[Skip to content]

Sign up for our daily newsletter
The Actuary The magazine of the Institute & Faculty of Actuaries

UK offshore wind farm construction hit record high in 2016

The total construction value of offshore wind farm projects reached a record-breaking £4.1bn last year, up from £2.45bn in 2015, according to the latest data from Barbour ABI.

Significant investment in wind farm construction ©Shutterstock
Significant investment in wind farm construction ©Shutterstock

These figures signify a 42% share of Britain’s construction contract value in the utilities and power sector, and 21% of the entire UK infrastructure sector.

This trend in increased offshore wind developments is expected to continue, with Barbour ABI reporting that £23.3bn worth of construction contract value is currently in the pipeline.

Their lead economist, Michael Dall, said: “Back in 2013 offshore wind farms accounted for only 7.5% of the annual construction value for the utilities and power sector, which increased in 2016 on the back of significant investment in this type of project.”

“With reports showing that the cost of producing electricity in this way have fallen significantly, the increase in construction value makes sense.”

“We have also seen a large uptake in the planning pipeline for future offshore wind farms over the coming years, suggesting this burgeoning sector will continue to expand in 2017 and beyond.”

The increase in value of wind farm developments last year was significantly impacted by the Beatrice, Galloper, and East Anglia projects, which are together worth £3bn, and once constructed, will produce over 1,600MW of renewable energy per hour.

The UK’s annual offshore wind farm construction contract value since 2013 is shown below:

Source: Barbour ABI
Source: Barbour ABI

These latest figures come after it was reported last month that the cost of energy from offshore wind has fallen sharply to £97 per MWh, compared to £142 per MWh in 2010/11.

UK energy minister Jesse Norman said: “The UK’s leadership in offshore wind clearly demonstrates that it is an attractive destination for renewable energy investment.

“Thanks to the efforts of developers, the UK’s vigorous supply chain and support from government, renewables costs are continuing to fall.

"Offshore wind will continue to help the UK to meet its climate change commitments, as well as delivering jobs and growth across the country.”