Energy, Oil & Gas

UK offshore wind growth depends on grid upgrades, market reform: GlobalData

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The UK’s offshore wind expansion and wider clean-power transition will depend on faster grid connections, transmission investment and electricity market reforms, according to GlobalData, as renewable energy and nuclear capacity reshape the country’s power sector.

GlobalData’s latest report, UK Power Market Trends and Analysis by Capacity, Generation, Transmission, Distribution, Regulations, Key Players and Forecast to 2035, projects that the UK’s installed power capacity will almost double between 2025 and 2035.

Renewables are expected to account for 73 per cent of the generation fleet by the end of the period, led by offshore wind, solar photovoltaic (PV) and onshore wind.

Attaurrahman Ojindaram Saibasan, Power Analyst at GlobalData, said offshore wind remains central to the country’s clean-power strategy, supported by North Sea developments, the ScotWind leasing round and annual Contracts for Difference (CfD) auctions.

“Offshore wind is central to the UK’s clean power strategy. The project pipeline includes large North Sea developments and the ScotWind leasing round, while annual Contracts for Difference (CFD) auctions continue to provide the principal route to market for large-scale renewable projects. However, project awards alone will not ensure delivery. Developers require timely connections, supply-chain capacity, and a market framework that reflects the changing value of power by location and time of day.”

Electricity demand is expected to recover and increase as transport, heating and industrial processes become increasingly electrified.

Renewable generation is projected to supply roughly two-thirds of gross electricity output by 2035, while gas-fired plants provide flexible balancing capacity and nuclear power contributes low-carbon generation.

However, the retirement of older nuclear stations before replacement projects become operational could create challenges for energy security.

Grid capacity remains a major constraint, with renewable projects facing connection queues and new offshore developments requiring expanded transmission infrastructure to deliver electricity from coastal landing points to demand centres.

The National Energy System Operator, transmission owners and Ofgem are pursuing reforms to accelerate network investment and improve connections.

Saibasan said: “The UK has a strong foundation for a high-renewables system: a mature CFD mechanism, deep offshore wind resources, extensive interconnection, and a competitive retail market. Yet the next stage of the transition requires the network to become more anticipatory. Transmission, distribution capacity, storage, demand response, and digital flexibility must develop alongside generation rather than after it.”

The UK’s electricity interconnectors with France, the Netherlands, Belgium, Norway, Denmark and Ireland also support supply security and help balance renewable generation across markets.

Investment through the end of the decade is expected to target offshore wind, nuclear, solar PV, onshore wind, grid infrastructure and flexibility technologies.

CfD auctions provide long-term revenue support for renewable projects, while the Regulated Asset Base model supports financing for new nuclear developments.

Saibasan concluded: “The UK’s challenge is no longer setting clean-power ambitions; it is converting an extensive development pipeline into operating assets. Success will depend on synchronizing renewable deployment with grid expansion, flexible capacity, and reforms that maintain the investment case for low-carbon generation.” -OGN/TradeArabia News Service