UK Wind Power Market Outlook to 2028

UK Wind Power Market Outlook to 2028

Even as wind power generation technology is now relatively advanced, the industry is reaching a stage of maturity in the key markets, with some other markets still evolving. In 2021, around 93.6 GW of new wind power capacity was added globally, bringing global cumulative wind power capacity up to 837 GW.

Europe, along with China, was the only other region to report new offshore wind installations in 2021, owing to a record year for the UK, which connected more than 2.3 GW to the grid. Despite losing its title as the world's largest offshore market to China, the UK continues to lead the way in floating wind farms, with 57 MW installed in 2021, bringing total capacity to 139 MW.

The United Kingdom, due to its long coastline and windy island, has enormous potential to generate more electricity from wind energy. Renewables provide nearly a third of UK power, with wind energy accounting for half of this. Renewables' share of generation in quarter 2, 2022 was 38.6 per cent, 1.3 percentage points higher than in quarter 2, 2021, but lower than the generation share of fossil fuels (41.9 per cent). This was largely due to an increase in wind generation, with onshore increasing from 7.3% to 9.4% and offshore increasing from 8.5% to 11.3%. Onshore and offshore wind generation is critical to the UK's transition to a future-proof energy system.

The increasing demand for renewable power, energy security issues, supportive government policies and the target to achieve 100% of electricity from renewable sources by 2035 are some of the major drivers of the wind energy market in the UK.

The UK Onshore Wind

Onshore wind is the most cost-effective option for new electricity generation in the UK, outperforming gas, nuclear, coal, and other renewables. According to the government's own opinion polls, this clean, modern technology is popular with the public, with support levels as high as 74%.

Onshore wind already generates enough clean energy to power more than 7.25 million homes annually and provide 12% of the UK's power needs in 2021. In total, the United Kingdom has installed more than 14 gigawatts of onshore wind capacity, which supports jobs and local economic growth.

The cumulative investment impact of the UK's 2,604 operational onshore wind farms is more than GBP 35 billion, demonstrating the significant contribution that onshore wind can make to delivering low-cost, low-carbon energy that pays for itself.

The UK Offshore Wind

The United Kingdom is the global leader in offshore wind, with more installed capacity than any other country (except China). Offshore wind already constitutes 14% of the total electricity produced in the UK in 2021.

Since 2015, the cost of new offshore wind has dropped by 50%, making it one of the cheapest options for new power in the UK, even cheaper than new gas and nuclear power.

Between 2016 and 2021, nearly GBP 19 billion was invested in offshore wind in the United Kingdom. Thousands of jobs in manufacturing, project development, construction, and operations were supported by this investment across the UK.

The offshore wind industry has ambitious plans for a transformative sector deal that will create tens of thousands of highly productive, skilled jobs across the UK and establish offshore wind as the foundation of a clean, reliable, and affordable energy system.

In recent seabed leasing auctions in the United Kingdom, massive bids for fixed and floating offshore wind development sites were received. These included USD 1.1 billion in option fees for approximately 8 GW in the UK Offshore Wind Lease Round 4, USD 955 million in option fees for 25 GW in the ScotWind Leasing round, and USD 4.37 billion in option fees for up to 7 GW in the New York Bight auction. These volumes of investments reflect the intense appetite for offshore wind.

Although no all-time records were set during the second quarter of 2022, generation was a record when compared to previous years' second quarters. Wind speeds for the quarter were in line with historical averages, though higher than in 2021, resulting in relatively higher wind generation. New capacity was also added at the Hornsey 2 offshore wind farm and East Moray.

Small & Medium Wind Power

Small and medium-sized wind turbines enable businesses, communities, and families, including those in rural areas, to transition to clean energy and better manage their energy costs.

For over 40 years, the United Kingdom has been manufacturing and exporting smaller-sized wind turbines and is a world leader in the technology, with a number of UK manufacturers of turbines suited to home, business, and community scale generation.

The decentralized low-carbon generation will be at the heart of a smart energy system, which can enable cost savings across the energy system by increasing the use of local generation and providing flexibility to meet local demand spikes. Technology advancement, including digitalisation, is also providing consumers with the option to participate much more actively in the energy system, and this consumer demand is expected to increase.

Government Support

The United Kingdom is a global decarbonisation leader, with a net-zero goal by 2050, 5-yearly carbon budgets, and a plan to reduce economy-wide GHG emissions by at least 68% by 2030, compared to 1990 levels. Energy technology and innovation are at the heart of the decarbonisation policy, capitalizing on the UK's strengths.

The government of the UK have set for itself an ambitious goal of reaching 100% renewables in its energy mix and decarbonizing its entire power generation by 2035.

With its recently adopted energy security strategy in April 2022, the government of the UK aims to increase the pace of offshore wind projects deployment by 25%, and the government intends to increase offshore wind capacity from 11 GW in 2021 to 50 GW by 2030, which necessitates significant investment in onshore and offshore infrastructure in England, Wales, and Scotland.

Recent Developments

In Dec 2022, the UK government signed an agreement with a group that includes the European Commission to develop offshore renewable energy projects in the North Sea, indicating that the UK is willing to soften its stance in dealing with its former partners post-Brexit.

The new UK Prime Minister, Rishi Sunak, has signalled the end of an onshore wind moratorium. The decision allows communities in England to authorize projects without unanimous approval.

On Dec 13 2022, RWE, one of the UK’s largest energy providers and renewables developers, announced its plans for a new UK project combining solar, batteries, onshore wind and sustainable farming.

Blackridge Research’s UK Wind Power Market Outlook report provides a comprehensive market analysis of the historical developments and targets, the current state of the wind power installation scenario, and its outlook. The insights in the research report – market data, policies and regulations, project data, company profiles, and competitive landscape analysis - have been derived primarily from our proprietary databases and offerings - Wind Intelligence Hub and Project Tracker Service.

The report discusses the impact of the ongoing COVID-19 pandemic on the wind power market, economic trends, and investment & financing scenario in the United Kingdom. It gives insights into the market dynamics and the challenges of wind power development in the country. It also comprises significant market development trends and highlights how the socio-economic, environmental, and political factors affect the nation’s wind market.

Besides, the report looks into the current state and assesses the potential for the future growth of onshore and offshore wind power development.

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