Why supply chains are becoming the next challenge for offshore wind

The UK energy system has reached a turning point. In 2024, renewable sources accounted for more than half of the country’s electricity generation, totalling 143.7 TWh - that is almost a tenfold increase since 2000 and indicates just how quickly the energy mix has shifted.  

The trajectory is set to continue, with national electricity demand expected to rise sharply; by 2050, demand could range from 705 to 797 TWh (representing a nearly threefold increase from 290 TWh today). Offshore wind is projected to play a central role, with the National Energy System Operator (NESO), anticipating that this could supply about half of that total.  

Taken together, these figures point to something much bigger than incremental growth – they reflect a system-wide transformation that will require a rapid and sustained expansion of low carbon generation at the scale the UK has not previously delivered.  

Looking beyond the clean power narrative

The progress made by renewables is widely recognised, and rightly so. However, the focus on clean generation can obscure a more complex reality.  

For years, the sector has been defined by the emissions it avoids during operation. Far less attention has been paid to the emissions from the materials, manufacturing processes, and logistics that underpin each project.  

Across the lifecycle of wind energy assets, carbon emissions are concentrated in the supply chain. This is especially true in the production and logistics of turbine components in comparison to the operational phase.  

Steel and concrete dominate this picture, contributing the bulk of embodied emissions. Blades raise questions about end-of-life management and reuse. Generators and electrical systems depend on a few international suppliers, which introduces both carbon and resilience issues into the supply chain.  

These factors affecting the main components give ideas of where change can be achieved. Towers and foundations are difficult to transport, suggesting that regional manufacturing would be better. However, the UK’s domestic production has been inconsistent. Many projects rely on structures being imported to the site, but there is often limited transparency about their carbon footprint.  

This has practical consequences. Transport emissions increase, and opportunities to specify lower carbon materials, higher recycled content and improved supplier transparency are often lost. Historically, procurement decisions have prioritised cost and availability. As deployment accelerates, this approach is no longer aligned with emerging carbon requirements or increasing scrutiny from clients, investors and policymakers.

Policy signals are reshaping the market

Recent developments point to clear policy shifts.  

AR7 Allocation Round 7 (AR7), the UK government’s seventh and largest Contracts for Difference (CfD) auction secured over 8GW of offshore wind with a £1.8 billion budget. It links clean power growth to supply chain decarbonisation and domestic investment. AR8 Allocation Round 8 has begun and will conclude between November 2026 and February 2027. 

Central to this is the introduction of the Clean Industry Bonus (CIB), backed by more than £200 million. The mechanism is designed to incentivise investment in coastal and former industrial regions, thereby supporting shorter, lower carbon supply chains. Industry response has been strong, with high levels of participation. Each £1 of CIB funding is expected to unlock £17 of private investment into manufacturing and port infrastructure.  

Looking ahead, future auction rounds are expected to build on this approach. Early proposals indicate that access to the CIB under ‘cleaner supply chains’ criteria could require offshore wind developers to demonstrate Science Based Targets (SBTi) coverage across approximately 40% of specified tier-1 components - primarily the carbon-intensive, high-value elements supplied directly to the project, such as turbine blades, towers, nacelles and key electrical infrastructure.  

This does mark a clear shift in how projects will be evaluated. The success will not be determined by price alone, but by the ability to evidence shorter and more resilient supply chains and decarbonisation at the supplier level.

What this means for developers and the supply chain

The implications for developers and their partners are immediate. The supply chain and its strategy will become a defining factor in a project’s competitiveness moving forward.  

Those that act early have an opportunity to reshape logistics, reduce upstream emissions and position themselves more strongly in future auction rounds. At the same time, they can help anchor high-value industrial activity within the UK.  

Recent investments have shown us what the transition could look like in practice. Developments like SeAH Wind’s monopile facility in the North East of England or Sumitomo’s subsea cable plant in Scotland demonstrate how, when public support is targeted, it can result in greater private capital whilst supporting domestic capability.  

The investments also support the region's wider ambitions. In the North East, more than 25,000 people are currently employed in green energy, and there are plans to double the size of that workforce over the next decade. By expanding domestic manufacturing capacity, projects can contribute to long-term economic growth as well as decarbonisation.  

Ultimately, increasing the share of onshore manufacturing changes the value equation. Components that were previously shipped from long distances, resulting in a high carbon cost, can be produced closer to where they're needed. This improves the transparency of the supply chain while reducing emissions and retaining economic value within the UK.  

Ultimately, the sector is moving into a new phase. The focus isn’t solely on the carbon of the kilowatt hour, but on the carbon of the supply chain behind it. Decarbonising this is not a marginal adjustment – meeting this challenge will define the next era of renewable energy development.

As offshore wind scales, integrating supply chain decarbonisation and addressing decarbonisation into strategy, design and procurement is key. To learn more, reach out to a member of our team to find out how we can support with your strategy.