The Blog - Wind energy market analysis

Posted 05/05/2017

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A British success story... but how long can it last?

A British success story that deserves to be told.  This is how trade association RenewableUK has defined the extent of the UK’s exports in the wind, wave and tidal sectors.  

Last week, RenewableUK published a report called ‘Export Nation: A Year in UK Wind, Wave and Tidal Exports’. This study has analysed a sample of 36 UK-based companies operating in the wind and marine energy sector, which exported products and services to 43 countries last year. The 36 companies sampled for the report signed a total of 557 export contracts in 2016, which ranged from £50,000 to up to £30m each. Typical contracts were worth between £1m and £5m.

Among the three renewable energy resources which have been analysed, onshore wind offered the highest number of exports destinations and the companies studied won contracts in 28 countries. This shows that, despite the UK government’s hostility to onshore wind in the last two years, there is great deal of potential for exports-focused UK business.

However, there are two key points here worth thinking about.   

First, strong exports in onshore wind mean that that the UK government is missing a trick. Since it ended subsidies to the onshore wind in 2016, companies have started preferring to export their expertise instead of investing it in the domestic market. An understandable response, but one that suggests the UK is not taking advantage of homegrown expertise.

Utilities seem to be particularly aware of this. This week, SSE urged the next UK government to reconsider the future of onshore wind because it is “the cheapest low-carbon source of electricity”. The government’s support to the sector would allow companies to grow also domestically, contributing to the domestic economic growth while further supporting the country’s exports. 

Second, it is not a coincidence that in the 12 months after the UK decided to leave the European Union, its exports in renewables – and in every other sector – speeded up. 

The pound’s decline since the Brexit referendum has increased the UK’s competitiveness, while the country still enjoys free trade with the European single market. Indeed, there is no surprise that five out of ten of the most favourite countries in which wind and marine energy companies exported in 2016 are in the EU.

There is a good UK exports story here. But with access to the single market under threat and no imminent change expected to government energy policy, we would question how long this export growth can be maintained.

 

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