UK announces Clean Industry Bonus for offshore wind manufacturing

Arriving at the COP29 climate summit in Baku, Azerbaijan, UK Prime Minister Keir Starmer announced a Clean Industry Bonus to incentivise offshore wind developers to invest in sustainable factories in UK’s historic industrial heartlands, coastal areas and oil and gas communities.

The bonus will come with a provisional GBP 27 million (USD 34.8m/EUR 32.7m) per GW of offshore wind projects, meaning that the budget could reach GBP 200 million if 7 GW to 8 GW of offshore wind apply, a government announcement says.

The measure is part of the new UK government's ambition to make the UK a clean energy superpower and is in line with a manifesto commitment. The bonus will reward firms for investing in less polluting suppliers, helping to attract private investment in communities across Scotland, Wales, the North East and North West, to build more sustainable offshore wind blades, cables and ports.

The Clean Industry Bonus will allow fixed and floating offshore wind projects to secure extra contract for difference (CfD) revenue support. The bonus allocation framework has been published on the government website.

At the summit, the UK will announce the launch of the new CIF Capital Market Mechanism on the London Stock Exchange. In addition, the official statement says that the country is set to announce during COP29 a new UK climate target to reduce emissions.

The target will be to cut emissions by 81% compared with 1990 levels by 2035, the Guardian reported, citing people familiar with the matter.

Commenting on the bonus, RenewableUK's chief executive Dan McGrail said: “It’s the right time to introduce the Clean Industry Bonus, as offshore wind supply chain companies are actively considering new investments to service the rapidly expanding global market. Growing our industrial capability now will put the UK in a strong position to sell our high-value goods and services abroad in the coming years."

Securing £1 billion investment in offshore wind is a major step forward in our mission to make the UK a clean energy superpower.

It will fire up our industrial heartlands and break down barriers to growth across the country.

We will lead the world in industries of the future. pic.twitter.com/2utqlbsWYe

— Keir Starmer (@Keir_Starmer) November 12, 2024

The announcement came as ScottishPower awarded a GBP-1-billion turbine contract for its East Anglia TWO offshore wind project to Siemens Gamesa. The deal includes blade production at the manufacturer’s Hull blade factory, which now employs around 1,300 people, having added more than 600 new employees over the last 12 months.

“Getting more projects like East Anglia TWO off the blocks quicker will turbo-boost the UK’s supply chain, giving companies like Siemens Gamesa the confidence to invest in facilities like this blade factory in Hull,” said ScottishPower CEO Keith Anderson.

(GBP 1 = USD 1.288/EUR 1.209)

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