The UK government should look at reforming government agency UK Export Finance (UKEF) and better support the Department for International Trade (DIT) to help offshore wind supply chain companies flog their wares in rapidly emerging international markets, according to RenewableUK.
RUK senior public affairs manager Nathan Bennett (pictured) called on Westminster to review how UKEF can change its practices to better support renewables companies.
“Between 2013 and 2018 UKEF provided £2.6bn of financing to the energy sector, but only £104m of this was used to support renewable energy projects compared to £2.5bn for fossil fuels,” he told reNEWS.
Support from UKEF helps smaller companies access the loans, insurance policies and bank guarantees they need to foster international trade, he said.
Under Sector Deal plans the value of UK exports is set to increase five-fold to £2.6bn by 2030 but Bennett said there is a “significant opportunity” for further growth, given that new European, Asian and US offshore wind projects will help the global market swell to value of £30bn annually by 2030.
Bennett said UK SMEs need more government support as they lack the economic clout to establish foreign subsidiaries and local partnerships to sell their products and services abroad.
“Officials in the DIT are working hard to guide our supply chain companies into international markets, but they are very underfunded in comparison to our competitor nations,” he said.
“Increased resource would enable DIT to engage with a greater number of UK SMEs, whilst also ensuring they can secure international partnerships, adapt to shifting market opportunities and listen to feedback from industry,” he added.
A UKEF spokesperson told reNEWS the government agency in 2019 helped UK companies secure work at the 376MW Formosa 2 offshore wind farm and 589MW Changfang/Xidao complex off Taiwan.
“Some 30% of UKEF’s support for the energy sector last year backed renewable energy projects. This included helping UK companies export to three huge offshore wind projects off the coast of Taiwan, providing support worth over £400m,” they said.
The spokesperson said the UK Chancellor Rishi Sunak has already allocated £2 billion to UKEF’s direct lending facility to accelerate its support for renewable energy projects.
“This means UKEF can now provide direct loans dedicated to overseas buyers of UK renewable goods or services,” they added.
Bennett meanwhile said the government should also assess whether it can do more to get involved in the early-stage development of market and policy frameworks for offshore wind in countries like Brazil, Turkey, India and South Africa.
“This would enable to DIT to simply follow up on relationships the government has already forged in developing markets,” Bennett said
“This kind of cross-department co-ordination isn’t a new concept and is standard practice in countries like Denmark that have a well-funded ecosystem of government bodies working seamlessly together in unison to increase renewable exports,” he added.