Iran War Threatens to Delay Large Offshore Wind Projects in EU and UK
Industry fears that the closure of the Strait of Hormuz could disrupt the shipping of crucial parts for UK and German North Sea projects, putting major offshore wind developments at risk of significant delays.
Supply Chain Disruptions from the Gulf
A string of large offshore wind projects in Europe are facing potential setbacks as the Iran war threatens to disrupt the transportation of essential components manufactured in the Gulf region. Industry sources express concern that parts ordered from suppliers in the United Arab Emirates might become stranded if shipping remains effectively blocked through the Strait of Hormuz. Iran's control over this vital trade route has already disrupted oil and gas deliveries from the Middle East, and now contingency plans may be necessary to prevent delays to clean energy initiatives as well.
Impact on UK and German Projects
These potential delays affect two major offshore wind farms planned for UK waters, along with a series of projects designed to supply offshore wind power to Germany and the Netherlands. The UK wind farms, located off the coast of Norfolk, were each granted a 20-year support contract from the British government just one month before Iran effectively closed the Strait of Hormuz. The developer, German energy giant RWE, has contracted a Dubai-based company to deliver over 180 components from its UAE fabrication yard during the construction phase.
These wind farms are expected to provide electricity equivalent to about 4 million UK homes by the end of the decade, playing a crucial role in supporting Britain's goal to quadruple offshore wind capacity by 2030. A spokesperson for RWE stated that the company has begun closely liaising with its supply chain partners amid the Middle East conflict, which has included airstrikes against key infrastructure. "Our primary focus is the safety of those working in the area," they said. "To date, there has only been a limited effect on our supply chain partners' activities, but we are monitoring the situation closely and putting mitigation plans in place should the situation continue for a prolonged period."
Broader Implications for Renewable Energy
Gulf fabrication yards currently play a minor role in the global renewable energy supply chain, which is well-established in Europe and Asia. However, according to the Middle East Institute, a Washington DC-based thinktank, the Gulf was anticipated to emerge as a hub for international renewable energy supply chains within the next 25 years. RenewableUK, a sector trade body, commented: "We're aware that the conflict in the Middle East could have an impact on several supply chain contracts that UK offshore windfarm developers have with companies based in the United Arab Emirates. These include large steel fabrication work on key components such as turbine foundations and offshore substations. As with many other sectors, the implications of the disruption in the Strait of Hormuz on global supply chains do somewhat depend on whether it remains closed for an extended period of time."
Specific Project Concerns
The shutdown of the strait may also affect a significant project by the transmission operator TenneT, which aims to link offshore wind projects in the German North Sea to mainland Germany. The company has contracted a UAE fabrication yard to deliver structural steel components, including a 5,461-tonne jacket foundation built for the BorWin6 high-voltage transmission project. This section was successfully shipped from the UAE yard just three weeks before the strait was closed. Additionally, three other offshore grid projects—LanWin2, BalWin3, and LanWin4—have contracts with suppliers in the UAE.
A TenneT spokesperson noted that the company's supply chain is "geographically diversified" and only parts for the LanWin2 project are currently being manufactured in the UAE. They declined to comment on the construction and delivery schedules for components related to the company's other projects.
Calls for Local Manufacturing
The threat to supply chains is likely to reignite calls for the industry to prioritise local manufacturing of key components needed to meet renewable energy targets. Ajai Ahluwalia, the head of supply chains at RenewableUK, emphasised: "We're working hard with the government to maximise the growth of the offshore wind supply chain here in the UK, with initiatives such as the clean industry bonus which incentivises the domestic production of components." This situation underscores the vulnerabilities in global supply chains and highlights the importance of developing robust, localised manufacturing capabilities to ensure the timely achievement of clean energy objectives.
