The Crown Estate, which is responsible for managing the UK’s seabed, has announced a significant scheme to support suppliers for the offshore wind industry to develop and scale their businesses.

The Supply Chain Accelerator has a starting funding value of £10 million and an additional £40 million for the next rounds. Each company can apply for up to £1 million in the first stage. The accelerator aims to drive added early-stage investment in the UK’s offshore wind supply chain, expanding the manufacturing capacity for vital components and technologies. There is a primary focus on financially supporting suppliers for floating offshore wind projects in the Celtic Sea. Floating wind enables larger turbine structures in deeper waters, becoming a favoured option worldwide and has the added benefit of Contracts for Difference (CfD) funding in the UK.

Gus Jaspert, the MD of marine for the Crown Estate, explains that offshore wind plays a critical role in our energy transition and is vital for local and national regeneration, providing new jobs, skills and industry. The Supply Chain Accelerator will drive investment in priority areas and support skills to enable further opportunities in the Celtic Sea, increasing economic growth and driving value onshore through offshore projects.

A recent study from CBI Economics shows that the UK’s low carbon economy grew 9% year-on-year in 2023, compared to an average of 0.1% increase in the GDP. The report also showed that employees in industries like renewables secure higher than average earnings.

Applications for the Supply Chain Accelerator funding will commence next month and successful projects will be confirmed later this year. The Crown Estate has appointed the guidance of Grant Thronton to assess and manage the administration.

Government analysis of supply chain challenges concluded a high or medium-high risk of capacity challenges in supply chains for several areas for offshore wind projects and associated transmission infrastructure in this decade. The Crown Estate and RenewableUK previously highlighted the offshore wind manufacturing capacity in the UK could triple within the next decade, supporting any supply chain issues while building the economy. A key challenge for the industry is the increasing component and raw material prices, driven partly by the energy price crisis. Large-scale developers across the UK, US and other markets have halted, paused or even sold projects due to prices rising by as much as 40%.

The UK Government has attempted to combat this rising price issue by increasing the maximum strike price for offshore wind projects via the CfD scheme. At the end of last year, a 52% rise was confirmed for floating wind farms and a 66% increase for other offshore wind projects. Furthermore, offshore wind developers will start receiving payment for their ability to generate low-cost clean energy generation and for supplying broader socio-economic benefits, regarded by the UK Government as non-price factors. These changes will commence in 2025.

‍