UK offshore wind to struggle with surge in projects

MANCHESTER (Reuters) - Britain's offshore wind industry will struggle to fulfill new orders in four years' time as the yearly growth in UK offshore wind farms is expected to double between 2015 and 2016, figures released by Britain's renewable energy trade association showed on Tuesday.

Annual offshore wind deployment will rise to 1.2 gigawatts (GW) in 2012 and exceed 2.5 GW in 2016, after a forecast drop in activity in 2013-14 due to a lack of consented projects, RenewableUK said.

"This (growth) would represent a major challenge for the supply chain, especially as the relatively slow years in 2013 and 2014 are unlikely to give the supply chain the confidence required to invest heavily," the association said in a progress report on wind energy in Britain.

Nevertheless Britain is expected to remain a world leader in installed offshore wind capacity in five years' time and other growth markets in Europe should be seen as a benefit to the UK market as wind farm developers seek to diversify investment risk.

Last week, Britain's Energy Secretary reassured the offshore wind industry by extending current levels of state subsidies by one year to 2015 and reducing previously set aid cuts for the subsequent years.

Britain seeks to generate 15 percent of its energy from renewable sources by 2020 in a bid to reduce greenhouse gas emissions.

"Offshore wind continued to represent the single most important route to meeting 2020 renewable energy targets whilst, at the same time, offering a major opportunity in terms of value creation for UK businesses," the association said.

On the other hand, onshore wind farm development remains threatened by local opposition.

Approvals for onshore wind farms have hit an all-time low of 42 percent across the UK and dropped as low as 26 percent in England, industry figures showed.

"Such a trend risks having a significantly negative impact on future renewable energy capacity deployment in England and could have implications for the UK as a whole if such trends emerge elsewhere," RenewableUK said.

(Reporting by Karolin Schaps; editing by Keiron Henderson)