British government announces record funding for clean-energy projects.
The United Kingdom’s new Labour government announced record funding for renewable energy projects this summer – an intervention that promises to further boost an already buoyant sector for the project cargo community.
In early September, the UK held its highest-funded renewables auction to date, with £1.5 billion ($1.97 billion) pledged to support 131 wind, solar and tidal projects. Together, the project could generate almost 10 gigawatts (GW) of capacity – enough to power around 11 million homes.
Through the auctions, held annually, the UK invites renewable project developers to bid for government-backed price guarantees for the electricity produced. In the latest round, Orsted’s giant offshore wind project Hornsea 4 secured the largest contract by capacity at 2.4 GW, while Iberdrola won contracts for its East Anglia Two and East Anglia Three offshore wind projects.
Felix Schoeller, director at multipurpose shipping operator AAL Shipping, told AJOT he expected the UK to generate “a significant amount of wind energy-related transport demand” in the coming years.
Schoeller pointed to Energy Industries Council data showing that offshore wind projects will account for the majority of new renewable energy projects in the next five years. Offshore projects worth more than $80 billion are in the works, compared to approximately $25 billion for onshore wind. Within that, the United Kingdom accounts for more than 40% of offshore wind investment, while Germany comes in second with more than 15% of upcoming offshore wind projects.
Expanding Scope
“Since the introduction of our new Super B-Class fleet in 2024, AAL is now expanding its scope in the wind energy business for both onshore and offshore wind transport, with these vessels specifically designed for this segment,” said Schoeller.
“The accommodation block has been placed at the fore of the vessel to improve visibility when carrying wind blades that are tiered, while the retractable weather deck extension system, the ‘AAL ECO-DECK’, boosts the clear deck space to over 5,000 sq/m, meaning more blades per sailing.
“The 150 m-long deck space, meanwhile, is also well-suited for turbine blades for offshore wind projects, as they typically exceed 100 m long and are growing in size. Therefore, with a greater focus on offshore wind, the UK is a market of great potential for AAL and an area we will target.”
Asked about the attractiveness of wind-related cargo from a logistic supplier’s perspective, Schoeller said: “It is true that wind equipment shipments have shifted from being specialized project cargo to a standard cargo in our industry.
“This especially applies to the onshore wind components, for which the sheer demand of onshore wind equipment – both in the past and in the future – has made it attractive cargo not just for specialized project and heavy lift vessels, such as the AAL fleet, but also for bulk carriers, and even containerships.
“This has certainly pushed the margins down. The dimensions of offshore components, however, still require the specialized fleet of project and heavy lift carriers.”
Notwithstanding his enthusiasm for the UK market, Schoeller noted some of the limitations of working in the country. “Some common challenges when working on UK renewable energy projects include rough seas, strong winds and unpredictable weather conditions.
Space Constraints
“Another potential challenge relates to port infrastructure – the availability and capacity of suitable ports can often be limited and, at times, the infrastructure older. Competition for port space, particularly for offshore wind projects, can lead to delays and increased costs.
“Further still, in the last two years, we have witnessed an increase in the amount of ESG-related material required when tendering projects. This may also apply to UK renewable energy projects, which requires logistics suppliers to include more environmental impact evaluations relating to their transport operations.”
Schoeller welcomed the new Labour government’s decision to repeal the earlier de facto onshore wind ban as “a big step forward, because it removes further restrictive standards, implying that onshore wind applications would now be considered equally with other proposals for energy expansion.”
He added: “This sends a strong signal on the commitment to the doubling of onshore wind energy by 2030 to 35 GW. However, the nine years under the ban has resulted in delays in grid connections and planning systems. Therefore, it will take time for operators to plan and consider onshore wind as a viable opportunity in the UK’s renewable sector.”
Demonstrating the health of the UK market, Warwickshire-based heavy transport and lifting company Allelys recently announced substantial investment in new equipment, at least in part inspired by the renewables boom.
According to chief commercial officer Richard Beardmore, the Allelys shopping spree included multiple girder frame trailers, a range of modular axles and various heavy ballast trucks and was prompted by “the increased demand that we’re witnessing within the UK market.”
Business is Booming
He said: “Whilst we work across the whole energy sector, the projects are significantly biased towards renewable energy, and we don’t expect to see this slowing down. We work hand in hand with transmission and generating companies to deliver the country’s commitment to a greener future.”
Allelys said it was keeping busy with a range of cargo, from peaker plants [peak demand electrical facilities] and synchronous condensers, through to energy from waste and battery storage. “We’re doing it all,” said Beardmore. “We see ourselves as the connector between the goals and the results of achieving net zero.”
Despite the otherwise promising outlook, Allelys can – quite literally – see bumps in the road. “The ongoing issues with the gradual deterioration of the UK’s road network is a considerable concern and has the potential to seriously affect the delivery of key components in the future,” said Beardmore.
“The availability of heavy haulage routes throughout the UK is compromised and our internal route specialists are working harder than ever to identify viable routes.
“For example, we have been supporting customers with overbridging solutions for many years, so that when there’s a route with culverts or bridges with weight restrictions, we have the equipment, knowledge, experience and engineering capability to overcome the route challenges. However, with the ageing road network, this type of solution is something that’s now required on more routes than ever before.”
Whatever the challenges, demand on the logistics sector to service UK renewable energy projects is unlikely to slow any time soon.
