ABERDEEN, Scotland, May 19, 2010 /PRNewswire/ --
- Valuation suggests that the offshore renewable energy industry in the UK, using less than a third of the total available resource, could: - generate the electricity equivalent of 1 billion barrels of oil annually, matching North Sea oil and gas production - create 145,000 new jobs in the UK and provide the Treasury with GBP28 billion in tax revenues annually - ensure Britain could become a net electricity exporter - result in cumulative carbon dioxide savings of 1.1 billion tonnes by 2050 - Report lays out key steps to set UK on a path to access this valuable resource
The Offshore Valuation is published today by the Offshore Valuation Group. It is the first comprehensive valuation of the UK's offshore renewable energy resource over the long-term that explicitly assesses electricity exports to Europe.
The Offshore Valuation Group is an informal collaboration of government and industry organisations that has commissioned an independent report to address the question: what is the value of Britain's offshore renewable resource? The group includes the UK, Scottish and Welsh Governments, The Crown Estate and eight companies across the energy sector.
It is widely acknowledged that within Europe, Britain holds the largest resource of offshore wind, wave and tidal power. Until now the full scale of the economic opportunity this represents has been unknown.
The Offshore Valuation reveals that rapid development of the UK's offshore resource - using fixed wind, floating wind, tidal stream, tidal range, and wave technologies - could by 2050 generate an amount of electricity equivalent to a billion barrels of oil per year, or the same as the average annual output of UK North Sea oil and gas production seen over the past four decades. If developed still further to tap their full practical potential, offshore renewables would allow the UK to power itself six times over at current levels of demand.
The study shows that the offshore resource has value to the UK whether we use the power ourselves or simply view it as an export commodity to Europe.
Three illustrative scenarios calculate the potential Net Present Value to the UK of developing this resource to maturity by 2050.
The report's central scenario examines what would need to happen for the UK to become a net exporter of offshore renewable electricity. To do so, the UK would need to exploit just under a third of its total offshore wind, wave and tidal resource by 2050 - resulting in infrastructure with a positive Net Present Value of GBP35 billion. The supply chain necessary to realise the central scenario would have annual revenues of GBP62 billion in 2050, profits of GBP16 billion, and could employ around 145,000 people in manufacturing, installation and operations maintenance. If fossil fuel prices rise higher than the Government's central projections, the benefits would be larger still.
The report sets out a number of key enablers for Government and industry to ensure the UK is on a path that allows it to access its substantial and valuable resource:
- Make Round 3 offshore wind grid connections 'super-grid compliant' to avoid locking out potential future electricity sales to Europe; - Take a leadership role in the current EU super-grid negotiations, to ensure that the UK derives maximum value from its design and implementation; - Continue to develop the UK supply chain as key to deployment at scale and least cost; - Develop new financing structures that complement the fundamental features of renewable energy infrastructure and can support the scale and speed of industrial growth required.
Tim Helweg-Larsen, Director of PIRC, commented, This report seeks to present to the UK the true value of an energy resource right on our doorstep - at a time when concerns over security of supply and climate change are ever-present. To discover that we own a resource with the potential to return the UK to being a net power exporter, and on a sustainable basis, is genuinely exciting, and a wake-up call to those in a position to foster the further development of this industry.
David MacKay, Chief Scientific Advisor at DECC, said: Britain's huge offshore energy resource is dominated by wind: offshore wind farms occupying a sea-area the size of Wales would deliver more electricity than Britain's average electricity consumption today. The key question is what building and maintaining these wind turbines and their associated energy-storage and delivery systems would cost, in material and financial terms. For me, this helpful work brings home the crucial value of investment in innovation in wind machine designs, in floating wind turbine prototypes, in tidal stream, and in novel energy storage systems.
The Offshore Valuation Group is comprised of a wide range of organisations representing government, industry and the public interest.
Further quotations from other members of the Group are available on request.
The full report is available for download from: http://www.offshorevaluation.org
Notes for Editors The Scenarios - Scenario 1 envisages generating enough offshore renewable energy to meet 50% of UK electricity demand in 2050 - the maximum possible the UK grid can support. - Scenario 2 envisages generating enough offshore renewable energy to meet total UK electricity demand in 2050, allowing the UK to export the 50% it could not use to Europe, becoming a net exporter of electricity. - Scenario 3 envisages generating enough offshore renewable energy to meet total energy demand in 2050 (from electricity, gas, oil-based fuels and other sources), allowing the UK to export what it could not use to Europe, becoming a net exporter of energy.
The Offshore Valuation Group
The Offshore Valuation Group is a group of organisations drawn from across industry and government, chaired by the Public Interest Research Centre, a not-for-profit charity based in Wales. The Group have provided funding, direction and detailed input to the project. Boston Consulting Group (BCG) carried out the study.
The Offshore Valuation Group comprises the following organisations: The Department of Energy and Climate Change (DECC), the Welsh Assembly Government, the Scottish Government, The Crown Estate, the Energy Technologies Institute, Scottish Southern Energy (SSE), RWE Innogy, E.ON, DONG Energy, Statoil, Vestas, Mainstream Renewable Power (MRP), and Renewable Energy Systems (RES). The study also received funding from the Committee on Climate Change.
The Offshore Valuation Group Guy Shrubsole, PIRC +44(0)7792-932-225 Tim Helweg-Larsen, PIRC +44(0)7941-751929 M:Communications Patrick d'Ancona +44(0)20-7920-2347 Elly Williamson +44(0)20-7920-2339
SOURCE: The Offshore Valuation Group
CONTACT: The Offshore Valuation Group: Guy Shrubsole, PIRC,+44(0)7792-932-225, Tim Helweg-Larsen, PIRC, +44(0)7941-751929;M:Communications: Patrick dAncona, +44(0)20-7920-2347, Elly Williamson,+44(0)20-7920-2339