New energy strategy set to boost renewable contracts

The finishing touches are being put to the government’s new energy security strategy which is being drawn up in the light of the Ukraine crisis and the soaring price of oil. It is widely expected to give a boost to nuclear and renewables, particularly solar power, along with measures to increase North Sea oil and gas production.

Action on these fronts will help achieve some of the extra investment needed to meet growing electricity demand which was highlighted in the recent Glenigan Building Back Greener report. But it will also create new opportunities for construction contracts as the country seeks to reduce its dependence on imported energy, particularly from Russia.

Increase in solar power

The prospect of a major increase in solar power - with a reported ambition to more than treble the volume of electricity from solar panels from 14GW to 50 GW by 2030 - will provide a boost to an already busy sector. Easier planning regulations for solar farms could also be in the pipeline.

Glenigan data highlights the variety and scale of the contract opportunities on solar projects. At Sleaford in Lincolnshire for example, contracts have been let and work is set to start this autumn on a £17.4 million project to build a 32 MW solar farm at White Cross Lane (Project ID: 17435414).

Smaller contracts include a £1 million solar photovoltaic array in Hatfield for Aberdeen Standard Investments involving the installation of over 3,500 solar panels on an existing building roof (Project ID: 22118081).

The government’s strategy also envisages a major expansion in nuclear energy. A go-ahead for Sizewell C in Suffolk – where a Planning Inspectorate report is expected in late May - came a step nearer when the government recently agreed to take a 20 per cent stake, involving a £1.5 billion investment. Work on the project could start in 2024 (Project ID: 01611111).

But the government is also set to revive plans – and has set aside £120 million in funding support - to build a nuclear plant at Wylfa in Anglesey. Talks are underway with an American nuclear manufacturer on what would be a potentially huge source of contract opportunities on a project valued at £20 billion (Project ID: 09130346).

Wind farm expansion

Although it is likely to court controversy, the government’s energy strategy is likely to include incentives to expand onshore wind farms. This will give a boost to a sector where Glenigan data shows some significant new construction contracts are available. For example E.ON Energy has recently submitted detailed plans for a £54 million onshore Afton Wind Farm in East Ayrshire involving 27 turbines and where Farrans Construction is the site enablement subcontractor. Work could start this autumn and run for 24 months (Project ID: 05044975).

The new strategy is expected to involve more licenses for North Sea oil and gas operators to expand production. This should reinforce the growing volume of construction work around ports and supply chain facilities in areas which support the offshore sector such as Aberdeen and Great Yarmouth & Lowestoft. Funding has been allocated on one significant scheme, a £30 million expansion at Aberdeen South Harbour and work - which is at the pre-tender stage - is set to get underway this autumn (Project ID: 22036833).