A research study commissioned by the North East Local Enterprise Partnership (North East LEP) into the opportunities the offshore wind sector presents for economic growth and employment in the North East, has found that there is potential for significant growth in the number of jobs in both the direct and indirect supply chains servicing the sector and that GVA in the sector could grow between 150% and 190%.
The study, undertaken by Cambridge Economics and Element Energy, sought to provide a better understanding of how the North East LEP and other regional stakeholders can support the local supply chain and deploy the wider regional asset base to realise this value.
It explored four scenarios for growth in the North East, building on extensive strengths which already exist, in which different assumptions were tested in terms of the region’s potential contribution in the UK domestic market, and international export markets.
Assuming a continuation of its current position in the UK sector, in the next decade employment in the North East’s direct supply chain could reach 3,500 jobs and be worth up to £140m in GVA. However, with further strategic development, the number of jobs existing in the sector’s direct supply chain could reach 4,600 jobs and generate up to £180m in GVA. An additional 3,000 – 4,000 jobs could be supported by the offshore wind sector through indirect supply chains and other economic impacts within the region.
Andrew Clark, Energy Sector Lead at the North East LEP, said: “We already know that the North East is a major global hub for the offshore energy and subsea sectors, with world leading supply chain expertise in subsea engineering, design, and fabrication of components such as turbine foundations, pipelines and umbilicals.
“However, we wanted to understand the scale of the role the region can play nationally in delivery of the Offshore Wind Sector Deal, launched last year, and the level of ambition we can strive for in that respect. This research was commissioned to look at this and, precisely how large the impact on the North East economy could be depending on the level of involvement from the region in delivering future projects within the UK and overseas.”
James Richie, Chair of Energi Coast, the North East of England’s Offshore Wind Cluster representing the wider offshore wind supply chain, said: “This study is hugely valuable. It helps demonstrate the huge capabilities and world leading companies we have in our Energi Coast Cluster, and its recommendations will help us build on our current position and shape focussed programmes of cluster development action including in skills and innovation.”
Amongst the study’s key recommendations was the need to develop skills and innovation programmes to ensure future proofing and to meet sector needs. It also highlighted that by promoting the region’s supply chain capabilities, innovative technologies and practices, and existing infrastructure, the region presents a strong offer to developers and the top tier supply chain, and can attract significant inward investment, bringing further benefits to the region.
A good example of this is the recent commitment by SSE and Equinor to place their long-term operational base for the Dogger Bank windfarm at the Port of Tyne.
Andrew Clark concluded: “The UK government has recently updated the Climate Change Act to increase the rate of decarbonisation of the UK economy and reach net-zero GHG emissions by 2050. This will require accelerated delivery of solutions to decarbonise our energy mix, with huge opportunities to secure growth in UK supply chains while doing so.
He added: “At the same time, the government’s Industrial Strategy has outlined key priorities for the coming years, including through the Offshore Wind Sector Deal, detailing ambitious aims for the offshore wind sector. Local authority and LEP-level economic strategies are seeking to prioritise good quality jobs and increasing local productivity. In the context of this national and regional policy, delivery of the offshore wind sector can play a major role in the economic development of the North East.”
For further information on the findings of the study, please contact [email protected].