Wave growth can support offshore wind supply chain

There is no use moping. The UK’s decision to leave the European Union has sent waves of uncertainty across the world, including for those working in onshore and offshore wind.

But, like Pollyanna, we are determined to be optimistic and hunt for the opportunities. And the changes in the UK’s political landscape after last month’s referendum do seem to present an opportunity for those working in one emerging green energy technology: wave power. If this sector takes off, there could also be benefits for those in the offshore wind supply chain.

The first thing to say is that we should not be under any illusions: wave power is still a tiny part of the UK energy mix, with only 4MW currently installed in demonstrator schemes.

This is less than 0.001% of the over 5GW of offshore wind power in UK waters; and even if the growth predictions come true, there would still be only 29MW in 2018. See? Tiny — but those in the wave sector think political changes after Brexit will mean growth.

For example, developer Tidal Lagoon Power is planning a 320MW tidal array in Swansea Bay, which would be worth around £1.3bn. The Department of Energy & Climate Change is poised to take a decision on whether to provide subsidy support later this year, and Tidal Lagoon Power’s chief executive Mark Shorrock told Bloomberg that he is confident.

“There’s a bunch of Brexiteers that said: ‘You’re in the front rank of projects that we want to see happen,” he said. Those in the anti-EU wing of the UK’s ruling Conservative Party are more positive about wave power than about wind for a number of reasons.

These include the fact that waves are more reliable than wind; that wave and tidal projects have less visual impact than wind farms; and they allow the UK to exploit its waters. There does appear to be political appetite to grow the wave sector, and we see no reason that it should be at the expense of wind. We saw in a recent deal how the two can co-exist.

Last week, tidal developer Atlantis Resources agreed with the owner of a nearby wind farm to share the grid links used by the 6MW first phase of its planned 400MW MeyGen array off the coast of Scotland. In this deal, the wind farm owner Wind Harvest could use the link to export power from its 9.2MW Lochend project when not needed by MeyGen. This can help to balance the amount of electricity going into the grid, which boosts reliability.

And if the wave sector takes off then it should create opportunities for firms in the offshore wind supply chain. A tidal array and a wind farm are very different, of course, but they all require skilled people who can get the technology to sea, install and maintain it.

If the Swansea Bay scheme secures a government power purchase agreement then it is looking to reach financial close by summer 2017. This would then herald the start of a five-year build-out that would create as many as 1,850 jobs. Those with experience working in the offshore wind, oil and gas sectors are those that we see are in line to benefit.

We still worry about Brexit — of course we do — but there is no reason to think it should spell total doom for those in the offshore wind supply chain. The UK still has a looming energy crisis the government needs to address, and offshore wind is still a part of that. Yes, financial turmoil will make it difficult for some projects to reach financial close, but that happens in good markets too.

And it could open up whole new avenues of work in the nascent wave sector. It is not a huge market yet, but could grow fast over the next decade with political support. Right now, it seems to have that support — and, in times of trouble, that is like gold dust.