmaintenanceofthewindfarmsandassociatedlegalandfinancial
services.Intermsofgainingnewmanufacturingjobs,thereappearstobegreatest
opportunityinmanufacturingsomespecificcomponentsthatdrawontheUKsexistingskills
andknowledgebaseintheoffshoreoilandgassectorforexample,manufacturing
foundationsandtowers.

Learningfromsuccessfulwindindustriesoverseas
Denmark,GermanyandSpainhaveallbeensuccessfulindevelopingalocalonshorewind
industry.Allthreecountriesrecognisedthepotentialforeconomicandemployment
advantagesinadditiontotheenvironmentalbenefitsandusedeffectivestrategiesto
developonshorewind.
TheUKcanbenefitfromthreekeylessonsthatemergefromtheapproachestakenbythese
countries:
Astableandsizeabledomesticmarket wasneededandwasachievedthrougha
combinationofstrongpoliticalcommitmentandtheuseoffeed-intariffsasan
economicsupportmechanism.
8 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

Industrialactivism wasimportant,intheformoftaxincentives,favourablecustoms
duties,qualitycertification,R&DsupportandinthecaseofSpainlocalcontent
requirements.
Anavailableskillsbase wascrucial:turbinemanufacturerswereabletodrawonan
existingmanufacturingskillsbaseineachcountryandinmanyinstances,existinglocal
companiesdiversifiedintothewindsupplychain.

Securingthedomesticmarket
InvestorsneedtohaveconfidencethattheambitionssetoutfordevelopingtheUKs
offshorewindcapacitywillbedelivered.Thetargetssetfor2020havehelpedtobuild
confidencethattheGovernmentisseriousaboutdevelopingrenewableenergybutthereare
stillanumberoffactorsthatarecreatinguncertaintythatwillneedtobeovercomeifthe
sectoristodevelopasplanned.
ThefirstoftheseistheeconomicsupportmechanismtheRenewablesObligation(RO).
TheROhascomeunderalotofcriticismbecauseithasnotbeenabletodeliverthe
deploymentofrenewablestotheextentthattheuseoffeed-intariffshasinothercountries.
TheGovernmenthasrespondedbymakingsomechangestotheROandbyintroducinga
feed-intariffforsmall-scaleinstallations.Thekeyquestioniswhetherthesechangeswhich
willresultinincreasedsupportforemergingtechnologieslikeoffshorewindgofarenough
tomaketheindustryeconomicallyviable.Governmentshouldbepreparedtoreadjustthe
supportmechanismifitisfoundnottobeworking.
Thesecondfactorisremovingbarrierstodelivery.Thebarriercausingmostconcernisthe
gridinfrastructure:majorupgradestocapacityandnewoffshoreconnectionswillbeneeded
inordertoaccommodatesuchalargeamountofnewoffshorewind.Therearecurrently
severalprocessesunderwaytoaddressthisproblembutthecreditcrunchmayaddanother
dimension.Governmentshouldconsiderunderwritinginvestmentinthegridifalackof
availablefinancethreatenstopreventthenecessarygridupgradesfromoccurring.
Theplanningsystemandsupplychainalsoposethreatstothedeliveryofoffshorewind.An
InfrastructurePlanningCommission(IPC)iscurrentlybeingestablishedanditishopedthat
thiswillhelptospeeduptheconsentprocess.Thismustbemonitoredasanyslippagein
timetablecouldjeopardisedeliveryofnewcapacityby2020.
Governmentshouldalsoconsidertargetingsupportmeasuresatcompaniesthatcouldhelp
overcomebottlenecksinthesupplychain.Thisincludesmanufacturersoffoundations,
offshoresubstations,cables,installationvesselsandturbines.
Industrialactivism
Improvingtheeconomicsupportmechanismandremovingbarrierstodeliverywillhelpto
buildconfidenceintheUKmarket.However,theUKmarketisnotlikelytobebigenoughto
guaranteethatnewjobswillbecreateddomestically.TheextenttowhichtheUKeconomy
andworkforcewillbeabletobenefitfromnewopportunitiesinoffshorewindwilldependon
howwillingtheGovernmentistoemployindustrialactivismandbestrategicinthechoices
itmakes.
SomeotherEuropeancountriesalreadyhaveastrongonshorewindindustriessotheUK
Governmentwillneedtotakeadvantageofthegame-changingnatureoftheoffshorewind
marketcomparedtocurrentonshorearrangementinordertoreapsignificantUK
employmentrewards.WithoutaproactivestrategythereisasignificantchancethattheUK
offshorewindmarketwillcontinuetorelyonimportsfromcontinentalEurope.Fromthe
pointofviewoftheclimatethismattersonlyalittle.Fromthepointofviewofenhancing
UKmanufacturingindustryitwouldclearlybeamissedopportunity.
9 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

Combiningtheevidencefrominterviewsconductedbyipprwithindustryplayerswithother
evidencesuggeststhattheGovernmentshoulddevelopanoffshorewindinvestment
programmefortheUKthatwouldberunbytheDepartmentofEnergyandClimateChange
(DECC)andadministeredthroughRegionalDevelopmentAgencies(RDAs)andUKTradeand
Investment(UKTI).Theprogrammewouldconsistofthefollowingelements:
Financialandtaxincentives. CurrentGovernmentgrantprogrammesandsupportfor
R&Darespreadtoothinly.Theymustbedrawntogetherintoamuchmoreclearly
definedandfocusedpackagethatwillbeeasiertomarkettopotentialinvestors.
Facilitiesandinfrastructuredevelopment.ThiswillhelpmaketheUKamore
attractiveplacetoinvest.Itshouldincludeidentifyingasiteforanearshoretest
facilityanduseofpublicandprivateinvestmenttoupgradeportfacilities.These
measuresshouldbetargetedataspecificgeographicalareainordertopromotea
growthcluster.
Short-termguarantees. Therecessioncouldmakeraisingfinancedifficultintheshort
termsoGovernmentshouldoffertounderwriteborrowingforthissectorand/or
encouragebankstolendtothissector.
Considerrequirementsforusinglocallyproducedcontent (componentsandsoon).
Thisapproachhasbeeneffectiveinothercountriesbutmayrunintodifficultieswith
WorldTradeOrganisationandEuropeanUniontraderules.Governmentshould
considerwhetheritmightbepossibletoimplementsuchanapproachindetermining
successfulbiddersinRoundThreeoftheoffshorewindprogramme.
Skills
Aswellasmaximisingthenumberofjobsavailable,governmentalsoneedstothinkmore
strategicallyaboutensuringthattheworkforcehastherightskillstotakeadvantageofthese
jobopportunities.ThereisashortageofengineeringandmanufacturingskillsintheUKand
thiscouldposeproblemsforthedeliveryofoffshorewindcapacity,andmakestheUKless
attractivetoinvestors.
Ananalysisofthelikelysizeoftheskillsgapisneeded,followedbyastrategicplanforhow
thegapwillbeclosed,toinclude:
Training.Asafirststep,amoreeffectiveapproachtoencouragingyoungpeopleto
studyScience,Technology,EngineeringandMathematics(STEM)subjectsneedstobe
found.
Attractingtheworkforce. Acomprehensivestrategyforattractingmorepeopleinto
thesectorwillrequireinputfromindustryrepresentatives,universitiesandsectorskills
councils(amongothers).Itcouldinclude:engagingwithcareersadviceservicesto
ensuretheyhavethemostup-to-dateinformationonopportunities,highlighting
effortstoforgelinksbetweenuniversitiesandindustry,andprovidingincentivesfor
peopletotakeuplow-carbon-sectorjobs.

Conclusions
TheUKcurrentlyhastheworldslargestinstalledoffshorewindcapacityaswellasambitious
plansforexpansionanditsgrowthoffersarealopportunityforjobcreationandtoremove
bottlenecksinthewindsupplychain.However,asinternationalexperienceshows,withouta
moreinterventionistapproachfromgovernment,theUKwillstruggletocaptureasignificant
shareofthesejobsgiventhatnearbycountriesalreadyhavingthrivingindustriesonwhichto
developthenewcapacitiesrequiredforoffshorewind.
Byremovingthebarrierstoinvestment,providingadditionalfocusedsupporttotheindustry
andbycreatingastrategytobuildupthenecessaryskillsbase,theUKwillbewellplacedto
10 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

reaptheemploymentbenefitsoftheshifttoalow-carbonenergysystem.Conversely,failure
toacttogainjobsinthissectorwillbeasignificantmissedopportunityastheUKmoves
towardsalow-carboneconomy.
11 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

Introduction
TheUKisfacingtoughtargetstoreduceitsemissionsofgreenhousegasesandtoincrease
itsuseofrenewableenergyby2020.Atthesametime,astheglobaleconomicslowdown
hitstheUKandunemploymentfiguresbegintorise,manyhavelookedtotheenvironmental
sectorasapotentialnewgrowthareathatcouldhelptocreatenewjobsandboostthe
economy.Theideathattacklingourenvironmentalproblemscouldsimultaneouslyprovide
goodqualityemploymentopportunitieshasledtonumerouscallsforaGreenNewDeal,
fromorganisationsrangingfromtheUnitedNations,totheEnvironmentAgencytotheNew
EconomicFoundationsGreennewdealgroup(UNEP2008,nef2008,EnvironmentAgency
2008).
TheoffshorewindsectorhaspotentialtobepartofaGreenNewDeal.Thereareambitious
planstoscaleuptheUKsoffshorewindcapacityoverthenextdecadeunderRoundThree
oftheCrownEstatessiteallocationprocessandachievingthisgoalwillrequirealarge
workforcetoplan,manufacture,installandrunthewindfarms.Yetmanyconsiderable
barriersremaintodeployingoffshorewindpowerintheUKand,evenifRoundThree
ambitionswererealised,thereisnoguaranteethatthejobscreatedwouldgototheUK.
ThispaperinvestigatesthebarrierstodeployingmoreoffshorewindturbinesintheUK,the
potentialforcreatingUK-basedjobsinthissector,andwhethertherearelessonsthatcanbe
learntfromtheexperienceofothercountriesindevelopingindigenousonshorewind
industries.
Thereportisbasedonaliteraturereviewandinterviewswithkeystakeholdersinthewind
industryacrossEurope,includingindustryassociations,developers,turbineandcomponent
manufacturersandprovidersofkeyservices(afulllistofintervieweesisincludedinAnnex
1).TheinterviewswereconductedinJanuaryandFebruary2009.
Section1examinestheopportunitiesforjobcreationinoffshorewindintheUKas
wellasthekeybarrierstodeliveringthesejobs.
Section2goesontolookatthesuccessesofbuildingonshorewindindustriesin
Denmark,GermanyandSpainandidentifieskeylessonsfromtheseexperiences.
ThefollowingthreesectionsthenapplytheselessonstotheUKcontext,focusingon
offshorewind.Thefirstlessonregardswhatneedstobedonetoprovideastableand
predictabledomesticmarket;thesecond,whatformsofindustrialactivismare
necessary;andthethird,whatkindsofskillsactivismwillbeneeded.
Thefinalsectionprovidesaconclusionandsummaryofkeypolicyrecommendations.
12 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

1.Offshorewindandemployment
Asthefall-outfromthecreditcrunchcontinuestospreadacrosstheUKeconomy,the
prospectofcreatinggreen-collarjobsasarouteoutofrecessionhasgainedmoreandmore
currency.AtthelaunchoftheLowCarbonIndustrialStrategy,thePrimeMinistersaid:
Iwanttoconstructaglobalgreennewdealthatwillpavetheway
foralowcarbonrecoveryandhelpusbuildtomorrowsgreeneconomy
today. (Number10,2009)
JimMurphy,MinisterforEurope,hasalsohighlightedGovernmentsupportfordeveloping
green-collarjobs:
Countriesthattakeearlyactionindevelopinggreentechnologywill
haveacompetitiveadvantageasthisboomindustrygrowsinthefuture.
TheGovernmentiscommittedtomakingsuretheUKisaheadofthe
packinthefuturewewantaneconomyofferingamixofgoodblue
collarjobs,goodwhitecollarjobsandgoodgreencollarjobs.Outaimis
tohaveoveramillionUKworkersinenvironmentalindustrieswithinthe
nexttwodecades.(ForeignandCommonwealthOffice2008)

Whilethetermgreen-collarjobsappliestomanydifferentindustries(includingrenewable
energygeneration,installationofenergyefficiencymeasures,providinglow-carbontransport
andmore)thefocusofthisreportisonjobcreationintheoffshorewindsupplychain.
Thissectionbeginsbydescribingwhyoffshorewindcouldbeagoodsourceofgreen-collar
jobsandwhytheGovernmentshouldpayparticularattentiontothissectorwhendeveloping
strategiestotackletherecessionandstimulateemployment.Wethengoontoconsiderhow
manyjobscouldbecreatedinoffshorewind,beforelookingateachstepofthesupplychain
inmoredetailtoidentifysomeofthebarriersandopportunitiesforjobcreation.

Whyoffshorewind?
Theglobaleconomicslowdownhasunderstandablyfocusedmindsonwherenewjobsmight
becreatedtobuildapathoutofrecession.Atthesametime,theimperativeoftackling
climatechangeisforcingGovernmentandbusinessesaliketoradicallyrethinkthefutureof
theUKeconomyinalow-carbonworld.
TheGovernmentiscommittedtodevelopingaLowCarbonIndustrialStrategy(HM
Government2009)thatseekstoensurethattheUKisbestplacedtobenefitfromthe
opportunitiespresentedbymovingtoalow-carboneconomy.Thisincludesinstallingthe
newlow-carboninfrastructurethatwillbenecessarytoachieveouremissionsreduction
targets,developingandproducingnewlow-carbonvehicles,helpingbusinessestoimprove
theirenergyefficiencyandmakingtheUKanattractivelocationforlow-carbonindustries
(ibid).
TheSecretaryofStateforBusiness,LordMandelson,hassuggestedthatanapproachof
industrialactivismthatwouldwidenanddiversifythespecialistbasesoftheUKeconomy
andfocusonhowwefurthercommercialiseandinternationalisethesebases(Mandelson
2008)wouldleavetheUKbetterplacedtodealwiththeconsequencesoftheslowdownand
tobuildanewlow-carboneconomy.TheGovernmentalsohasa158millionfundto
supportandprovidetrainingopportunitiesfortheunemployed(DepartmentforWorkand
Pensions2009).Thequestion,ofcourse,iswhereshouldthisattentionbefocused?
13 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

Werecognisethattherearemanydifferentsectorsthathavethepotentialtodrivethenew
low-carboneconomy.WhiletheLowCarbonIndustrialStrategymustencompassallofthese
sectors,suchabroadanalysiswasbeyondthescopeofthisresearch.Althoughthefocusfor
thisreportisoffshorewind,thisdoesnotmeanthatwebelieveoffshorewindshouldreceive
attentionattheexpenseofotherrenewableenergytechnologies.Ratherweseektoprovide
anexampleofthekindsofmeasuresthatarelikelytobeneededtobringforwardjobsand
economicbenefitsfromnewgreenindustries.
Wehavechosentofocusonoffshorewindforfourmainreasons:
1.OffshorewindisasectorwithgrowingimportancefortheUK
TheUKcurrentlyhasthelargestinstalledoffshorewindcapacityintheworldandhas
ambitiousplanstopromotearapidandlarge-scalegrowthinoffshorewindfarms.Offshore
windisexpectedtomakealargecontributiontomeetingrenewableenergytargetsand
carbonreductionbudgetsfor2020,unlikemanyotherrenewableandlow-carbonenergy
technologies,whichwillnotbeabletobedeployedonsuchashorttimescale(thisis
exploredinmoredetailbelow).ItisclearthatiftheUKexpandsitsoffshorewindcapacityas
planned,thenalargeworkforcewillbeneededtoplan,manufacture,installandoperatethe
newwindfarms.
2.Offshorewindprovidesgoodlong-termprospects
Whileitisunderstandabletowanttofocusonshort-termjobcreationopportunitiesthatwill
helptacklethecurrentrecession,itisimportanttoconsiderthelong-termprospectsfor
thesejobswilltheystillexistindecadestocome?
Offshorewindmaynotprovideinstantnewjobs,butitdoesoffergoodmedium-term
prospects.Inaddition,jobsinoffshorewindarelikelytobesustainableoverthelongerterm
becauseunlikejobsincarbon-intensiveindustriesoffshorewindislikelytobea
prominentfeatureofthenewlow-carboneconomythatisnecessarytomeetourclimate
changeobligations.
3.Offshorewindhaspotentialforcompetitiveadvantageandexportopportunities
ThisisclearlyasectorwheretheUKhasthepotentialtodevelopacompetitiveadvantage.
Germanyisalsodevelopingitsoffshorewindmarketanditispossiblethatothercountries,
includingtheUSA(theCapeWindProjectAmericasfirstoffshorewindfarmiscurrently
goingthroughthepermittingsystem[CapeWind2009]),ChinaandotherEuropean
countrieswillfollowsuit.Developinganexperiencedoffshorewindworkforcecouldtherefore
provideopportunitiesinthefuturetoexporttheseskillsasothermarketsmature.Similarly,if
weareabletoattractmanufacturingfacilitiestoopenintheUK,thereisscopeforfuture
exportofcomponentsandturbines.Thereisalsothepotentialthatoncecompaniesare
established,theymayinnovateandcreatenewmarketsanopportunitythatwouldbe
missedifcompanieslocateoverseas.
4.Offshorewindhasthepotentialtoprovidegoodqualityjobsintherightplaces
Itisimportanttogiveconsiderationtothequalityofthejobsthatwillbecreatedthrougha
LowCarbonIndustrialStrategywilltheyprovidegoodcareerdevelopmentopportunities?
Willmoreeconomicallydeprivedareasofthecountrybeabletobenefitfromthenewjobs?
Andwillpeoplewhoarecurrentlyunemployedorworkinginindustriesthatarelikelyto
declineinthefuturebeabletobenefitfromthenewjobopportunities?
Althoughtherehavenotbeenmanystudiesinthisarea,thereissomeevidencetosuggest
thatoffshorewinddoeshavethepotentialtooffergoodquality,career-trackjobs.For
example,studiesoftheSpanishandGermanrenewablesindustrieshaveshownthatthey
offergoodjobprospects,careerpathsandjobsecurity(UN2008).
14 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

ItisalsolikelythataUKoffshorewindindustryislikelytobelocatedinsomeofthemore
economicallydeprivedregionsoftheUK.Offshorewindcouldofferanalternativecareer
optionforthosecurrentlyemployedintheoffshoreoilandgasindustry,whichislikelyto
declineoverthenextdecadeasreservesintheNorthSeadeplete.Manyoftheskillsfrom
thissectorcanbetransferredtooffshorewindandthejobsarelikelytobelocatedinroughly
thesamegeographicalareas.Therearealsoopportunitiesforpeopleworkinginthe
automotiveandaerospaceindustriestomoveintooffshorewind.
Takentogether,thesefourreasonssuggestthatoffshorewindisanareaofstrategic
importancefortheUKandassuchwouldbeagoodsubjectforindustrialactivism.

Theopportunity:jobcreationfromexpandingUKoffshorecapacity
Thecaseforpursuingastrategytosupportthecreationofjobsinoffshorewindhasbeen
made.Wenowturntothequestionofhowmanyjobsarelikelytobecreatedinthissector.
However,beforewecanlookatnumbersofjobs,itisfirstnecessarytounderstandthelevel
ofambitionforincreasingoffshorewindintheUK.
Targetsandforecasts
TheUKhastwoimportanttargetsfor2020towhichoffshorewindisexpectedtomakea
significantcontribution:
ThefirstisaEuropeantarget,toachieve15percentofenergyfromrenewables,set
outinthenewEuropeanDirectiveonRenewableEnergies,whichwasadoptedin
December2008(EurActiv2009).
Thesecondisadomestictarget,setoutintheClimateChangeAct,toreduce
emissionsofgreenhousegasesbyatleast26percentfrom1990levels.However,the
CommitteeonClimateChangehasrecommendedbudgetsthatimplyareductionof29
percentuntilaglobalagreementisreachedand40percentonceanagreementis
reached(CommitteeonClimateChange2008).
TheGovernmentsRenewableEnergyStrategyconsultationdocumentsuggeststhatinorder
tomeettherenewablestarget,aroundathirdormoreofourelectricitywillneedtocome
fromrenewablesourcesandoffshoreandonshorewindareexpectedtoprovidealarge
proportionofthis(theGovernmentsillustrativescenarioshowsoffshorewindcontributing
40percentofrenewableelectricityneedsandonshore28percentby2020)(HM
Government2008a).Othertechnologies,suchasmarinepower,areunlikelytobe
sufficientlydevelopedtomakemuchofacontributiontothe2020target,butmaybecome
moresignificantinlateryears.
The2020targetsareambitious.Lessthan5percentoftheUKselectricitycomesform
renewablesourcestoday(HMGovernment2008a),soalargeexpansioninrenewable
generatingcapacitywillbeneededtomeetbothtargets.Offshorewindisexpectedto
providethelionsshareofrenewableelectricityby2020yetthereisstillagreatdealof
uncertaintyaboutwhethertherewillbeenoughwindfarmsupandrunningtomeetthis
requirement.
Anumberofstudieshavemadeestimatesofthecapacitylikelytobeavailablein2020(see
Table1.1below).Foroffshorewind,estimatesrangefrom10.7GW(DouglasWestwood
2008)to18GW(RenewablesAdvisoryBoard2008).However,theCarbonTrustcalculates
that29GWwillbenecessarytomeetthe2020renewablestarget(CarbonTrust2008)and
thetimetableforRoundThreeoftheoffshoresiteallocationprocesscontainsatargetforan
additional25GWtobebuiltby2020(whichwouldgiveatotaloffshorewindcapacityof
33GWwhencombinedwiththeexisting8GWinoperation,constructionorplanning)(The
CrownEstate2008).TheGovernmentiscurrentlyconsultingonitsStrategicEnvironmental
Assessmentoftheseplans(DECC2009).
15 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

Table1.1.Estimatesofoffshoreandonshorewindcapacityin2020
Study
GovernmentsRenewableEnergyStrategy
(HMGovernment2008a)
DouglasWestwoodsupplychainstudyfor
BERR(DouglasWestwood2008)
Bain&CompanystudyforBWEA
(Boettcheretal 2008)
RenewablesAdvisoryBoard(RAB2008)
CarbonTrust(2008)
Onshoreandoffshorewindcapacityin2020
Upto33GWofoffshorewindmaybepossibleby2020,butmodelling
showsthatdeploymentmaybecloserto14GW
14GWonshorewind
10.7GWoffshorewind
14GWonshorewind
Containsthreescenarios:
Staticscenario:22GWonshore+offshorewind
Solidprogress:27GWonshore+offshorewind
Dynamicscenario:34GWonshore+offshorewind
18GWoffshorewind
13GWonshorewind
29GWofoffshorewindwillbenecessarytomeet2020renewablestarget

Jobforecasts
TheUKwindindustry(onshoreandoffshorecombined)currentlyemploysaround4,000to
5,000people(EWEA2009,Boettcheretal 2008)andthisfigurewillincreasesignificantlyif
therapidexpansionofoffshorewindcapacitygoesaheadasplanned.Forecastsofjob
numbersin2020varyquiteconsiderablyfromjust23,000jobsinthewindsectorto133,000
jobsincentralisedrenewableenergy(Table1.2).

Table1.2.Forecastsofjobscreatedrenewableenergy,windandoffshorewindin2020
Source Jobforecast(2020) Sector Assumptions
GovernmentsRenewableEnergy 133,000 Centralisedrenewable Thesejobsmaynotnecessarily
Strategy(HMGovernment energygeneration allaccruetotheUK
2008a) 14GWoffshorewind
14GWonshorewind
CarbonTrust(2008)Offshore 40,00070,000 Offshorewind Basedon29GWcapacity
windpower:bigchallenge, installedby2020
bigopportunity
Boettcheretal (forBWEA) Dependingonscenario: Onshore+offshore Scenarios:(totalwindcapacity
(2008)Acloserlookatthe 23,000 wind in2020)
developmentofwind,wave 36,000 22GW
andtidalenergyintheUK 57,000 27GW
34GW
DouglasWestwood(2008) Dependingonscenario: Windpower Scenarios(basedonnumberof
Supply-chainconstraintson 5,000 turbinemanufacturerslocatinginUK):
thedeploymentofrenewable 14,000 locatinginUK):
electricitytechnologies 34,000 Low(onemanufacturer)
Mid(twomanufacturers)
High(threemanufacturers)
16 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

Table1.3givesamoredetailedbreakdownofjobcreationacrosstheoffshorewindsupply
chain.

Table1.3.Breakdownofjobsacrossthesupplychainby2020,accordingtotwosources
a)SQWEnergy(2008) Max.no.jobs Min.no.jobs
Planninganddevelopment 5,965 2,060
Designandmanufacturing 14,095 4,865
Constructionandinstallation 15,720 5,420
Operationsandmaintenance 13,550 4,680
Technical,financialandlegalservices 4,880 1,685
Totaladditionaljobs 54,210 18,710
Totaljobs(windonly) 56,900 23,100
b)CarbonTrust(2008) Max.no.jobs Min.no.jobs
RD&D,engineeringanddesign 4,000 3,000
Turbineandcomponentmanufacturing 15,000 7,000
Services 22,000 22,000
InstallationandOperationsandmaintenance 29,000 8,000
Total 70,000 40,000

Thereisclearlyhugepotentialforjobcreationasaresultofexpandingoffshorewind
capacity,butwhatislessclearishowmanyofthesejobswilloccurintheUKandto
whatextentlocalpeoplewillbenefit.(Ontheotherhand,theseestimatesdonotinclude
opportunitiesforjobcreationintheUKasaresultofothercountriesdevelopingoffshore
windcapacity).Wenowconsiderwherethesedifferentjobsarelikelytobelocated.

OpportunitiesforandbarrierstoUK-basedjobsinoffshorewind
Sincecreatingnewjobsisimportantfortacklingtherecession,Governmentwillwantto
ensurethatasmanyofthejobscreatedbyoffshorewindarelocatedintheUKas
possible.SomejobsinoffshorewindaremorelikelytoaccruetotheUKthanothersfor
example,jobsinoperationandmaintenance,whichrequireregularvisitstothewind
farmsinquestion,aremuchmorelikelytoberecruitedlocally(UN2008).However,other
jobs,suchasthoseininstallationandmanufacturing,willnotnecessarilybeasclosely
tiedtotheUK.
Forexample,companiesinvolvedwithUKoffshorewindprojectscurrentlybringover
high-levelstafffromthecountriesinwhichtheyarebasedtooverseeprojectsandalso
hiremigrantlabourwherethereareskillsshortagesintheUK(forexample,in
construction).AstudyoftheScrobySandswindfarmdevelopmentinNorfolkshowed
thatUKlabouraccountedfor73percentofthetotalman-hoursindevelopment,70per
centinconstructionand82percentinoperation(DouglasWestwood2005).Thereis
clearlyariskherethatunrealisticexpectationscouldberaisedamongmembersofthe
publicabouthowmanynewjobswillbecreatedwiththeexpansionofoffshorewind,
andthiscouldposepoliticaldifficulties.However,itshouldalsoberememberedthatthe
developmentofoffshorewindinothercountriescouldresultinemploymentbenefitsfor
theUK,whicharenotgenerallyaccountedforinthejobprojections.
Inthissectionwelookatthedifferenttypesofjobacrosstheoffshorewindsupplychain
andexaminewhattheopportunitiesandbarriersaretolocatingthesejobsintheUK.
17 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

Technicalconsultancy
Someofthefirstjobstobecreatedintheoffshorewindsectorwillbegeneratedbythe
needtoputtogetherplanningapplicationsandcarryoutenvironmentalimpactassessments.
SuccessfulbiddersintheRoundThreeoffshoreallocationprocesswillbeawardedexclusive
rightstodevelopwindfarmsinanumberofspecificallydefinedzonesaroundthecoastof
EnglandandWales.Producingplansforthesedevelopmentswillbelikelytoincrease
demandfortechnicalconsultancies.
ThisisanareainwhichtheUKalreadyhasabaseofexpertiseandmuchofthistypeof
workforRoundOneandRoundTwohasbeendonebyBritishfirms.Itistherefore
consideredtohavegoodpotentialforfuturegrowth.
Quitealotofthesupply-chainactivitytodatehasbeenfocussedon
themanufacturingofturbinesandcomponentsandnotenoughonthe
widervaluechainincludingtechnicalconsultancy,logisticsand
OperationsandMaintenancewheretheUKhassomestrong
capabilities.RegionalDevelopmentAgency,interviewwithippr
Research,designanddevelopment(RD&D),engineeringanddesign
TheCarbonTrustnotesthatalthoughmanyRD&D,engineeringanddesignjobsarelikelyto
occurinothercountries(becausemanufacturinghubsarealreadyestablishedforboth
turbinemanufacturersandcomponentsuppliersseebelow),thereisstillscopetogenerate
somejobsinthissectorwithintheUK.TheCarbonTrustestimatesthatitispossibleto
attract20to30percentofglobaloffshorewindRD&DtotheUK(CarbonTrust2008).
Turbineandcomponentmanufacture
Jobsinturbineandcomponentmanufacturearehighlysoughtaftersincetheyaccountfora
largeproportionofthejobsandvaluecreatedbyexpandingtheuseofwindpower.The
EuropeanWindEnergyAssociationestimatesthatatotalof59percentoftheworkforce
directlyemployedintheEuropeanwindsectoreitherworkforcomponentmanufacturersor
turbinemanufacturers(EWEA2009a).Establishingaturbineand/orcomponent
manufacturingbasecanhaveknock-onbenefitsasjobsarealsolikelytobecreatedamong
second-tiersupplycompanies.
Itisimportanttodistinguishbetweenthethreedifferenttypesofmanufacturingmodelthat
countriescanhave:
Full,local,turbinemanufacturing
Localmanufacturingofselectedcomponents
Assemblyofturbinesfromimportedcomponentsbylocalemployees.
(LewisandWiser2005)
Belowweconsidereachofthese,whilealsoreflectingonthequestionofwhetherlocal
manufacturingcompaniescoulddiversifyintothewindsector,orwhetherexistingforeign
companiescouldbeencouragedtosetupfactoriesintheUK.

Fullturbinemanufacturing
Clearly,theidealfromaUKeconomicpointofviewwouldbetoestablishafullturbine
manufacturingbasebecausethiswouldcreatethemaximumnumberofjobs,maximisetax
revenuesandalsopotentiallyleadtoexportopportunities.
Mostcommentatorsagreethattheroutetoestablishingfullturbinemanufacturingistofirst
attractaturbinemanufacturertolocateintheUK,whichwillinturndrawincomponent
manufacturerstosetupnearby(CarbonTrust2008,DouglasWestwood2008).
18 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

Buthowlikelyisthisto Box1.1:ClipperWindPowerinvestmentintheUK
happen?Althoughthe
AmericanwindcompanyClipperWindPowerhasrecently
Governmentisworkingto
establishedanoffshorewindturbinedevelopment
attractamajorturbine
operationinBlyth,NorthEastEngland.Thecompanyis
manufacturertosetupinthe
workingtodevelopaprototypeoffshorewindturbine
UK,anddespitethesuccess
andtheprojectwillmakeuseofthebladetestingand
storyofClipperWind
manufacturingfacilitiesattheCentreofExcellencefor
establishingacentreto
NewandRenewableEnergy(NaREC),whichwas
developanewoffshore
establishedbythelocalRegionalDevelopmentAgency,
turbineinBlyth(seeBox
OneNorthEast(NaREC2009,UKTradeandInvestment
1.1),manystakeholdersare
2009).OneNorthEastisalsoinvestinga5mpackageof
stillscepticalaboutthe
supportintotheproject.
chancesofachievingfull
turbinemanufacturingin Thedevelopmentoftheturbineisexpectedtocreate25
theUK. skilledengineeringjobsinthefirstinstance,butthereare
alsohopesthatoncethetechnologyhasbeen
Therearetwoprimary
successfullydeveloped,manufacturingwillalsobecarried
reasonsforthis.First,theUK
outintheUK(NaREC2009).
willhavetocompetewith
countrieslikeDenmark, ClipperWindhasannouncedthatitwillbuildanoffshore
GermanyandSpain,which windturbinefactoryinNorthernEnglandthatwillbeable
alreadyhaveestablished tomanufactureturbinesby2015(Nakanishi2008,One
windindustriesandskills NorthEast2008).
bases(andpotentiallyChina Theinitialinvestmentcameaboutthroughacollaborated
andIndiainthefutureif effortbetweenBERR,OneNorthEastandUKTradeand
productioncostsarelower Investment(DouglasWestwood2008).
thantransportationcosts).
Second,thesizeofthe
offshorewindmarketintheUKmaynotbesufficienttomakeitworthwhileinvestingin
afactory,particularlywhencomponentscanbeshippedfromnearbyEuropeancountries.
Formanufacturerswhohaveexistingcomponentorturbinefactoriesinmainland
Germany,expandingexistingcapacitytosupplytheoffshorewindmarketlooksmore
appealingthanstartinganewfactoryfromscratchintheUKbecausetheskillsand
knowledgeofproductionprocessesarealreadythere.Aslongasthefactorieshavegood
accesstothesea,itwillnotbetoodifficultforthemtosupplytheUKmarket.
TherearethemajorplayersandtheyvebeenbasedinDenmark,
Germanyandtheyrequitehappystilltobebasedtheretosupply
theirmarketsowhyshouldtheymove?Turbinemanufacturer,
interviewwithippr
Anadditionalbarriertoattractinginvestmentfromforeigncompaniesistheuncertainty
causedbytheexchangerate.Asageneralrule,manufacturersliketooperateinthesame
currencyasthemarkettheyaresellingintobecauseexchangeratefluctuationsintroduce
uncertaintyintothebusinessmodel.AtfirstglancethismayappeartoputtheUKina
strongerpositionsinceintheshorttermatleastthemarketforoffshorewindisgoingto
bemainlyintheUK.Butthisisnotnecessarilythecase,fortworeasons.First,theUK
marketmaynotbelargeenoughtowarrantdedicatedfactories,thereforetheywillbe
supplyingothermarketsaswellastheUKandhencedealinginothercurrencies.Second,
sincealloftheexistingmajorturbinemanufacturersareforeigncompanies,settingup
factoriesintheUKwouldincreaseriskintermsoflabourcosts,whichwouldbepaidin
Sterling.
19 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

Whileitmightbedifficulttoattractmanufacturerswhoalreadyhaveestablishedbases
elsewhereinEurope,theremaybescopefordrawinginotherturbinemanufacturers,who
haveyettoestablishabaseinEurope,ornewentrantstothemarket.
Therefore,effortsaimedatattractingforeigncompaniestoinvestintheUKshouldbe
focusedonthosewhodonotalreadyhaveanestablishedEuropeanbase.

Componentmanufacturing
Manyofthestakeholdersinterviewedforthisprojectfeltthatitmightbemorefruitfulto
focuseffortsondevelopingmanufacturingcapacityonafewareasofthesupplychainin
whichtheUKcouldhaveacomparativeadvantage.TheUKcurrentlyhasonlyonefactory
manufacturingturbinecomponentsaVestasbladefactoryontheIsleofWight.Further
componentsthatwereidentifiedbyintervieweesasonesthatcouldbemanufacturedin
theUKwere:foundations,towers,cablesandelectricalcomponents.Themarketfor
manufacturingothercomponentsparticularlythenacelle(thepartoftheturbinethat
containstherotorhub,gearbox,generatoranddrivetrain)andtheinternalcomponents
wasthoughttohavebeenalreadycapturedbyothercountriesinEuropewhowouldbe
reluctanttoseeothernationstakingonthiswork,giventhehighfinancialvalueofthese
components.
TheUKsgoodatcertainthingsandnotatotherthingssowedont
have,forexample,thecapacityforbigcastingsbutwedohavealot
oftheotherskillswhicharerequired:ongenerators,theassemblyof
thethings,electricalcomponentstheinverters,transformersetc.
theresnoreasonwhysomeofthesteelworkcantbedonehere
makingtowersandfoundationsandobviouslythingslike
fibreglassthatweuseinblades.Turbinemanufacturer,interview
withippr
Towersandfoundationsinparticularstandoutaslikelycandidatesforlocal
manufacturing.Thisispartlybecause,giventheirsizeandweight,thesecomponentsare
difficulttotransport,andpartlytheUKalreadyhasaknowledgeandskillsbasein
makingthesecomponents,gainedfromtheoffshoreoilandgasindustry;theothermain
playerinoffshorewindGermanydoesnothavethesamehistoryofoffshoreindustry.
Inaddition,foundationshavebeenidentifiedasabottleneckinthesupplychainthat
couldjeopardisethe2020target,sogrowinganindigenousfoundationmanufacturing
industrywouldalsomakesenseforthisreason(CarbonTrust2008).
ThereisscopeforUKcompaniestodiversifyintocomponentmanufacturing:in
particular,theautomobileandaerospaceindustrieshavebeenidentifiedashaving
potentialtomoveintooffshorewind,aswellascompaniesproducingcablesandthose
manufacturingfoundationsandplatformsforoffshoreoilandgasandthoseoperatingat
thesecondtierofthesupplychain.However,nocomprehensiveanalysishasbeen
conductedtoidentifywhichexistingcompanieshavethepotentialtodiversify.We
recommendthatGovernmentconductamappingexercisetobetterunderstandwhich
companiescouldmoveintotheoffshorewindsupplychain.
However,thesecompaniesmayneedfinancialsupport(forexample,throughcapital
grants)inenteringthesupplychainbecausecostsarehigh.Theymayalsorequire
assistanceinmarketingthequalityandreliabilityoftheirproductsasqualitycontrolisa
primaryconcernforturbinemanufacturers(DouglasWestwood2008).Andtheywillneed
tobepersuadedthatthereisagenuineandstablemarketforoffshorewindcomponents.
20 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

Weneedtoprequalifyanysupplierthatweprocureequipmentfrom
andthatcantaketime.Dependingonthecomponentitmaytake
monthsorayear.Wewanttoknowthatoursuppliersarefinancially
stable,theycanworkwithourprocurementprocesses,thattheyhave
thedesign,quality,andreliabilitythatwedemand.Thattheyare
willingtoworkwithinoursocial,environmentalandethical
requirementsandthattheyarewillingtoworkwithustodevelopa
stronglong-termrelationship.Manypotentialsuppliersdonotrealise
howlongitmaytakeforthemtobeapproved.Turbinemanufacturer,
interviewwithippr
TheexperiencetodateintheUK,whereamarkethasbeenpromisedforyearsbuthasnot
yetmaterialised,hasnotbuiltconfidenceintheoffshorewindmarket.Intervieweestoldof
newentrantsintheUKwhohadtriedtomoveintosupplyingtheoffshoremarketbutfailed
becausetherewasnotabigenoughmarketfortheirproducts.Inordertoattractnew
entrantsanddiversification,itwillthereforebenecessarytoincreaseconfidenceinthesize
andcertaintyofthemarket.ThereisasensethatviewstowardstheUKmarketarestarting
tochange,buttherearestillmanyuncertaintiesaboutthefutureofthemarketthatare
currentlyundermininginvestorconfidence.ThisisexplainedfurtherinSection3below.
Heretoforethemarkethasntbeenstableenoughon-oroffshoreto
getthekindofvolumeandstabilitythatsnecessary. Industry
spokesperson,interviewwithippr
SincethefirstUKoffshorewindprojectatBlythNorthumberlandthere
havebeenanumberofon/offinitiativesandthemarkethasnever
reallykickedoff.Nowthecompanystrategieshavestartedtochange
andbusinessconfidenceappearstobegrowingonthebackofa
strongergovernmentdriveandmomentumthroughRound3.Although
itmighttakelongertoimplementintodayseconomicclimatethan
theyexpectedsixmonthsagoitsanopportunitythatcompaniesare
investinginnow. RegionalDevelopmentAgency,interviewwithippr
Barrierstoattractingforeign-ownedcompaniestoestablishcomponentmanufacturing
factoriesintheUKaresimilartothosementionedaboveregardingfullturbinemanufacture.
Namely,thatthemarketmaynotbelargeenoughtojustifyanewfactory,itmaybeeasier
toexpandexistingfacilitiesinEuropeandexporttotheUKmarketanduncertainty
introducedbytheexchangeratemaybeunattractive(forexample,somecurrentDanish
suppliersalwaysagreetheircontractsinEurosratherthanDanishKrone,sodealingwithUK-
basedsubcontractswouldaddanadditionalrisk).
[TheGovernment]reallyshouldgoforadditionaljobsproduction
phasestheyneedtoencouragethemanufacturingindustryreallyto
createalargernumberofjobsallthesethings[turbinecomponents]
areprettyexpensivetomovearoundbutneverthelessitsmuchmore
economicaltodaytoimportthesefromEuropeintotheUK.Andthey
needtochangethepictureiftheywanttocreatejobs.Component
manufacturer,interviewwithippr

Assembly
TurbineassemblylooksaviableoptionfortheUK.Themainbarriertoachievingthisis
ensuringthattherightinfrastructureisinplace.Thiswillrequireinvestmentinportfacilities
21 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

andotherlocalinfrastructureaswellasensuringthereissufficientspaceavailabletosetup
anassemblyplant.
Afinalimportantfactorthatappliestoallmanufacturingjobsisthequestionofwhetherthe
UKmarketwillbelargeenoughtomakeitworthwhileforcompaniestosetupnew
manufacturingfacilitiesintheUK.
Installation
InstallationofwindturbinesisanotherareawheretheUKcoulddrawonitsexistingskills
basefromtheoffshoreoilandgasindustry.Thereisalsopotentialtoexportthesejobsas
theoffshorewindmarketdevelopsglobally.
Thereismassivepotentialtoexportskills[inconstructionand
operationandmaintenance]. Developer,interviewwithippr
Operationandmaintenance
Mostindustryexpertswouldagreethatoperationandmaintenance(O&M)whichincludes
monitoringoftheturbines,routineservicingandmaintenanceandrepairsistheareawhere
themajorityofthejobsarelikelytoaccruetotheUK.Thisisbecausetheworkforcewillbe
requiredtoliveneartothewindfarm.Again,thereispotentialtobuildonknowledgeand
skillsfromtheUKsexistingoffshoreoilandgasworkforce.
StakeholdersalsonotethatO&Mjobsarelikelytobegoodqualityskilledjobswithlong-
termstabilityoverthelifetimeofthewindfarm.
ThebarrierstocreatingO&Mjobsforplannedoffshorecapacityexpansionarethelackof
suitableskillsandalackofsuitableinfrastructure.TheCarbonTrustidentifiesalackofport
facilitiesinparticularasabarrier(CarbonTrust2008).
Services
Agrowingoffshorewindindustrywillalsocreateopportunitiesinthefinancialandlegal
sectors(forexampleinfinancingwindfarms).Thisisalsoconsideredtobeanareawherethe
UKhasacomparativeadvantageandexistingskillsbaseandagainthereispotentialto
exportthesejobs.TheCarbonTrustestimatesthattheUKcouldprovidethesekindsof
supportservicesforover50percentoftheglobaloffshorewindindustryby2020,creating
22,000jobsintheprocess(CarbonTrust2008).
Ingeneral,intervieweestendedtoagreethattechnicalconsultancy,operationand
maintenanceandservicejobsweremorelikelytoaccruetotheUK,whilemanufacturingjobs
weremorelikelytobebasedoverseas.
Alotofjobswillbecreatedobviouslythroughtheoperationsand
maintenanceandvirtuallyallourworkwedoonenvironmentalsurveys
andconsultanciesgoestoBritsalotoftheengineeringforour
projectsisdonebyBritishconsultanciessotheworkloadandthe
opportunitiesareboominganditsintheknowledgesectorsitsquite
aboomtimeforthosesectorsbutwhenyoucomedownto
manufacturingplantstherewillbeImsuremoreBritishinputbutI
cantseeaneasywayofusmakingsubstantialinroads. Developer,
interviewwithippr
22 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

2.Creatingjobslessonsfromtheonshorewindindustry
Thereisclearlymuchpotentialforjobcreationintheoffshorewindindustrybut,aswe
haveseen,agreatdealofuncertaintyremainsaboutthenumberofjobsthatmightbe
createdandwheretheyarelikelytobelocated.Thisuncertaintystemsfrommany
factors,includingtheeffectivenessofgovernmentpolicy,economicconditionsand
publicacceptability.
ThissectionlooksattheexamplesofDenmark,GermanyandSpainallofwhichhave
beenverysuccessfulindevelopinglocalonshore windindustriestoidentifywhich
factorswereimportantintheirsuccess.WeaskwhethertherearelessonsfortheUKin
buildingupanoffshorewindindustryandinmaximisingthejobcreationopportunities.

Denmark
Denmarkcapitalisedonitsfirstmoveradvantagetobuildupasignificantwindenergy
industry(CentreforSustainableEnergy2005,EWEA2009a).Approximately23,500
peoplearedirectlyemployedtodaybywindenergycompaniesandmanysignificant
globalturbineandcomponentmanufacturers,aswellasserviceproviders,areDanish
companies.ThisincludesVestas,theworldsleadingturbinesupplier,andanotherofthe
worldstop10manufacturers,Siemens(whosewindpoweroperationsarebasedin
DenmarkafterSiemensacquiredBonusEnergy,aDanishwindturbinemanufacturerin
2004)(BTMConsultApS2008,EWEA2009a).Denmarkalsoexportsasignificant
numberofwindturbinesandcomponentsaround40percentofcurrentglobal
capacityisproducedinDenmark(EWEA2009a).
OneofthemainfactorsbehindDenmarkssuccesshasbeenthewayinwhichthe
marketforwindwasdeveloped.InstalledcapacityinDenmarkrosesteadilyfromless
than1GWin1996tojustover3GWin2003(DanishWindIndustryAssociation2009).
Thisstableannualgrowthwasfacilitatedbyastrongpoliticalcommitmenttothe
developmentofwindandtheuseofafeed-intariffsupportmechanismwhichprovided
aconsistentfinancialsupportmechanism(LewisandWiser2005,CentreforSustainable
Energy2005,Tokeetal 2008).Thecertaintyofthismarketwasimportantingiving
companiestheconfidencetoinvestinR&DandmanufacturingfacilitiesinDenmark.
TheDanishgovernmentalsoprovidedsomedirectsupportmechanismstoaidthe
developmentofthewindindustry.Theseincluded:
GuaranteedloansforlargeprojectsusingDanish-madeturbines(theWind
TurbineGuarantee)
Usingcustomsdutiestofavourtheimportofcomponentsratherthanassembled
turbines
Providingtied-aidwherebygrantstodevelopingcountriesweremadeon
conditionthatDanishwindturbineswouldbeimported
ProvidingawelltargetedR&Dbudget
UsingqualitycertificationtoeffectivelydemandtheuseofDanish-madewind
turbinesforprojectsinDenmark(sincemanufacturersfromothercountriescould
notmeetthesestandards).
(LewisandWiser2005)
23 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

Germany
GermanyhasEuropeslargestwindworkforcewith38,000peopledirectlyemployedtoday
(EWEA2009a).Itisalsohometotwooftheworldstoptenturbinemanufacturers
EnerconandNordexandhasa28percentshareoftheworldmarket(BTMConsultApS
2008,GermanWindEnergyAssociation2008).
LikeinDenmark,thegrowthofGermanyswindmanufacturingindustrywasmadepossible
byastrongpoliticalcommitmenttowindandastablefinancialsupportmechanismthe
feed-intariff.Theintroductionofthefeed-intariffwassupportedbyallmajorparties(with
onlyoneexception)anddespiterevisionsovertime,hasmaintaineditsessentialfeaturesof
guaranteedreturnstoinvestors,lowlevelsofriskandlong-termstability(Szarkaand
Blhdorn2006:6).Thisinturnhascreatedanattractiveclimateforinvestmentinwind
energyandGermanyscapacitygrewfromaround2GWin1997toover18GWin2005,with
aninstallationrateof1,500MWperyearbetween1999and2004(GermanWindEnergy
Associationn.d.,LewisandWiser2005).
Thedevelopmentofthewindmarketstimulatedgrowthinmanufacturingandjobsand,of
course,Germanyalsohadtheadvantageofalreadyhavingastrongengineeringbase(Szarka
andBlhdorn2006).Thisdidnothappenbyaccident:thepotentialeconomicbenefitsof
increasingtheuseofrenewableenergywererecognisedbytheGermangovernment.Inhis
forewordtothe2000RenewableEnergySourcesAct,FederalEnvironmentMinisterJrgen
TrittenacknowledgedthattheActopensupgreatopportunitiesnotonlytoenhanceour
futureenergy-mixbutalsointermsofskilledjobsandexports(FederalMinistryforthe
Environment,NatureConservationandNuclearSafety2000:3).
Thefeed-intariffwaskeytodevelopingGermanyswindindustry,butadditionalsupport
mechanismshelpedtostimulatethesector.Theseincluded:
Theprecursortothefeed-intariff,whichwasaperkWhsubsidyofferedunderthe
100MWWindProgramme(laterexpandedto250MW).Thisprogrammehelpedto
developGermanwindtechnologyandtoestablishamanufacturingbase
SoftloansforcapitalinvestmentinGermanwindenergyprojectswereavailable
fromthestate-ownedbanksundertheEnvironmentandEnergyConservation
ProgrammeandtheEnvironmentProgramme
Theuseoffavourablecustomduties(tofavourtheimportofturbinecomponents
ratherthanturbines)
Theuseoftied-aidexportcreditassistance
Qualitycertification
R&Dfunding
(LewisandWiser2005,SzarkaandBlhdorn2006)

Spain
AlthoughSpainswindindustrydevelopedlaterthanDenmarksandGermanys,itisstilla
majorplayerintheworldswindmarket.Approximately20,500peopleareemployeddirectly
inthewindindustryinSpainincomponentmanufacture(32percent),specialisedservice
provision(31percent),turbinemanufacture(16percent),anddevelopmentandoperation
(21percent)(EWEA2009a).TwooftheworldstoptenturbinemanufacturersareSpanish
companies(GamesaandAcciona)andthereisalargemanufacturingbaseinSpainitself,
withover70turbineandcomponentfactoriesacrossthecountry(AEE2008,BTMConsult
ApS2008).Spainalsohasahealthyexportindustry,havinginstalled8.5GWofcapacityin
25countriesaroundtheworldtodate(AEE2008).
24 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

Spainhasperhapsbeenmoreexplicitinitsaimtogrowalocalwindindustrythanhas
DenmarkorGermany(althoughapursuitofeconomicbenefitswasundoubtedlyimportant
tobothofthesecountriestoo).Asaresult,policieshaveaimednotonlytoincreasetheuse
ofrenewableenergybutalsotoattractforeigncompaniestoestablishmanufacturingbases
inSpain(Lewis2007a,CentreforSustainableEnergy2005).
Politically,therehasbeenclearsupportforincreasingwindcapacityfromallmajorparties.At
thepolicylevel,Spainhasalsoemployedafeed-intariffintroducedin1994to
encouragethegrowthofthedomesticwindmarket.Thesubsequentexpansioninthe
markethasbeenattributedtotheconsistentapplicationofthispolicyandtothehighlevel
ofincentivethatwasprovided(Spainhasthesecondhighestleveloffeed-intariffinEurope,
aftertheNetherlands)(Bolonetal 2007,Lewis2007a,Tokeetal 2008).Totalinstalled
capacityhasrisenfromlessthan1GWin1997toover15GWin2007,givingSpainthethird
largestinstalledcapacityintheworld(AEE2008,EWEA2009a).
AkeydifferencebetweentheapproachtakenbyGermanyandDenmarktodeveloplocal
windindustriesandthatofSpainhasbeentheuseoflocalcontentrequirements.Thesehave
beenappliedbySpanishregionalgovernmentsandessentiallyrequirelocalassemblyand
manufactureofturbinesbeforewindfarmdevelopmentconcessionsaregranted.Theresult
hasbeenthegrowthofSpanishcompanieslikeGamesaaswellasjobcreationasa
consequenceofforeigncompaniessettingupmanufacturingfacilitieslocally(Lewis2007a,
LewisandWiser2005,CentreforSustainableEnergy2005,UN2008).Inadditiontolocal
contentrequirements,Spainhasalsoaidedthedevelopmentofitslocalwindindustry
throughtheprovisionofaproductiontaxcreditthatisonlygrantedonturbinesmeeting
localcontentrequirements(LewisandWiser2005).
Spainwasabletobuildonitsexistingmanufacturingbasetodevelopitswindpower
industry.Ahistoryofautomobileandaircraftmanufactureprovidedasuitableskillsbasefor
theindustry;indeed,Gamesanowoneoftheworldslargestturbinemanufacturing
companieswasoriginallyanaircraftmanufacturingcompanythatdiversifiedintowind
(Bolonetal 2007).

LessonsfordevelopinganoffshorewindindustryintheUK
DrawingontheexperiencesofDenmark,GermanyandSpainindevelopingtheirwind
industries,threekeymessagesstandout:
Asizeableandstabledomesticmarkethasbeenessentialineachcasetodeveloping
localindustry
High-levelpoliticalsupportfordevelopingdomesticwindpowerwasnotsufficient
additionalpolicyandfinancialsupportwasnecessarytodeveloptheindustry.
Anexistingskillsbaseallowednewindustrytosetup.
Domesticmarket
TheoverridingmessagefromthesuccessesofDenmark,GermanyandSpainindeveloping
theirwindindustriesisthatastableandsizeabledomesticmarketisvital.Inallthree
countries,localmanufacturersbeganbysupplyingthedomesticmarketbeforelookingfor
exportopportunities.Numerousreportsonthistopicreiteratetheimportantrolethe
domesticmarketshaveplayedinthedevelopmentofwindpowerindustries:
Astablehomemarketsignalstobothlocalmanufacturersandto
foreignfirmsthattheyhavethelong-termplanninghorizonnecessary
toallowthemtoreasonablyinvestinthemarket.Companiesfacing
unstableorsmallmarkets,ontheotherhand,willbelesswillingto
25 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

spendmoneyonR&D,productdevelopment,andlocalmanufacturing
facilities. (LewisandWiser2005:11)
Themanufacturersurveyunderlinestheimportanceofastable
domesticmarketasthebasisforsuccessinthecontinuallygrowing
internationalmarket. (GermanWindEnergyAssociation2008)
Inallthreeofthesecountriesastrongpoliticalcommitmenttoincreasingwindcapacitywas
combinedwithconsistentapplicationofpolicymechanismsthatprovidedlong-termstability,
guaranteedreturnsandalow-riskinvestmentenvironment.Thiscombinationhasproved
successfulinattractinginvestors.
MostcommentatorsagreethattheUKhashigh-levelpoliticalsupportforincreasingthe
UKsrenewableelectricitysupply,demonstratedmostrecentlybythepassingoftheClimate
ChangeAct.SomealsopraisedtheCrownEstatescommitmentandproactiveattitude
towardsRoundThree.Thenexttaskwillbetotranslatethisambitionintoacrediblepolicy
frameworkthatwillgivebusinessestheconfidencetoinvestinoffshorewind.
Industrialactivism
Althougheachcountryhadhigh-levelpoliticalsupportforwindpower,thisinitselfwasnot
enoughtocatalysethedevelopmentofalocalwindindustry.Allthreeoftheexampleshere
enjoyedcross-partypoliticalsupportforincreasingwindcapacity(whichisimportant
becauseitgivesassurancetopotentialinvestorsthatpolicyinthisareawillnotchangeeven
ifthereisachangeofgovernment)andallthreehadhigh-leveltargetsforrenewable
electricityproduction.However,itisclearthatthepolicyframeworksthatsupportedthe
developmentofthemarketandencouragedalocalindustrywereanimportantpartofthe
successstory.Eachgovernmenttookastrategicdecisiontopursuegrowthinthewindsector
andestablishedapolicyframeworktoboostthisindustry.TheGermanGovernment,for
example,iscommittedtodevelopingecologicalindustrialpolicytotakeadvantageofthe
jobopportunitiesandenvironmentalbenefitsbroughtaboutbygreenindustriesandthis
includesaneedtostrengthenstrategicindustriesofthefutureandmakeourindustryfitfor
themarketsofthefuture(FederalMinistryfortheEnvironment,NatureConservationand
NuclearSafety2006:21).
Avarietyofpolicymechanismshavebeenusedtosupportthewindindustry,includinglocal
contentrequirements,financialandtaxincentives,favourablecustomsduties,exportcredit
assistance,qualitycertificationandR&D(LewisandWiser2005).Ofcourse,theindirect
supportfromthefeed-intariffwasimportant,too.
ThisexperienceimpliesthattheUKwillneedtodevelopasuiteofpoliciesoverandabove
theRenewablesObligationtosupportthedevelopmentoftheoffshorewindindustryifitis
tocreateUK-basedjobsinthissector.
Skills
Eachofthecountriesstudiedherehadanexistingskillsbasethatturbineandcomponent
manufacturerscoulddrawon.Germanyinparticulariswellknownforitsmanufacturing
capacity.
ThelessonfortheUKhereistoidentifywhereexistingskillsmightbetransferredtothe
windindustry.Theoffshoreoilandgasindustryisoneareathatwarrantsattentioninthis
regard.Therearealsoopportunitiesinfinancialandlegalservicesandtheremaybescopeto
useskillsfromtheautomobileandaerospacemanufacturingsectors.
Thenextthreesectionsofthisreporttakethesethreelessonsonthemarket,industrial
activismandskillsandapplythemtotheUKcontexttoconsiderhowtheoffshorewind
sectorintheUKcanbesuccessfullydeveloped.
26 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

3.Securingthedomesticmarket
AstheexperiencesofGermany,DenmarkandSpainshow,thedomesticmarkethasavital
roletoplayindeliveringnewgreen-collarjobs.Itisclearthatthesizeofthedomestic
marketwilldeterminethenumberofnewjobsthatarecreated.Marketcertaintyalsohasan
importantroletoplaybecauseinwardinvestmentwillonlyoccurwhencompanieshave
confidencethattheywillbeabletoselltheproductsandservices.
Confidenceinthefuturemarketwillbedriveninthefirstinstancebyhigh-levelpolitical
commitmenttoincreasingoffshorewindcapacityandthenbytheperceivedeffectivenessof
thepolicyframeworkdrawnuptodeliverthisvision.
ManyofthepeopleweinterviewedforthisresearchfeltthattheGovernmenthasconveyed
astrongcommitmenttodevelopingrenewablesintheUKforexampletheambitious
natureofthetargetssetoutintheClimateChangeActwerefelttodemonstrateagood
levelofambition,aswerestatementsaboutcreatinggreenjobs.Butmanyagreedthatthere
isstillagapwhenitcomestomoredetailedpolicymeasuresonhowthetargetswillbemet.
Inparticular,foroneinterviewee,muchmoredetailaboutthestrategyformeetingthe2020
targetswasneededbeforeinvestmentdecisionscouldbemade.
Thereisstillalargeamountofuncertaintyaboutwhetheritwillbepossibletodeliveronthe
Governmentsrenewableenergyaspirationsinpracticeandthisisproblematicforindustry
thereisalargedifferencebetweentheaspirationofachieving33GWby2020throughthe
RoundThreeprocessandthe14GWprojectionintheGovernmentsRenewableEnergy
Strategy.Governmentneedstoclarifyacredible,yetstretchingtargetforoffshorewind
capacity.
Beyondhigh-leveltargets,thereareanumberoffactorsthatcontributefurtherto
uncertaintyaboutdelivery:infrastructureinvestmentrequirements,theplanningsystemand
thesupplychain.Thisuncertaintyisactingasabarriertoinvestment.Theeconomicsupport
mechanismandperceptionsofitseffectivenessarealsokeytodeliveringthemarket.
ThissectionlooksatthemainfactorsthatarelikelytoaffecttheUKmarket.Webeginby
discussingsomeofthefactorsthataffectconfidenceinthemarket:theGovernments
economicsupportmechanismandbarrierstodeliverythatarecausingmarketuncertainty.
Wethenconsiderwhetherthesizeofthemarketwillbesufficienttoattractnewinvestment.

Economicsupportmechanism
ThemainpolicytoolfordeliveringrenewableelectricityintheUKistheRenewables
Obligation(RO).Thisrequireselectricitysupplierstoobtainanincreasingproportionoftheir
electricityfromrenewablesourceseachyear(6.7percentin200607).Generatorsof
renewableelectricityareawardedaRenewablesObligationCertificate(ROC)foreach
megawatthour(MWh)ofelectricitygenerated.Thesearethenpassedontoelectricity
suppliersatthepointofsale.ROCsaretradableandsuppliersmustpresentasufficient
numberofROCstotheregulator,Ofgem,tomeettheirrequirementseachyear.Ifsuppliers
arenotabletomeettheirobligation,theymustpayabuyoutprice,whichisthenreturned
toallsuppliersaccordingtothelevelofROCstheyhaveprovided.Thebuyoutpriceisset
eachyearbyOfgemandisadjustedtoreflectchangesintheRetailPricesIndex(Ofgem
2009).
TheROhascomeundercriticismbecauseithasnotbeenassuccessfulatincreasing
renewableenergyasfeed-intariffs,whichhavebeenusedinotherEuropeancountries,most
notablyDenmark,GermanyandSpain(evenwhendifferencesinplanningregimesaretaken
27 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

intoconsideration).Feed-intariffsprovideaguaranteedpaymentforeachkWhofelectricity
generatedandtheirsuccesshasbeenattributedtothreefactors:
Feed-intariffsprovidelong-termcertaintyforinvestors.Forexample,inGermany,the
feed-intariffisguaranteedforthefirst20yearsofageneratingplantslifetime.The
RO,whenitwasoriginallyintroduced,wassettoendin2027.
Feed-intariffsprovidemorecertainreturnsbecausethelevelofpaymentperkWhis
fixedinadvance.Bycontrast,thereturnsfromtheROareuncertainbecausethey
dependonthemarketpricesofROCs,whichismoredifficulttopredict.This
uncertaintyincreasesthecostofcapital.
Feed-intariffshavebeendifferentiatedaccordingtotypeoftechnologysothatmore
maturetechnologiesweregivenlesssupportthanthoseatearlierstagesofthe
developmentanddeploymentprocess.IntheUK,thesamenumberofROCshave
beenawardedregardlessofthetypeoftechnologyusedtogeneratetheelectricity,
withtheresultthatmaturetechnologiessuchaslandfillgashavereceivedan
unnecessarilyhighlevelofsubsidy,whilethosethatarestilldevelopinghavenot
receivedsufficientsupport.
(See,forexample,Sternetal 2006)
TheGovernmenthasnowreformedtheROinresponsetotwoofthesecriticisms.Inhislast
Pre-BudgetReport,theChancelloroftheExchequerannouncedthattheROwouldbe
extendedto2037(Darling2008).TheGovernmentalsohopestointroduceabanding
systemfortheROinApril2009(subjecttoitmeetingEuropeanstateaidrules).Underthis
system,maturetechnologiessuchaslandfillgaswillreceivefewerROCsperMWhof
electricitygenerated,whileemergingtechnologiessuchaswaveandtidalenergywill
receivemore.Undertheproposedsystem,onshorewindwillreceive1ROC/MWhwhile
offshorewindwillreceive1.5ROCs/MWh(HMGovernment2008a).
ThecriticismabouttheuncertaintyofreturnsundertheROremainsandasaresult,there
havebeencallsfortheGovernmenttoscraptheROandreplaceitwithafeed-intariff(see
forexample,Barkeretal 2008).However,thosewithintherenewableenergyindustryhave
opposedsucharadicalreformofpolicy,claimingthatthetimerequiredtodesignand
legislateforanewschemewouldseriouslyjeopardisethe2020target.Industry
representativesinterviewedforthisprojectwereclearthatthepolicyuncertainty(thatthe
ROmaybechangedforafeed-intariffatsomepointinthefuture)wasagreaterhindrance
toinvestmentthanthecurrentuncertaintyofreturnsundertheRO.Oneinterviewee
explainedthatacross-partyagreementnottochangetheeconomicsupportmechanismfor
thenextdecadeorsowouldbehelpfulinbringingforwardinvestmentdecisions.
Basically,ifpressed,wewouldsayitdoesntmatterwhatthe
regulatoryframeworkiswhetheritsfeed-intarifforROCsora
combinationaslongasitsstableandsojustdecidewhatitisandthen
getcross-partyagreement.Developer,interviewwithippr
Itappearsthataconsensusamongthemajorpoliticalpartiesisemerging.TheGovernments
responsetocallsforafeed-intariffhasbeentointroduceoneforsmall-scaleinstallations
(lessthan5MW)andtoreformtheRObyintroducingabandingsystemandextendingit
until2037(BERR2008,HMGovernment2008a,Darling2008)..Thisresponsesucceedsin
ensuringacontinuouspolicyframeworkforlarge-scaleoperators,whichisnecessaryfor
buildingconfidenceamonginvestors,whileatthesametimeprovidinganewincentivefor
smalleractors,suchashouseholdsandbusinesses.TheConservativePartyhasdemonstrated
acommitmenttocontinuingtheGovernmentspolicyinthisarea(ConservativeParty2009).
TheLiberalDemocrats,however,advocatereplacingtheROwithafeed-intariff(Liberal
DemocratParty2008).
28 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

Perhapsamoreimportantquestioniswhether1.5ROCsforeachkWhofenergyproduced
byoffshorewindwillbesufficienttomakeinvestmentinwindfarmseconomicallyviable.
Severalindustryrepresentativesinterviewedforthisprojectsuggestedthatitwasprobably
notenough.TheBritishWindEnergyAssociation(BWEA)iscarryingoutastudyonthis
question,whichshouldbepublishedlaterin2009.
Ontheeconomicside,itsnotthemechanism,itsmorethelevel
comparedtothecosts.Is1.5ROCsgoingtobeenough?Doesthe
multipleneedtoberaisedorcancostsbereducedtomakeitenough?
Industryspokesperson,interviewwithippr
AnimportantfeatureofGermanyssuccessindevelopingitswindcapacityisthatthefeed-in
tariffmechanismwasmodifiedovertimetoensureitwasdeliveringthedesiredoutcomes.
CommentatorshaverecommendedthattheUKGovernmenttakesasimilarapproachand
monitorsprogresstowardsthe2020renewablestargetannuallytoensurethattheROis
delivering(Boettcheretal 2008).
ipprrecommendsthatgovernmentshouldmonitorthedeploymentofrenewableenergy
capacityonanannualbasistodeterminewhetherthelevelsofbandsundertheROhave
beensetcorrectly.Ifdeploymentisnothappeningasfastasisnecessary,Government
shouldbepreparedtoaltertheROCallocations.Similarly,Governmentshouldalsobe
preparedtomoveallocationsdownwardsastechnologiesmature.

Removingbarrierstodeliveringoffshorecapacity
DespitetheambitiousscaleofRoundThreeofoffshorelicensing,andGovernment
statementssupportingthedevelopmentofoffshorewind,thereisstillagreatdealof
uncertaintyabouthowmuchcapacitywillbedeliveredby2020.Thisisbecausetherearestill
anumberofsignificantbarrierstodeliverythatcoulddisruptoffshoredevelopmentprojects
orevenpreventthemfromhappening.Themostimportantoftheseareissuestodowiththe
grid,planningandthesupplychain.
Thegrid
Theuncertaintyaroundwhetherornotthegridwillbeupgradedintimetosupportnew
generatingcapacityisregardedasthebiggestthreattoachievingthe2020renewables
targetbymanyoftheindustryexpertsinterviewedforthisreport.
Themainbarrier[tomeetingthe2020renewablestarget]willbegrid
capacityandgridconnection. Developer,interviewwithippr
Significantworkonthegridwillbenecessarytoconnectthenewcapacitythatisexpected
tocomeonlineby2020.Thisincludesprovidingconnectionsfromoffshoresitestoonshore,
layingnewcablestoconnecttotheonshoregrid(whichismanymilesinlandinsomecases)
andexpandingthecarryingcapacityofthegridtodealwithincreasedloadsinsomeareas.
Therearealsoquestionsabouthowthegridcanbereinforcedtodealwiththeintermittency
ofwindpower,forexamplethroughinterconnectionwithotherEuropeancountries.
Numerousreportshavearguedfortheneedtofocusonimprovingthegridandproviding
connectionsasamatterofurgency(forexample,RAB2008,CarbonTrust2008).
Alackofupfrontinvestmentinoffshoreconnectionscouldmakeitlesslikelythatoffshore
windcapacitywillbedeliveredbecauseitincreasesriskandmayincreasethecostofcapital.
Thiscouldinturndiscourageinvestment.
Lackofgridcapacityisamajorissuebecauseifwecantgetagrid
connection,wecantbuildanythingnobodywillgiveusthemoneyto
29 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

buildanoffshorewindfarmunlesswecanguaranteeweregoingto
getrevenuefromsellingelectricitysoIwouldsaythatsthe major
issue. Developer,interviewwithippr
DECCandOfgemarecurrentlyintheprocessofdevelopinganewregulatoryregimefor
offshoreelectricitytransmissionandforlicensingoffshoretransmissionconnectionsaspart
oftheoffshoretransmissionproject.Afinalconsultationisscheduledforearly2009andthe
newregimeisplannedtogoliveinmid-2010(BERR2009).
Thecurrentregulatoryregimehascausedsomedifficultiestodate,particularlyaround
NationalGridstimetablingofprovidingconnections(whichhasnottakenaccountofwhat
stageintheplanningprocessprojectswereat)andbecauseofalackofcoordination
betweenOfgemandNationalGrid.In2008,OfgemandBERRjointlypublishedthe
TransmissionAccessReview,whichcontainsmeasurestoovercomesomeofthese
timetablingissues(OfgemandBERR2008).
Thelackofastrategicplanforthegridhasalsocausedconcern.Thegridhasevolvedover
timeinapiecemealfashionwithindividualprojectsbeingconnectedonebyone.
Commentatorshavearguedthatfutureinvestmentsshouldbemadeinamorestructured
andlogicalway(Boettcheretal 2008,RAB2008).Thisissuewasalsocoveredinthe
TransmissionAccessReviewandtheElectricityNetworksStrategyGroup,whichischaired
jointlybyDECCandOfgem,iscurrentlydevelopingastrategicvisionofwherenew
transmissionslineswillberequiredtomeetthe2020targets.Thisisexpectedtobe
publishedinspring2009.
Thereisariskthattherecessionmaymakefinancingthenewoffshoreconnections
problematic.Governmentshouldmonitorprogresstowardsprovidingoffshoregrid
connectionstoensureprogressisoccurringatasufficientratetomeetthetimetablesetout
forRoundThree.Governmentcouldoffertounderwriteloansorworkwithfinancial
institutionstoencouragelendingtooffshoregridcompaniestoensuretheyareabletoraise
sufficientfinancetoallowtheworktotakeplace.
Planning
Theplanningapprovalprocesshaslongbeenapointofconcernforfuturewindproject
developers.Thelongtimetakentoreceiveplanningconsentandhighlevelsoflocal
oppositiontowindfarmshavebeenproblemsfortheonshorewindsector,andthis
experiencehasweakenedconfidenceamongpotentialinvestorsthattheUKwillbeableto
deliveronitsaspirationtohave33GWofoperationaloffshorewindinstalledby2020.
Somanyintheindustryarecynicalabouttheoffshoremarket,
becauseonshorewindshouldbeeasiertodeliverthanoffshoreandyet
theUKhasstruggledtogetonshoreMWsintheground.Somany
criticsofthewindindustrysay,Ifyoucantdoitonshorewhat
confidenceareyougoingtohavethatitsgoingtobeanydifferentor
easiertodooffshore? Turbinemanufacturer,interviewwithippr
ThisproblemhasbeenacknowledgedbytheGovernmentandthePlanningActsetsout
provisiontoestablishanInfrastructurePlanningCommission(IPC)andNationalpolicy
statements.TheIPCwillbeaNon-DepartmentalPublicBodyanditsrolewillbeto
determineplanningapplicationfornationallysignificantinfrastructureprojects.Foroffshore
wind,thiswillincludeoffshorewindfarmsinEnglandandWalesthatarelargerthan100MW
(HMGovernment2008b).TheIPCsdecisionswillbeguidedbyaframeworkofNational
PolicyStatements(NPSs),whichwillbedevisedbyGovernmentandwillsetouttheneedfor
certaintypesofinfrastructure,suchasenergy,ports,airportsandwatersupply.
30 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

ThenewIPCprocessisexpectedtoreducetheplanningandconsentingprocessforoffshore
windtoaroundthreeyears.Industryexpertsinterviewedforthisreportwerehopefulthat
theprocesswouldbespeduptosomeextent.However,theIPCisstillanunknownquantity
andthetimetableforitsintroductionistight.TheIPCandNPSsarescheduledtobeinplace
bymid-2010andtheplanningandconsentingprocessforRoundThreeistimetabledto
beginimmediatelysothatconstructioncanbeginin2014(seeAnnexIIforamoredetailed
timetable).ClearlyiftherearedelaysinestablishingtheIPC,inagreeingtheNPSs(which
mustbelaidbeforeParliament)orifthenewprocessofobtainingplanningconsentisnotas
fastasanticipated,thenthedeliveryofoffshorecapacityfor2020willbecomelesslikely.
OneintervieweesuggestedthatinvestmentinstaffingandresourcingtheIPCshouldbeat
thetopofthelistwhenconsideringhowtoensurethedeliveryofoffshorewindcapacity.
Thefirstthing[thatgovernmentshouldinvestin]ismakingsurethat
theInfrastructurePlanningCommissionisproperlysetupand
resourcedandstaffedsothatisntakindofbureaucraticbottleneck.
Thatsthemostimportantthing. Developer,interviewwithippr
Obviouslyoneofthemostsignificantconstraintsisplanningand
consentingprocessandtheIPCandtheMMO[MarineManagement
Organisation]willpotentiallyplayareallyvitalroleinmitigating
consentingriskwhatimpactthenewconsentingregimewillhaveon
thesuccessrateandtimescaleforgainingconsentsonoffshoreprojects
Idontknowitsanunknownprocessandthisscaleofdevelopment
isnewtotheindustry. Consultantonoffshorewind,interviewwithippr
ItisclearthatGovernmentmustnowmonitortheprogressoftheintroductionoftheIPCthe
NPSsandthespeedwithwhichapplicationsareapprovedunderthenewregimeandensure
thatthetimetablefordeliveringoffshorewindcapacityfor2020iskeptontrack.This
includesensuringtheIPChassufficientresourcestooperateeffectively.
Supplychain
Manycommentatorsrecogniseconstraintsintheoffshorewindsupplychainasabarrierto
meetingtheUK2020targets.Recentstudiesonthistopichaveidentifiedthesupplyof
offshorewindturbines,installationvessels,cablesandoffshoresubstationsasbeingkey
areasofconstraint(CarbonTrust2008,DouglasWestwood2008,Boettcheretal 2008,
BWEA2007).TheCarbonTrustidentifiesfoundationsasbeinganadditionalareaamongthe
keycomponentsthatispronetoshortages(CarbonTrust2008).
AreportbyDouglasWestwood(2008)notesthatglobally,therearecurrentlyonlythree
maincompaniessupplyingoffshorewindturbines.Otheronshorewindturbine
manufacturersareintheprocessofdevelopingoffshoreturbineswhileothersarenotyet
convincedthatthefutureglobalmarketforoffshorewindiscertainenoughtobegin
producingturbines.Increasingcertaintyinthefutureoftheoffshoremarket(asdiscussed
above)iskeytoattractingnewplayersintotheoffshorewindturbinemarketandto
reducingleadtimesforturbines.
Someintervieweesdidrecognisesupply-chaindifficultiesasanissueforoffshorewind.
However,mostwereconfidentthatsupplierswerescalinguptheiractivitiesandthatthe
shortagesthathadbeenexperiencedtodatewouldnotexistinthefuture.
Oneofthebiggestissueswevehadintheindustryiswiththecapacity
forsomekeycomponentsupplierstodeliverthevolumewehave
demanded.Whentheonshorewindmarketisboomingwecantgetall
31 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

thecomponentsweneedfastenoughfromthesupplierstobeableto
runatfullcapacityinsomeofourfactories.Wehaveinvestedalotof
timeandmoneytoimprovethisoverrecentyears. Turbine
manufacturer,interviewwithippr
Idontthinkweseethesupplychain(vessels,cables,transformers,
turbines)assuchbeingamajorcriticalissueondeliveryofRound
Threeintheschemeofthingsitmightdelayaprojectayearorso
therealshowstopperisgrid. Developer,interviewwithippr
ipprbelievesthatGovernmentshouldinitiateamappingexercisetoidentifyUK-based
companieswiththepotentialtodiversifyintotheoffshorewindsupplychainandshould
makethisinformationavailabletoturbinemanufacturerstoencouragethemtosetupinthe
UK.
Governmentshouldalsoprovidesupporttoindustriesthataremostlikelytocause
bottlenecksinthesupplychain,includingfoundations,offshoresubstations,cables,
installationvesselsandturbinemanufacturers.Section6describesinmoredetailtheform
thissupportcouldtake.
Althoughsupply-chainissuesarenotconsideredtobeasbigaproblemasfixingthegrid,
thecreditcrunchaddsanotherdimensiontotheproblem.Supplierslookingtoincreasetheir
capacityinordertomeetgreaterdemandinthefuturemayfacedifficultiesinsecuring
financetoexpand.Againuncertaintiesinthesizeofthefuturemarketcompoundthe
problem;withoutaminimumnumberoflong-termcontracts,itcanbedifficultforsome
playersinthesupplychaintoraisethefinanceneededtoincreasecapacity.
Eveniftheeconomicsofprojectscanbemadetostackup,thecurrent
crisisinthefinancialmarketsmeanssecuringtheamountsofcapital
requiredfortheselargedevelopmentsischallenging,evenforlarge
companieswithstrongbalancesheets. Industryspokesperson,
interviewwithippr
Wherepossible,governmentshouldconsiderprovidingguaranteesforloanstosupply-chain
companieslookingtoexpandtheircapacityintheUKbutwhoarestrugglingtoraisefinance
becauseoftherecession.Governmentshouldalsoworkwithfinancialinstitutionsto
encouragelendinginthissector.

Maximisingmarketsize
AstheexamplesofDenmark,GermanyandSpainshow,thesizeofthelocalmarketisvery
importantwhenitcomestoinvestmentdecisionsfrommanufacturers.Companiesneedto
knowthatthelocalmarketfortheirproductswillbesufficientlylargeandpredictableto
outweightheset-upcosts.
WhenitcomestotheUK,althoughtheambitionsforoffshorewindareverystrong,there
wasstilldoubtamongmanyoftheintervieweesthatwespoketothattheUKmarketalone
wouldbesufficienttoattractnewmanufacturingcapacitytosetuplocally.Forexample,the
minimumsizethatsomeintervieweessaidtheywouldneedinordertowarrantsettingupa
factoryrangedfrom1GWto6GWperyearforfiveto10years.ThetotalUKmarketwould
needtobemuchgreaterthanthis(toaccountforthefactthatthetotalmarketsizeneeds
tobedividedbyeachcompanysmarketshare)andsoonthisbasistheUKmarketalone
doesnotlooklikeitwillbesufficienttoattractmanufacturing.
OneintervieweesuggestedthatincreasingtheUKsonshoremarketaswellastheoffshore
marketwouldhelptoovercomethisproblembecausethetotaldomesticwindmarketwould
32 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

begreater(andbecauseonshorewindislesscostlythanoffshore).However,other
intervieweesdisagreedwiththisbecausethecomponentpartsforonshoreandoffshorewind
aredifferentandthereforemaynotbeabletobesuppliedbythesamefactoryandalso
becausetheydonothaveconfidenceintheUKsonshoremarketgiventheslowprogress
thathasbeenmadetodatecomparedtotheonshoremarketinothercountries.
AlthoughtheUKoffshorewindmarketmaynotbebigenoughinitselftoattractnew
investment,theEuropeanmarketasawholeislikelytobebigenoughtogeneratenew
manufacturingcapacity.Forexample,Germanyalsohasplanstoincreaseitsoffshorewind
capacityinthemediumterm(EWEAreportsthatatotalof16GWisplannedintheUKand
Germanyby2015,ontopofexistingcapacityandprojectscurrentlyunderconstruction
[EWEA2009b]).Largecompanieswhoarealreadyoperatingataninternationallevelare
morelikelytomakeinvestmentdecisionsbasedonprojectionsofinternationalmarketsize
ratherthannationalmarketsandsothegrowthoftheEuropeanmarketisperhapsmore
relevantthanconsideringtheUKalone(althoughitisclearthatimprovingcertaintyinthe
UKmarketthroughthemeasuresoutlinedabovewillmakeanimportantcontributionto
perceptionsoftheEuropeanmarketforoffshorewind).
Thequestionis,then,whichotherfactorswouldtipthebalancewhenitcomestodeciding
whichcountrywillbethebaseforsupplyaregionalmarket?WeargueinSection4below
thatthelocalindustrialactivismandthelocalskillsbasearekeyfeaturesforattracting
investment.
33 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

4.Industrialactivism
Section1describedwhyoffshorewindmightbeastrategicallyimportantsectorinfuturefor
theUKanditisclearthatitsexpansionintheUKwillcreatejobs.Estimationsofthenumber
ofjobsvaryquitesignificantlyacrossdifferentmodellingscenariosbuteventhemost
pessimisticforecastsofjobcreationintheUKshowasignificantnumberofjobsbeing
createdby2020from23,000inwind,onshoreandoffshorecombined(Boettcheretal
2008)to40,000inoffshorewindalone(CarbonTrust2008).
Thekeyuncertaintyiswhetheritwillbepossibletoachievethejobforecastsatthemore
optimisticendofthespectrumfrom57,000jobsinwind,onshoreandoffshorecombined
(Boettcheretal 2008)to70,000jobsinoffshorewindalone(CarbonTrust2008).These
scenariosdependinpartontheeventualsizeoftheoffshoremarket,buttheyalsodepend
ontowhatextentjobsarebasedintheUKasopposedtootherEuropeancountries.
Giventhestrategicreasonsfordevelopingtheoffshorewindsectorandthatmeetingour
2020targetsthroughanexpansionofoffshorewindcapacitywillcreatenewjobs,itwould
seemsensiblefortheGovernmenttoaimtomaximisethepotentialeconomicbenefitsarising
fromactivityinthisarea.
Thisraisestwoimportantquestionsabouthowtomaximisebenefits.
First,howcancompaniesacrosstheoffshorewindsupplychainbeencouragedto
basetheiroperationsintheUKratherthanservetheUKmarketfromcentresinother
Europeancountries?
Second,whatisthebestwaytoensurethattheUKworkforceiswellplacedto
competeforjobsinthesector?
Itisalsoimportanttobearinmindnotjustthenumberofjobsbeingcreated,butalso
whetherthemoreeconomicallydisadvantagedregionsofthecountrywillstandtobenefit,
whetherpeoplecurrentlyworkingindecliningindustrieswillbeabletoaccessthejobsandif
thejobswillprovidedecent-quality,career-trackopportunities.
ThissuggeststhatamorestrategicapproachtomaximisingoffshorewindjobsintheUKand
ensuringtheUKworkforceiswellplacedtotakeadvantageofthesejobswillbeneeded.
ThishasalreadybeenrecognisedbytheGovernmentinhisspeechtotherecentjobs
summit,LordMandelsonsaid:
Wewillneedasmart,strategicapproachfromgovernmentthatmakes
surethatthebusinessenvironmentisabsolutelyfinetunedtothat
outcome[increasingthelowcarbonindustrysector]Thatmeans
governmentthatensuresthatwearedevelopingtherightskillsbase
andinvestingstrategicallyintherightresearchcommercialisationand
processinnovation. (Mandelson2009)
Inthissectionwearguethatindustrialactivismwillbenecessarytoaddressthefirst
concernofhowtoencourageoffshorewindsupply-chaincompaniestobasetheiroperations
intheUK,bothbyencouragingexistingfirmstodiversifyintothisnewsectorandby
attractinginwardinvestmentfromforeigncompanies.Thenextsectionwillfocusonwaysto
developtherightskillsbase.

Whatisindustrialactivism?
TheexperiencesofDenmark,GermanyandSpainshowthatalthoughalargeandpredictable
domesticmarketisaprerequisitefordevelopingalocalwindindustry,itisnotasufficient
condition.Allofthesecountriesemployedadditionalsupportmechanismstosupportthe
34 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

growthofanewsector,bothdirectly(forexample,throughgrantsandlocalcontent
requirements)andindirectly(throughfeed-intariffs).Byindustrialactivismwearereferring
tothevariouswaysinwhichGovernmentcanhelptoshapetheeconomytoreinforceour
strengths.Thisincludesensuringsufficientdirectsupportmechanismsareavailableto
developingindustriesaswellasremovingbarriersforthoseindustriesthatareidentifiedas
beingstrategicallysignificanttotheUKeconomy.
Theneedforindustrialactivismforoffshorewind
UKgovernmentshavebeenkeentoavoidpickingwinnersbychoosingparticular
technologiesorsectorstochampion,arguingthatthemarketshoulddecidewhetherfirms
succeedorfail.Asaresultofthisoutlook,incentivesaimedatencouragingrenewable
electricitygenerationhavebeenappliedatanequalrateacrossalltechnologies(underthe
RO).However,thisapproachhascauseddifficultiesbecausenotallrenewableelectricity
technologiesareatthesamelevelofmaturity.Theresulthasbeenthatmaturetechnologies,
likelandfillgas,havebeenover-subsidised,whileothers,likemarinerenewablesandoffshore
wind,havebeenunder-subsidisedbecausetheyarenotyetfullymatureandhencehave
highercosts.TheGovernmentisnowadvocatinganapproachofvaryingthelevelofsupport
accordingtothematurityofthetechnology.
Thesameapproachshouldbeappliedwhenconsideringwidermechanismsforincentivising
renewableenergytechnologies.Governmentshouldseektoprovidesupportfornew
technologieswhenindustriesarestillintheirinfancy.Thissupportshouldthenbephased
outovertimeastheindustrymaturesuntilitisabletostandonitsowntwofeetand
competeinthemarketwithoutbeingproppedupbyGovernment.
Inordertoextractthemaximumeconomicbenefitsfromexpansionofoffshorewind,the
Governmentwillneedtoensurethatcompaniesacrosstheoffshorewindsupplychainare
abletobenefitfromadditionalsupport,whiletheindustryisstillinitsinfancy.Thissupport
shouldbephasedoutovertime,astheindustrymatures.Governmentshouldtargetthis
supportonareasofthesupplychainwheretheUKhasacompetitiveadvantageandon
areasthatmayposebarrierstodelivery.
Afurtherandmorefundamentalreasonforindustrialactivismforoffshorewindisthat
othercountries,particularlyGermany,havealreadyputsupportpackagesforoffshorewind
inplace(thisisdescribedinmoredetailbelow)andiftheUKwantstocompetefor
economicbenefitsandjobs,thenGovernmentwillneedtoensurethattheinvestment
opportunitiesareatleastasattractiveasthoseinothercountries.

Measurestosupportoffshorewind
HerewesetoutsomeofthewaysinwhichtheUKcouldencourageoffshorewind
companiestolocateintheUKandtopersuadeexistingUKcompaniestodiversifyinto
offshorewind.Themethodsoutlinedarebasedontheviewsoftheintervieweeswespoketo
andtheexperiencesofothercountriesindevelopinglocalwindindustries.
Financialandtaxincentives
Awholeraftoffinancialandtaxincentiveshavebeenusedbyothercountriestoencourage
localwindindustries.Theseinclude:
Providingloansorsubsidiestooffshorewindprojectsthatincorporatelocally-built
components
TaxcreditsorreductionsforlocalinvestmentsinmanufacturingorR&Dorinlocal
labourcosts(forexample,Canadaprovidesataxcreditonwagespaidinthewind
sector)
35 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

ReductionsinsalestaxorVATforturbinecomponentsandtechnology
Taxorfinancialincentivestoencouragejointventuresbetweenlocalcompaniesand
foreigncompanies
R&Dsubsidies.
(LewisandWiser2008)
Perhapsunsurprisingly,therewasclearsupportfromintervieweesfortheideaofproviding
financialsupportforcapitalcostsforwindenergycompaniessettingupfacilitiesintheUK,
intheformofeithergrantsorloans.Thisapproachhasalsobeenadvocatedbyother
commentators(forexample,seeDouglasWestwood2008).Somecommentatorshave
recommendedthatthisassistanceshouldbefocusedonsmallerUKcompanies,whomight
otherwisehavedifficultyinbreakingintothemarket(ibid)whileotherssuggestfocusingon
targetingproblematicsectionsofthesupplychain,suchasfoundations(CarbonTrust2008).
Foranewsupply-chaincompanytryingtobreakintothesector,and
supplyturbinemanufacturers,itcouldbeusefulfor[theGovernment]
tohelpacompanyproducethefirstitem.SoifIwenttosomebodyand
saidIwantsomegears,theresquitealotoftoolingcoststomakethis
newgearandonthatbasisitwouldbequiteusefulforgovernmentto
helpcompanyxupskillsothatitcangetinvolvedinthenewmarket
andtakesomeoftheriskoutofthesegment.Turbinemanufacturer,
interviewwithippr
Severalintervieweesacknowledgedthattherearealreadymanycapitalgrantsandsubsidies
availableforoffshorewindintheUK.TheseincludeamongothersGrantsforBusiness
InvestmentfromRDAs,andtheOffshoreWindCapitalGrantsprogramme(formoredetail,
seeAnnexIII).However,theyfeltthatalthoughthetotalsumofmoneyavailablewasquite
large,itwasspreadtoothinlyandthroughtoomanydifferentchannelstobeusefulin
attractinglargecompaniestodiversifyorinvestintheUK.Therewasagreementthat
consolidatingsomeoftheseschemesintoamoretargetedpackage,whichcouldpotentially
providelargersumsofmoneyandbemoreeasilymarketed,wouldhelptoattract
investment.
GovernmentsupportforR&Dinoffshorewindisalsoconsideredtobevitalbymany
commentators.Forexample,theCarbonTrusthasrecommendedthatgovernmentshould
investbetween0.1bnand0.6bninaresearch,developmentanddeliveryprogramme
(CarbonTrust2008).
Likecapitalgrants,spendingonR&Dalsoneedstobeproperlytargetedindeed,some
commentatorshaveclaimedthatthetargetingcanbemoreimportantthanthetotalsum
spentindevelopinglocalindustries(LewisandWiser2005).Thissentimentwassharedby
intervieweesforthisreport,whocommentedthattherearetoomanydifferentUKR&D
supportschemesandthatpolicyinthisareaneedstobeclarified(seeAnnexIIIfora
descriptionofdifferentfundingstreamsavailablecurrently).
R&Dandinnovationpolicyisgoingtobequiteinterestingtheresa
plethoraofsupportbodies,forinstancetheTechnologyStrategyBoard,
EnergyTechnologiesInstitute,NaREC[NewandRenewableEnergy
Centre],variousinstitutesinuniversities,SupergenundertheESRC
[EconomicandSocialResearchCouncil]weneedtogetsomeclarity
intoallofthat.WhattheCarbonTrustisdoingaroundthat[the
OffshoreWindTechnologyAccelerator]isquiteinterestingweneed
moreinitiativeslikethat. Industryspokesperson,interviewwithippr
36 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

Providingfacilitiesandinfrastructure
Aswellasfiscalincentives,GovernmentandtheRegionalDevelopmentAgenciescanalso
maketheUKmoreattractiveforinvestmentbyensuringthattherightfacilitiesand
infrastructureareinplacetoallowcompaniestooperatesuccessfullyintheUK.Asfarasthe
UKoffshorewindindustryisconcerned,thereareanumberofareaswhereinvestmentin
facilitiesandinfrastructurecouldhaveaveryimportantroletoplay.Twoexamplesaretesting
facilitiesandports.
SeveralintervieweespraisedtheNewandRenewableEnergyCentre(NaREC)setupinBlyth
bytheRDAOneNorthEast,whichprovidestestingfacilitiesforoffshorewindturbinesand
hasbeencreditedwithattractingClipperWindPowertosetupinthearea(seeBox1.1).
However,itwasalsonotedthattheUKstilldoesnothaveanyoffshoretestsitesand
intervieweesfeltthatthesewillbenecessaryfordevelopingnewoffshorewindturbinessince
turbinemanufacturersneedtobeabletodemonstratethattheirequipmentisreliablebefore
developerswillplaceorders.ipprrecommendsthatGovernmentshouldworkwiththeCrown
Estatetoidentifyapotentialnearshoretestsitelocation.
Asitewherepeoplecouldputupversionsofnewoffshorewind
turbinescouldbehelpful.Developer,interviewwithippr
PortsareanotherareawheretheUKisfelttobelackingcomparedwithsomeother
Europeancountries.ItiswidelyacknowledgedthatBritishportcapacityisnotsufficientfor
offshorewindinstallationandO&Mactivities.Portsneedtobedeepenoughtoallowaccess
toinstallationandO&Mvessels,tohavesufficientspaceandbestrongenoughtosupport
turbinesandturbinecomponents(CarbonTrust2008,DouglasWestwood2008,BWEA
2007).ThereareportselsewhereinEuropethathavetheseattributes(BWEA2007)and
intervieweesdescribedhowContinentalportsarealreadyusedfortheinstallationofoffshore
windfarmsinUKwaters.DevelopingtheUKsportcapacitywillbeanimportantstepfor
attractingcompaniestolocateintheUK.Commentatorshavesuggestedthatamixtureof
publicandprivatefundingshouldbeusedtoachievethis,usingasimilarmodeltothe
approachtakenbytheEastofEnglandDevelopmentAgencyfortheupgradestotheportat
GreatYarmouth(DouglasWestwood2008,CarbonTrust2008).Governmentshouldwork
withsuccessfulRoundThreebidderstoidentifyports.
Aswellasports,Governmentneedstolearnfrominvestorswhatotherinfrastructureneeds
theymayhaveandshouldworkwithRDAstodeliverthis.Forexample,newroadandrail
linksmayberequired.
Severalcommentatorshaverecommendedthatfinancialincentivesandpublicinvestmentin
facilitiesandinfrastructureshouldbetargetedatthesamelocationinordertopromotea
growthcluster(CarbonTrust2008,DouglasWestwood2008,Boettcheretal 2008).An
exampleofwherethisapproachhasbeentakenisintheGermanportofBremerhaven,
wherepublicinvestmentininfrastructure(suchasimprovingportfacilities)hashelpedto
leverageprivateinvestment(seeBox4.1).
AnotherlessonfromGermanyandDenmarkandSpainistheneedto
focuswhereyouredoingtheworkclusteringtheactivitiesisvery
important.IfyougotoDenmark,theindustrysallclusteredinJutland,
theresacoupleofzonesinNorthernGermanyandsimilarinSpain.We
needtogettheGovernmenttodecidetofocusandactuallychoosean
areatofocusonandstartputtinginincentivesandgrantstomake
someplaceintheUKamanufacturingfocus.Industryspokesperson,
interviewwithippr
37 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK
Ofcourse,thisclusteringapproachismore
straightforwardinGermany,wherefederal
governmentshavemorepowerthanregional
governmentinBritainhas.Toachievea
clusterintheUKwillrequiregreater
interventionfromcentralgovernment.
TheCentrefortheProductionand
InstallationofOffshoreWindTurbinesin
Bremerhaven,NorthernGermany,wascited
bymanyintervieweesasanexampleofbest
practiceindevelopinganoffshorewind
cluster.
TheCentrewasestablishedinLuneort,an
industrialestateinBremerhaven,bythe
BremerhavenEconomicDevelopment
Company(BISBremerhaven).BIS
Bremerhavenisapublicorganisationfunded
jointlybythemunicipalityofBremerhaven
andtheFederalStateofBremen.BIS
BremerhavenandtheStateofBremenhave
investedatotalof13millioninthe
developmentofthesiteandthishas
catalysedsignificantadditionalinvestment
fromprivatesectorfirmswhohavelocatedin
thearea.
Short-termguarantees
Likemanyindustries,offshorewindmayface
difficultiesintheshortterminraisingfinance
toinvestinnewcapacityasaresultofthe
creditcrunch.Thiscouldresultindelaysto
thedeliveryprogrammetomeetthe2020
targets.Governmentcouldhelpovercome
thisdifficultybyofferingtounderwrite
borrowingforcompaniesacrossthesupply
chain.
Localcontentrequirements
Theuseoflocalcontentrequirementshas
helpedSpaintodevelopitslocalwind
industry(seeSection2above)andthis
approachhasbeentakenbyothercountries
too,includingChina,CanadaandBrazil
(LewisandWiser2005,UN2008).This
practicemeansthattheproportionof
componentsofawindturbinethatare
manufacturedlocallyistakeninto
considerationwhenawardingdevelopment
contractsforwindfarms.Forexample,in
China,concessionsfornewwindfarmsare
Box4.1:Thedevelopmentofan
offshorewindclusterinBremerhaven,
Germany
BISBremerhavenhassupportedthe
developmentoftheCentreinanumberof
ways:
Creatingalocalwindindustrynetwork,
whichcurrentlyhas140members
(WindEnergyAgencyBremerhaven)
Buildingaresearchinstituteforwind
energyattheUniversityofApplied
ScienceinBremerhaven
Offeringgrantsforinvestmentand
R&Dprojects(someinvestment
projectswereco-fundedbythe
FederalStateofGermanyandtheEU)
Providinginexpensive,high-quality
officepremises,workshopsand
laboratoriesinstart-upandtechnology
centres
Providingone-off,non-repayable
grantsof2,500tocompaniesthat
createanewapprenticeshiptraining
position.
BISBremerhavenhasalsoinvestedin
infrastructureforoffshorewindturbine
production,whichincludes:
Productionandassemblyareasfor
makingfoundations,towers,nacelles
androtorblades,aswellasforstorage
andfinalassembly
Trafficareaswiththeload-bearing
capacityanddimensionsforindustrial
trucksforoffshorecomponents
Ateststandforcompletenacelle
systems
Adeepwatercargohandlingterminal
withconnectiontoinlandwaterways.
TheAlphaVentustestsiteforoffshore
windturbinesislocatedneartothe
Luneortsiteand12turbinesandsixofthe
foundationsfortheAlphaVentustestfield
willbeproducedinBremerhaven.
Sources:WAB(2009),Grabs,Mathias
(2009),FKWind(2009),PowerCluster
(2009)BISBremerhaven(2009)
38 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

givenontheconditionthat70percentofthecontentismanufacturedlocally.Theresulthas
beenthatwindturbinemanufacturershavesetupinChinaeithermanufacturingfactoriesor
assemblysitesthatsourcelocally-producedcomponents(Lewis2007b).
Whilethisapproachdoesappeartohavebeensuccessful,particularlyinSpainandChina,the
downsideisthatitcanincreaseproductioncosts,whichthereforeincreasesthecoststo
developersand,ultimately,theelectricitypricepaidbyconsumers.Therearealsoquestions
aboutwhethertheuseoflocalcontentrequirementscontravenesWTOtraderulesandEU
StateAidrules.
ThereisaviewheldbysomestakeholdersthattheUKonlyreallystandsachanceof
developinganoffshorewindmanufacturingbaseifsomekindoflocalcontentrequirements
areintroduced.However,mostalsoagreethatthisisanunlikelyroutefortheUKtotake,as
itwouldgoagainstthepoliticalphilosophyofgovernmentandoppositionpartiesinfavour
offreetradeandwouldpotentiallybreakinternationaltraderules.
Ifgovernmentsaidwellonlygiveyoucontractsforoffshorewindif
yourecontributingtocreatingjobcreationinthecountrythatisthe
onlywayIthinktheyllmakeabigdifference. Turbinemanufacturer,
interviewwithippr
TheUKshouldinvestigatewhetherlocalsourcingrequirementssimilartothoseinother
statescouldbeappliedtotheUK.Governmentshouldconsiderwhetherthiskindof
approachcouldbeusedinestablishingpreferredbiddersforRoundThreeoffshore.
Relevantindustryassociationsshouldalsoconsiderissuingguidelinestocompaniesusing
non-UKcontractorsalongsimilarlinestothosesetoutbytheEngineeringConstruction
IndustryAssociation(ECIA),whichincludeguidanceto:
Alwaysconsiderwhethertherearecompetentworkersavailablelocally.
Ifthereare,itisgoodpracticeforthenon-UKcontractortoexploreand
considerthelocalskillsavailabilityandtoconsideranyapplications
thatmaybeforthcoming.(ECIA2009:3)

AnoffshorewindinvestmentprogrammefortheUK
WehavearguedthatoffshorewindisastrategicallyimportantsectorfortheUKandthat
Governmentneedstouseindustrialactivisminordertosupportthisnascentindustryuntil
itisfullymatureandinordertocompeteeffectivelywithothercountriesthatarealready
providingincentivepackagestoattractoffshorewindsupply-chaincompanies.
AlthoughtherearealreadyalotofsupportmechanismsinplaceintheUK,thesetendtobe
fragmentedandareoftenimplementedbydifferentbodies.ThiscanmaketheUKappear
lessattractivetoinvestorsorcompanieslookingtodiversifyintooffshorewind,whomaynot
befullyawareofallofthesupportavailable.Governmentshouldaimtoprovideamore
focusedsupportpackageanoffshorewindinvestmentprogrammethatwouldberunby
DECCandadministeredthroughtheRDAsandUKTI.Theprogrammewoulddrawtogether
theseincentivesintooneplaceandwouldbeeasiertomarketthanthecurrentdispersed
incentives.
Theprogrammeshouldincludethefollowingelements:
Financialandtaxincentives
R&Dsupport
Identificationofapotentialnearshoretestsitelocation
39 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

Publicfundingforinfrastructureupgrades,withaparticularfocusonports
Short-termloanguaranteestopreventdelaysresultingfromthecreditcrunch.
TheGovernmentshouldalsoinvestigatewhetherlocalcontentrules,similartothoseusedin
othercountries,couldbeappliedtoRoundThreeoffshore.
Tobemosteffective,theinvestmentpackageshouldbefocusedonaparticulargeographical
area,inordertopromoteaclusterofgrowth.Inselectingthearea,Governmentshould
considertheneedforeconomicdevelopmentandwhetherthelocalworkforceislikelytobe
abletobenefitfromnewjobsthatwillbecreated.
40 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

5.Skills
AlackofsuitableskillsintheUKhasbeenidentifiedasaproblemfortheoffshorewind
industryfortworeasons:Britishworkerswillnotbewellplacedtocompetefornewjobs
beingcreatedintheoffshorewindsector;anditactsasabarriertoinvestmentbecause
companiesarereluctanttosetupinareaswhereitwillbedifficulttorecruitasuitable
workforce.
MostindustryexpertsagreethattheUKdoesnothaveenoughskilledworkerstodevelop,
manufacture,installandoperatethescaleofoffshorecapacitythatwillbenecessarytomeet
the2020target.Theshortageisattributedtoanumberoffactors,includingagenerallack
ofengineers(particularlyattheskilledtechnicianlevel),competitionwithothersectors
suchasoilandgaswhicharegenerallyabletoofferhighersalaries,andthelowesteemin
whichconstruction,manufacturingandengineeringjobstendtobeheldintheUK(Douglas
Westwood2008,Boettcheretal 2008).
ThisviewappearstobeparticularlystronglyheldbymanufacturersbasedoutsideoftheUK
whoperceivetheUKsmanufacturingbasetohavebeenindeclineformanyyears.Theyare
lesslikelytoconsidersettingupnewmanufacturingpremisesintheUKasaresult.
Mystrongimpressionisthatengineeringisnotheldinhighregard,
manufacturingisnotheldinhighregardandthatformeisa
problemIfIwasawindturbinemanufacturerwouldIgototheUK
andsetitup?Well,possiblyifIthinkthatthemarketishereandthere
arefavourableconditionsbutIwouldcertainlyquestionitfromthe
pointofviewofWillIgetthepeople?WillIgettheworkforce?WillI
gettheengineers?WillIgettheengineeringmanagementtomake
sureitworkswell? Europe-basedcomponentmanufacturer,interview
withippr
TheviewisalsosharedbysomecompaniesoperatingintheUK:
Thebigproblemiswevegotsolittlefundamentalskillssetthatifyou
weregoingtochooseaparticularpartforaturbinesayagearbox
andyourefacedwithabrandnewfactoryinTyneandWearoran
establishedGermanmanufactureryoudprobablygofortheGermans
becausetheyvebeendoingitforalongtimeandtheyvegotasector
thatsfocusedonqualityengineering. UK-baseddeveloper,interview
withippr
However,itshouldnotbeforgottenthattheUKworkforcedoesalreadyhavesome
particularskillsthatwillbeofuseindevelopinganoffshorewindindustrymostobviously,
theexistingskillsbasefromtheoffshoreoilandgasindustry.Thisskillsbasecouldhelpthe
UKtodevelopacompetitiveadvantageinrelevantpartsoftheoffshorewindvaluechain
andcouldhelptoestablishmanufacturingintheUK(inparticular,oftowers,foundations
andoffshoresubstations)aswellasalocalinstallation,operationandmaintenance
workforce.Infact,theexistenceoftheoffshoreindustryhasbeencitedasoneofthe
reasonsthatClipperchosetosetupafacilityinBlyth.
WehaveahugeheritageofoffshoreworkintheUKfromoffshoreoil
andgasandallthoseskillsarerelevant.Wedohaveskilledpeople
heretoworkoffshore.Andwedohavepeoplewhocandesignand
buildlarge,complexstructuresoffshore.Developer,interviewwithippr
41 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

[Skillsarenotaproblem]inallcasesespeciallyupinthe
NorthernpartoftheUKwheretherestillarequiteanumberof
manufacturerswhomanufacturetotheoffshoreindustrythatsthe
kindofskillsyouneed,forinstancewhenyoureproducingthese
hugesteelconstructionsthatareusedasfoundationsforthewind
turbines.Componentmanufacturer,interviewwithippr
IthinkthekeythingistobringthosedevelopersintopartsoftheUK
wherethoseskillsareavailable.Thepositionwereiniswecontinueto
attractoilandgasinvestmentandforthosecompaniestheresa
confidencethattheskillsandtheskilledpeoplewillbethereforthem.
Youretalkinghundredsandhundredsofjobsrelatedtoeachoneand
skillshavenotbeentheshowstopperforanyofthosecompanies.
RegionalDevelopmentAgency,interviewwithippr
Thereisclearlyaneedtodevelopmoreskillsinthisareabutthequestionishowto
achievethis.Someintervieweespointedoutthatifthereisasuccessfuloffshorewind
industryoperatingintheUK,thenpeoplewillnaturallylooktopursueacareerinthat
sectorandwouldpursuerelevantqualificationsinordertobeeligibletodoso.This
chimeswiththeGovernmentscurrentfocusoncreatingademand-ledskillssystem.
However,thereisclearlyachickenandeggtypeofproblemwhenitcomesto
developingnewindustriesintheshortterm,thedemandfortrainingprogrammesin
greenjobswillnotbethereiftherelevantemployersarenotyetlocatedintheUKbut
potentialinvestorsarehesitanttoopennewfacilitiesiftheyarenotconfidentthatthere
willbeasuitablyskilledworkforceavailable.
ThereisaneedforGovernmenttotakeamorestrategicapproachiftheUKworkforceis
tobenefitfromthenewopportunitiesprovidedbyexpandingoffshorewindcapacity.
Justasindustrialactivismisneededtocreatenewjobsanddeliverneweconomic
benefits,soskillsactivismwillbenecessarytoensuretheworkforceissuitably
equipped.Lawton(2009)hasarguedthattheGovernmentsapproachtoskillsshouldbe
targetedatsectorswhicharestrategicallyimportantoffshorewindwouldbeagood
candidateforthis.
Therearethreeelementstodevelopingaskillsstrategyforoffshorewind:
Identifyingthesizeandnatureofthegap
Ensuringtrainingprogrammesareprovided
Findingwaystoattractpeopleintothesector.
Theseareexaminedfurtherbelow.

Closingtheskillsgap
Boththeliteratureonoffshorewindandpeopleweinterviewedforthisreporthighlighta
lackofappropriateskillsamongtheUKworkforceasaproblemfordeliveringoffshore
windandforattractinginvestmentinoffshorewindindustries(see,forexample,
Boettcheretal 2008).However,todate,therehasnotbeenadetailedanalysisofthe
likelysizeofthegapandthespecificskillssetsthatwillberequired.Governmentshould
thereforeconductastrategicassessmentofwhatskillswillbeneededtodeliveronour
carbonreductioncommitmentsandwhatthesizeoftheskillsgapislikelytobe.
Theassessmentshouldbebroadenoughtoconsiderwhattheskillsdemandsarelikelyto
beinotherpartsoftheeconomyasitisclearthatarapiddecarbonisingoftheeconomy
42 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

couldleadtocompetitionbetweendifferentsectorsforthesamepeople.Forexample,
electricalengineerswillbeneededtodelivertheplannedincreaseinotherenergy
sources,completeupgradestothegridandtocompleteotherinfrastructureprojectslike
providingelectrifiedhigh-speedraillinksaswellasinstallingoffshorewindcapacity.
Itwillalsobeimportanttotakeintoaccountthepotentialforexistingskillswithinthe
workforcetoberedeployedintooffshorewind.Thiswillinvolveanalysingwherejobs
utilisingarelevantskillssetarecurrentlysituatedandwhereoffshorewindjobsarelikely
tolocated.

Training
OnereasonoffshorewindcompaniesarehesitantaboutinvestingintheUKisthelackof
appropriateskills.Severalintervieweessuggestedthatonewaytoboostconfidence
wouldbetolaunchalarge-scaletrainingprogramme.
TheotherthingthatwouldhelptoattractindustrytotheUKis
trainingifJohnDenham[SecretaryofStateforInnovation,
UniversitiesandSkills]weretocomeoutandsayweareextremely
committedtorenewablesandthereforewearemassivelyexpanding
thetrainingofengineersandiftheUKthenbegantodothatthat
wouldbeastrongsignaltoindustrytoinvest. Developer,interview
withippr
Somecompanieshavestartedtoestablishtheirowntrainingschemesandthereare
currentlymorethan50coursesacrossthecountryprovidingrelevanttrainingatdifferent
levelsbutmoststakeholdersbelievegreaterinvestmentintrainingandskillswillbe
necessarytoensuretheUKworkforcewillbeuptothetask(SQWEnergy2008).
Anappropriatefirststeptowardsbuildingasuitablyskilledworkforceistopromote
Science,Technology,EngineeringandMathematics(STEM)coursesandapprenticeships
asarouteintogreenindustries.Thiswouldprovidepeoplewithasuitablefoundation
forarangeofjobs,notjustintheoffshorewindindustry.
However,thecurrentlackofskillsintheSTEMareaisawellknownproblemandto
tackleittheDepartmentforInnovation,UniversitiesandSkillswillneedtounderstand
thereasonsformanyteenagerspreferringtogiveupSTEMsubjectsbeforeA-level.While
exhortingyoungpeopletodothesesubjectsdoesnoharmitwillrequireasophisticated
understandingofmotivationsofindividualsinthecontextofformalteachingstructures
tointervenetopromoteSTEMsubjectstoprovidealargerpooloftalenttodrawfromin
themanufacturingindustry.
Asunderstandingofthenatureoftheskillsgapimproves,amoredetailedskillsstrategy
canbedevelopedfortheoffshorewindsector,andmorespecifictrainingcanbe
providedtothosewhoalreadyhavelessspecialistSTEMqualifications.
Wealreadyhave[skills]shortages.Weneedskilled,trained
individualsstraightoffsotheresareal,primeneedforimmediate-
termpeople,butalsointhemediumtolongtermthenwerelooking
atpotentiallyupto60,000peopleinthewindsector.Wereat
around5,000nowsoyoureseeingaverylargeincreaseoverthe
next11years.Sotheresaneedforactiontobringforwardthose
coursesforpeoplewhowanttogetintothesector. Industry
spokesperson,interviewwithippr
43 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

Attractingtheworkforce
Itiswellknownthattherehavebeendifficultiesinattractingpeopletopursuecareersinthe
engineeringandmanufacturingsectorsintheUK,despiteGovernmentseffortstopromote
STEMsubjects.TheGovernmentwillneedtodevelopacomprehensivestrategyforattracting
peopletoworkinthesector.
Governmentshouldworktogetherwithindustryrepresentatives,universities,theLearning
andSkillsCouncil,sectorskillscouncilsandcareersadviserstodevelopacoherentplanfor
attractingpeopletoworkinoffshorewind.Somesuggestionsforthekindsofelementsthis
kindofstrategycouldcontaininclude:
Engagingcareersadvisoryservices
Asafirststep,Governmentshouldencouragetherelevantskillssectorstoworkmoreclosely
withcareeradviceservicesforbothyoungpeopleandadultstoensuretheyhavethemost
up-to-dateandusefulinformationaboutpay,conditionsandprogressionopportunitiesin
offshorewindsothatcareersadvisersfeelconfidentinraisingthisasanoptionwithclients.
Theyshouldalsoadvisepeopleatanearlystageonwhichsubjectswillprovidepeoplewith
therightskillstoworkinoffshorewind.Forexample,itmaybedifficultforsomeonewho
hasadegreeinahumanitiessubjecttomoveintooffshorewind,eveniftheywanttowork
intheenvironmentalsector(Parliament2009).
Highlightingpartnershipsbetweenindustryanduniversities
SeveralintervieweessuggestedthattheGovernmentshouldencourageuniversitiestoform
partnershipswithoffshorewindcompaniestoworkonR&Dwiththeaimofraisingthe
statusandprofileofthesector.ThisapproachhasbeensuccessfulinDenmarkandGermany.
OneintervieweesuggestedthatUKuniversitiesshouldaimtoattractthebignamesinthe
sectorbycreatingProfessorshipsorChairsinrelevantsubjects.
Youneedtheengineers,youneedtheexpertise,youneedtomake
conditionssothatthesepeople,wherevertheyaremaybetheyarein
Europetodayareattractedtocomehere.[Forexample,use]
Professorships,andChairsusethosefacilitiestoreallyprofilethe
countryas[having]alongterm,[commitment]forrenewable
energy.Componentmanufacturer,interviewwithippr
AlthoughtheGovernmentisalreadyworkingtoachievethis,itshouldaimtoraisetheprofile
oftheseefforts(asmanyintervieweesappearedunawarethatthisactivitywasalready
occurring)inordertobettermarkettheUKasaleaderinoffshorewindtechnologies.
Providingincentives
Finally,Governmentcouldconsiderofferingfinancialincentivestopeoplewhotakeup
engineeringjobsinthelow-carbon/renewableenergysectorinthesamewaythatincentives
areofferedtonewschoolteachers.Itcouldalsoconsiderofferingtrainingsubsidiesto
offshorewindcompanies.
Anadditionalproblemfortheoffshorewindsectoristhatitcurrentlyfacescompetitionfor
skillsfromothersectors,mostnotablyoffshoreoilandgas,whicharegenerallyableto
providemuchbetterremunerationthantheoffshorewindsectorcurrentlycan.Areport
commissionedbyBWEAalsonotesthatmanyoffshoreoilandgasworkersenjoytaxbreaks
thatarenotavailabletooffshorewindworkersandrecommendsthattheplayingfield
shouldbelevelled(Boettcheretal 2008).
44 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

6.Conclusionsandpolicyrecommendations
TheUKGovernmenthasexpressedacommitmenttodevelopingoffshorewindandsaidthat
itexpectsthousandsofnewgreen-collarjobstobecreated.Butalthoughsuchahigh-level
commitmentshouldbewelcomed,furtheractionisneededtoturntheseaspirationsinto
reality.TheGovernmentfacestwochallenges:first,gettingsufficientcapacitybuilttomeet
our2020targetsandsecond,maximisingthepotentialforjobcreationandeconomicbenefit
fromthisprocess.
ItisclearthatoffshorewindisexpectedtoplayamajorpartinmeetingtheUKsrenewable
energytargetsfor2020andexpandingtheUKsoffshorecapacitywillundoubtedlycreate
jobs.ThequestionishowmanyofthejobsarelikelytobeUK-basedandtowhatextentthe
Governmentispreparedtotakeactiontoensurethatlocalpeople,particularlyin
economicallydeprivedareas,arewellplacedtobenefit.
WearguethattheGovernmentshouldfocusontheoffshorewindsectorforfourreasons:
Itisasectorwithgrowingimportanceasitwillplayakeyroleinmeetingour2020
emissionstargets
Offshorewindoffersgood,long-termjobprospects
Thereispotentialfordevelopingcompetitiveadvantageandexportopportunities
Jobsintheoffshorewindsectorhavethepotentialtobegoodquality,career-track
jobsandmaybeavailableineconomicallydeprivedareasoftheUK.
Manyintervieweesnotedthattherearealreadycompanieswithsuitableskillsandprocesses
inplacetodiversifyintooffshorewindintheUK.Asafirststep,Governmentshouldcarry
outamappingexercisetoidentifywhichexistingUKcompaniescouldhavethepotentialto
diversify.
Creatingjobsintheoffshorewindsectorwillrequiretwomainstepstobetaken.
Thefirstandmostfundamentalsteptocreatingjobsinoffshorewindistoclarifya
credible,yetstretchingtargetforoffshorewindcapacity.
Next,Governmentneedstoaddressthebarriersthatcouldstilldelayorevenprevent
thedeliveryofoffshorewindcapacityonthescaleandtimetablenecessarytomeet
our2020targets.Thenthereneedstobeafocusonthesupplychain,toensurethat
bottlenecksdonotpreventdelivery.
Thesetwostepswillensurethatsomejobsarecreatedbutinordertomaximiseeconomic
benefits,GovernmentwillneedtoengageinindustrialactivismtosupporttheUKoffshore
windsupplychainasitdevelopsintoamatureindustry.Welookateachofthesestepsin
moredetailbelow.

Overcominguncertaintytodeliveroffshorewindcapacity
Anumberofsignificantbarriersremaintothelarge-scaledeploymentofoffshorewindthat
isenvisagedtobenecessarytomeetour2020emissionstargets.Withoutovercomingthese
hurdles,theoffshorewindmarketisnotlikelytomaterialiseonthetimescalenecessary.The
mostimportantareastotackleareensuringthattheRenewablesObligationisworking
effectivelytopromotethedeliveryofrenewablescapacity,providingthenecessary
infrastructure(inparticulargridupgradesandconnections)andspeedingupandproviding
morecertaintyabouttheplanningprocess.Experiencefromcountriesthathavesuccessfully
developedonshorewindindustriesshowsthattheplanningsystemsandeconomicsupport
mechanismshavebeenimportantfactorsinthedevelopmentofalocalindustry.
45 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

Economicsupportmechanism
InresponsetocriticismabouttheRenewablesObligation(RO),theGovernmenthas
proposedintroducingabandingsystemandextendingtheROuntil2037.Theywillalso
bringinafeed-intariffschemeforsmall-scalerenewablesprojects.Intervieweesforthis
projectwereclearthatfundamentalchangestotheeconomicsupportmechanism(suchas
replacingthewholeROwithafeed-intariff)wouldcreategreatermarketuncertaintythan
hasexistedundertheROtodate,thusmakinginvestmentevenlesslikely.Somealso
questionwhethertheproposednewbandof1.5ROCs/MWhforoffshorewindwouldprovide
asufficientincentivetoovercomethecostsinvolvedofestablishingnewoffshorewind
capacity.
Governmentshouldcontinuetomonitorwhethertheforthcomingchangeshavebeen
successfulinacceleratingdeploymentofrenewables(thatis,whether1.5ROCs/MWhis
sufficientforoffshorewind);andbepreparedtoproposefurtheramendmentstothe
systemifitisfoundnottobesuccessful.
Grid
TheGovernmentiscurrentlyworkingwithOfgemandNationalGridtoaddresstheissues
associatedwithoffshoregridconnectionthroughthedevelopmentoftheOffshore
TransmissionRegimeandthroughtheTransmissionAccessReview.TheElectricityNetworks
StrategyGroup,whichischairedjointlybyDECCandOfgem,iscurrentlydevelopinga
strategicvisionofwherenewtransmissionslineswillberequiredtomeetthe2020targets.
Thisisexpectedtobepublishedinspring2009.Hopefullytheseprocesseswillhelptobuild
confidenceinthedeliveryofgridupgradestomeettheneedsofnewrenewablecapacity.
Thereisariskthattherecessionmaymakefinancingthenewoffshoreconnections
problematic.Governmentshouldmonitorprogresstowardsprovidingoffshoregrid
connectionstoensureprogressisoccurringatasufficientratetomeetthetimetablesetout
forRoundThree.
Governmentcouldoffertounderwriteloansorworkwithfinancialinstitutionsto
encouragelendingtooffshoregridcompaniestoensuretheyareabletoraisesufficient
financetoallowtheworktotakeplace.
Planning
ItishopedthatthenewInfrastructurePlanningCommission(IPC)andNationalPolicy
Statements(NPS)willhelptospeeduptheconsentingprocessandeliminatesomeofthe
uncertaintythathasbeenproblematicforonshoreandoffshorewindfarmdevelopersto
date.However,thereareonlyfiveyearstoestablishtheIPCandNationalPolicyStatements
andgrantconsentsforoffshorewindfarmstoallowconstructiontobeginin2014(see
AnnexIIformoredetail).
Governmentmustmonitorprogressonalloftheseprocessesandensuretheyarekepton
track.

Assistingsupply-chaindevelopment
Manyturbinemanufacturersandcomponentsuppliersarealreadyscalinguptheirproduction
toovercomecurrentsupply-chainbottlenecks.However,therearestillconcernsaboutsome
aspectsofthesupplychain,suchasfoundations.Governmentshouldfocusonensuring
thatshortagesinthesupplychaindonotdelayorpreventtheinstallationofoffshore
windcapacity.
Theglobalfinancialcrisispresentsanewbarriertoincreasingsupply-chaincapacityinthe
shortterm.Wherepossible,Governmentshouldconsiderprovidingguaranteesforloans
46 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

tocompanieslookingtoexpandtheircapacityintheUK.Governmentshouldalsowork
withfinancialinstitutionstoencouragelendingtothissector.
Inadditiontohelpingtopreventbottlenecksintheoffshorewindsupplychain,supporting
theseindustrieswillalsohelptocreatejobsintheUK.Thisisexploredfurtherbelow.

Maximisingthepotentialforjobcreation
ExpandingoffshorewindcapacitywillcreatejobsintheUK.Eventhemostpessimistic
forecastsofjobcreationintheUKin2020(underscenarioswithlowgrowthoftheoffshore
marketorlittleactivismfromGovernmentincreatingjobs)showalargenumberofjobsin
thesectorrangingfrom23,000(Boettcheretal 2008)to40,000(CarbonTrust2008).
Jobsintechnicalconsultancy,operationsandmaintenance(O&M)andservicesaremost
likelytoaccruetotheUK.ForO&Mthisisbecauseitmakessensefortheworkforcetobe
locatedclosetowindfarms.FortechnicalconsultancyandservicesthisisbecausetheUK
alreadyhasexpertiseandskillsinthesesectors.Manufacturing,installationandR&Djobsare
lesslikelytonaturallylocateintheUKbecausethemarketisnotperceivedtobebigenough
towarrantbuildingnewfactories(whenexistingfacilitiesinothercountriescouldjustbe
expanded),thereisalackofinfrastructure(forexampleports),andthereisalackofskills.
IftheUKistomaximisethenumberofjobscreatedintheUKandinparticulartogain
someofthemanufacturing,installationandR&DjobsthatarelesslikelytolocateintheUK
thenGovernmentwillneedtotakeadditionalactiontothatoutlinedabove,anddevelopa
morestrategicapproachtodevelopingtheoffshorewindsector.
Supportforanewindustry
Section4lookedatsomeoftheoptionsavailableintermsofindustrialactivismfor
supportingtheoffshorewindindustry.Governmentshouldseektoencouragelocal
manufacturingandR&Dandshouldaimtoprovideadditionalsupportfortheoffshore
windindustrywhileitisstillinitsinfancy.Thesupportshouldbephasedoutovertime,
astheindustrymatures.
Governmentshouldlaunchahigh-profileUKoffshorewindinvestmentprogramme that
wouldberunbyDECCandadministeredthroughtheRDAsandUKTI.Itshouldbetargeted
atareasthathaveasuitablegeographicallocationandwherethereispotentialforworkersin
decliningorcarbon-intensiveindustriestoretrainandmoveintotheoffshorewindsector.
ItshouldalsofocusonpartsofthesupplychainwheretheUKhasacompetitiveadvantage
orthatcouldbecomebottlenecksinthedeliveryofnewcapacity.Governmentshouldbe
awareofsimilarincentivepackagesbeingofferedinothercountriestoensurethattheUK
offeriscomparableorbetter.Forexample,theapproachtakenbyBISBremerhavenin
GermanytodevelopaCentrefortheProductionandInstallationofOffshoreWindTurbines
wascitedbymanyintervieweesasanexampleofbestpracticethatcouldbereplicatedinthe
UK.
FourwaysinwhichtheUKoffshoreinvestmentprogrammewouldprovidesupport:

i)Financialinput
Thisshouldinclude:
Investmentsupport(includingsubsidiesforcapitalinvestmentandtraining,providing
low-costpremisesandprovidingfinancingsupportintheformofunderwritingloans
orworkingwithfinancialinstitutionstoencouragelendingtothesector)
R&Dsupport
47 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

Investmentinthelocalinfrastructurethatwillbenecessarytosupporttheindustry.
Supportshouldbefocusedonindustriesthataremostlikelytocausebottlenecksinthe
supplychainand/orindustrieswheretheUKalreadyhasacompetitiveadvantage.These
couldincludefoundations,offshoresubstations,cables,installationvesselsandturbine
manufacturers.

ii)Facilitation
GovernmentshouldbeawareofotherwaysinwhichitcanmaketheUKattractiveto
potentialinvestorsandfacilitatetheirdevelopment.Agoodexamplewouldbetoassistwith
developinganearshoretestsiteinUKwaters,whichwouldenablenewentrantstodevelop
anddemonstratenewtechnologiesaprocessthatisessentialforgainingaccesstothe
market.Governmentcoulddomoretofacilitatethisprocess.
AnotherexampleistoassistwithupgradingtheUKportinfrastructure. Withoutbetterport
facilities,itwillbedifficulttoperforminstallationandO&MoperationsfromtheUKand
theseactivitiesmayhavetobecarriedoutfromotherEuropeanports.Governmentshould
workwithsuccessfulRoundThreebiddersandRDAstoidentifysuitableportsand
promoteinvestmenttoupgradetheseports.TheapproachtakenbytheEastofEngland
DevelopmentAgency,whichusedacombinationofpublicandprivatefundingtoupgrade
theportatGreatYarmouth,isagoodtemplatetofollow.

iii)Guarantees
Marketuncertaintyisaproblemthatfeedsdownthrougheverystageofthesupplychain.
Turbinesuppliersarenotwillingtoinvestinnewcapacityuntiltheyarecertaintherewillbea
marketfortheirproduct.Componentsuppliersarenotwillingtoexpandtheircapacityuntil
theyarecertainthatturbinemanufacturerswillincreasetheirorders.Likewise,companies
withthepotentialtodiversifywillnotconsiderdoingsountiltheyknowtherewillbea
demandforthenewproducts.RDAsareunwillingtoinvestinmajornewinfrastructureuntil
theyknowitwilldefinitelyleadtoeconomicbenefitsfortheregion.Thestepsoutlined
regardingtheeconomicsupportmeasure,gridandplanningaboveshouldhelptoimprove
certaintyfordevelopersonthedemandsidewhichshouldthenfeeddownthesupplychain.
Uncertaintyaboutthesupplyoffinanceisalsoaproblem,particularlyintheshorttermas
therecessionmaymakeitmoredifficultforcompaniestoaccessfinance.Governmentcould
increasecertaintybyofferingtounderwriteborrowingforcompaniesacrossthesupply
chain.

iv)Requirements
Someothercountrieshaveusedlocalcontentrequirementstoincreasethelocaleconomic
benefitsofwinddeployment.
TheUKshouldinvestigatewhetherlocalsourcingrequirementssimilartothoseinother
statescouldbeappliedtotheUKorwhetherotheroptionswouldbeavailabletogrow
UKinvolvementinthesupplychain.Governmentshouldconsiderwhetherthiskindof
approachcouldbeusedinestablishingpreferredbiddersforRoundThreeoffshore.
Relevantindustryassociationsshouldalsoconsiderissuingguidelinestocompaniesusing
non-UKcontractorsalongsimilarlinestothosesetoutbytheEngineeringConstruction
IndustryAssociation,whichincludetheguidanceto:
Alwaysconsiderwhethertherearecompetentworkersavailablelocally.
Ifthereare,itisgoodpracticeforthenon-UKcontractortoexploreand
48 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

considerthelocalskillsavailabilityandtoconsideranyapplications
thatmaybeforthcoming. (ECIA2009:3)
Skills
Governmentneedstotakeamorestrategicapproachtodevelopingtheskillsbasefor
offshorewindintheUK.Apurelydemand-ledapproachwillnotattractpeopleintheshort
term(sincemanyoftherelevantemployersarenotcurrentlylocatedintheUK)andmay
leaveUKcitizensinapoorpositiontocompeteforjobsinthefuture.
Thefirststepistoimproveunderstandingaboutthesizeandnatureoftheskillsgap.
Specialistrolesthathavebeenidentifiedasbeingdifficulttofillinclude:projectmanagers,
electricalengineers,turbinetechnicians,planners,mechanicalengineers,offshoreoperators,
marineengineers,environmentalspecialists,structuralengineers,civilengineers,healthand
safetyspecialistsandoperationssupervisors(Boettcheretal 2008).
Governmentshouldcommissionadetailedanalysisofthesizeofthelikelyskillsgapfor
deliveringthe2020renewablestargetandgreenhousegasreductiontargets.Thisshould
takeintoaccountotherindustriesthatarelikelytodrawonthesameskillsbase.
Governmentthenneedstobuildastrategicplanforclosingtheskillsgapandthisneedsto
encompasstwoelements:ensuringthattrainingopportunitiesareappropriateandadequate
andconsideringwaystoattractpeopletoworkinthesector.
Asafirststepontraining,GovernmentneedstomoreproactivelypromoteScience,
Technology,EngineeringandMathematics(STEM)trainingandcoursestoensurethat
enoughpeoplehavetherightsetofbasicskillstoenablethemtoundertakefurthertraining
specifictooffshorewindwhenthatindustrytakesoff.ThereisalackofskillsintheSTEM
areaandtotackleitDIUSwillneedtounderstandthereasonsformanyteenagerspreferring
togiveupSTEMsubjectsbeforeA-level.Whileexhortingyoungpeopletodothesesubjects
doesnoharmitwillrequireasophisticatedunderstandingofmotivationsofindividualsin
thecontextofformalteachingstructurestointervenetopromoteSTEMsubjectstoprovide
alargerpooloftalenttodrawfrominthemanufacturingindustry.Asmentionedabove,
Governmentshouldalsoprovidetrainingsubsidiestooffshore-windcompanies tohelp
employersdeveloptheskillsoftheirworkforce.
Furtheranalysisisneededtoidentifywhethertheexistingtraininginfrastructurewillbe
sufficienttoallowtheexistingworkforcetoretraininordertotakeadvantageofnew
opportunitiesandforthosecurrentlycomingthroughtheeducationsystemtotakeupjobs
inoffshorewind.
Itisalsoimportanttoconsiderwaysinwhichpeoplewillbeattractedtoworkinthesector.
Governmentneedstodevelopacomprehensivestrategyfordoingso.Itisbeyondthescope
ofthisworktosuggesthowafullstrategycouldlook,butweprovidesomeexamplesbelow
ofthekindsofelementsthatcouldbeincluded.
First,Governmentcouldencouragecloserworkingbetweentherelevantskillssector
councilsandcareeradviceservices toensureadvisershavethemostup-to-dateanduseful
informationaboutcareersintheoffshorewindsector.
Second,Governmentcouldraisetheprofileofeffortstoencourageworkingbetween
privatesectororganisationsanduniversitiesintheoffshorewindsector,whicharenot
necessarilyapparenttopotentialinvestorsatthemoment.
Third,considerationshouldbegivento levellingtheplayingfieldforrenewableenergyand
oilandgasfirmswithregardtotaxbreaksforworkers.
49 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

Finally,Governmentshouldconsiderprovidingfinancialincentivestoencouragepeople
intothesector.Thesecouldtaketheformofone-offgrantstoattractpeopletostudy
suitablesubjectsorwhentheytakeupjobsintherenewablessector(inthesamewaythat
incentivesareofferedtonewteachers).

Summaryofrecommendations
Strategicplanning:
GovernmentshouldconductamappingexerciseofexistingUKcompaniesthathave
thepotentialtodiversifyintooffshorewind.
Overcomingshort-terminvestmentdifficultiesresultingfromtherecession:
Governmentcouldoffertounderwriteloansfortheoffshorewindsupplychainto
enableaccesstolowerinterestloans
Governmentcouldworkwithfinancialinstitutionstoencourageloanstotheoffshore
windsupplychain.
Overcomingdeliverybarriers:
GovernmentshouldmonitorprogressonthenewInfrastructurePlanningCommission
andNationalPolicyStatementplanningsystemtoensureitdeliversthequicker
consentingtimesthatareenvisaged
GovernmentshouldmonitorwhetherthebandingofRenewablesObligation
Certificatesissuccessfulinacceleratingdeploymentofoffshorewindandother
renewablesandbepreparedtoproposefurtheramendmentsshoulditnotbe
successful
Governmentshouldprovideinvestmentsupport(suchassubsidiesforcapital
investment,trainingandR&D,providinglow-costpremisesandprovidingfinancing
support)foroffshorewindsupply-chaincompanieslookingtoestablishR&Dor
manufacturingfacilitiesintheUK.Supportshouldbefocusedonindustriesthatare
mostlikelytocausebottlenecksinthesupplychain,includingfoundations,offshore
substations,cables,installationvesselsandturbinemanufacturers.
Maximisingjobcreation:
Governmentshoulddevelopasupportpackagefortheoffshorewindsupplychain
thatenablestheindustrytodevelopwhileitisinitsinfancy.Supportshouldbe
phasedoutovertimeastheindustrymatures.
Thispackageshouldtaketheformofahigh-profileUKoffshorewindinward
investmentprogrammethatwouldberunbyDECCandadministeredthroughthe
RDAsandUKTI.ItshouldfocusonareasofthesupplychainwheretheUKhasa
competitiveadvantageorareasthatcouldbecomebottlenecksinthesupplychain.It
shouldinclude:
Investmentsupport(includingsubsidiesforcapitalinvestmentandtraining,
providinglow-costpremisesandprovidingfinancingsupportintheformof
underwritingloansorworkingwithfinancialinstitutionstoencouragelending
tothesector)
GovernmentassistanceindevelopinganearshoretestsiteinUKwatersby
workingwiththeCrownEstatetoselectanappropriatesite
GovernmentassistanceinupgradingtheUKportinfrastructurebyworkingwith
successfulRoundThreebiddersandRDAstoidentifysuitableportstobe
upgraded
Guaranteesgovernmentshouldoffertounderwriteborrowingforcompanies
acrossthesupplychain
50 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

Aninvestigationintowhetherlocalsourcingrequirementssimilartothoseused
inothercountriescouldbeappliedtotheRoundThreeallocationprocess.
Industryassociationsshouldconsiderissuingbestpracticeguidelinestocompanies
usingnon-UKcontractorsontheuseoflocalskills
Governmentshouldtakeamorestrategicapproachtodevelopingtheskillsbasefor
offshorewindintheUKtoensurethatUKworkersarewellplacedtocompetefor
jobsinthissector.Thisshouldinclude:
Adetailedanalysisofthesizeofthelikelyskillsgapfordeliveringthe2020
targetsacrossallenergyandtransportindustries
Trainingsubsidiesforoffshorewindsupply-chaincompanies
Alevelplayingfieldforrenewableenergyandoilandgasfirmswithregardto
taxbreaks.
Governmentshoulddevelopastrategytoencouragepeopletomoveintothesector,
including:
Governmentencouragementofcloserworkingbetweentherelevantskills
sectorcouncilsandcareeradviceservices
Highlightingofworktobuildpartnershipsbetweenuniversitiesandcompanies
Considerationofprovidingfinancialincentives.
51 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

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56 ippr|GreenJobs:ProspectsforcreatingjobsfromoffshorewindintheUK

AnnexI:Listofinterviewees
1. RobSauven,Vestas
2. MikeRolls,Siemens
3. GordonEdge,BWEA
4. MarkPetterson,WarwickEnergy
5. StephenTindale,RWEnPower
6. DionMetzemaekers,nktcables
7. DavidStill,ClipperWindpower
8. JensFrederikHansen,A2Sea
9. RamonFiestas,AEE
10. JesperByberg,MTHjgaard
11. ChrisHillandJamesLowe,MainstreamRenewables
12. MarkPearson,OneNorthEast
13. MeganArnold,GE
14. SamPryor,SeaRoc
15. ColinSmith,RollsRoyce
16. DaveRogers,E.ON
17. PeterClusky,Mitsubishi
18. BengtHanssonSKF
57 ippr | Green Jobs: Prospects for creating jobs from offshore wind in the UK

Annex II : Implementation timetables

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020
Infrastructure Recruitment of IPC
Planning Commission IPC ready to receive
applications
National Policy Scoping of NPS on
Statements non-nuclear energy
and ports
Consultation and
Parliamentary process
NPS on non-nuclear
energy and ports
designated
Round Three Crown Estate awarding
of Round Three
Development Zones to
selected partners
Planning and
consenting
Construction
Operation
25GW delivery target

IPC=Infrastructure Planning Commission; NPS=National Policy Statement

Sources: Communities and Local Government 2009 and Crown Estate 2008
58 ippr | Green Jobs: Prospects for creating jobs from offshore wind in the UK

Annex III: Funding available in the UK across the innovation cycle

1 2 3 4 5 6 7 8 9
Basic Applied research and Demonstration Pre- commercial
research development deployment
National Research councils
support (300 million on
energy research)
Technology Strategy Board (1bn over
next three years)*
Energy Technologies Institute
(1.1bn over the next 10 years)**
Environmental Transformation Fund (ETF) (125 million per
year)***
ETF DECC and BERR
aspects
ETF Energy
Saving Trust
aspects
ETF Carbon Trust aspects
R&D tax credit
European European Commission
support

Scottish ITI Energy Scotland

and RDA schemes
regional
support

Taken from BERR, Defra and DIUS 2008

*The Technology Strategy Board is a Government-funded arms-length business-led

organisation that aims to promote energy-focused innovation in the UK. Funding is
likely to be around 1bn over the next three years.

**The Energy Technologies Institute is a public private partnership aiming to create a

1.1bn investment fund for new energy technologies. Half of the funding will be from
public money.

***The Environmental Transformation Fund brings together low-carbon-technology

funding programmes that were previously administered by Defra and BERR. These
include the Offshore Wind Capital Grants programme, the Carbon Trusts Offshore Wind
Accelerator