Unleashing the UK’s full wind power potential

Wind power is set to grow rapidly

The UK government intends to ramp up wind power generation capacity from 29GW to as much as 80GW by 2030¹, while globally, a pipeline of 8,700 onshore and offshore wind projects could add 2,200GW, were they all to proceed. Additionally, opportunities for innovation are plentiful, even in mature markets.

But rising supply chain costs remain a challenge

Some supply chain costs continue to rise faster than inflation, creating a challenge for developers awarded inflation-linked electricity prices by the UK government. More investment throughout the supply chain can be part of the solution.

Access to financing is key to success

Key to addressing costs – and supplying the investment needed – is a coordinated approach to financing by government, businesses, institutional investors, and the financial sector. As one of the biggest lenders in the world, HSBC can play a critical network role in making this a reality.

The rapid growth of wind power generation has made the UK an example for other markets to follow. Industry leaders, however, argue that further measures and clearer financing models are needed to overcome some growing pains in international markets and maintain the UK’s pace of expansion.

Randolph Brazier, Global Head of Clean Power Systems at HSBC, highlighted the growing demand for wind power, with wind farms in development in multiple markets, including the US, continental Europe, China, Taiwan, Korea, India, Southeast Asia and Australia.

“Globally, we are tracking 8,700 onshore and offshore wind projects that are in planning, or have been permitted, or are nearing financial close,” said Brazier. “In total, that’s 2.2 terawatts of power. We estimate that USD1.4 trillion in investment is required in wind capacity between 2024 and 2030.”

China continues to lead the growth of wind energy globally, accounting for a third of the projects in the Global Energy Monitor’s wind power pipeline². However, the UK is seen as an international leader for financing, regulations and Contracts for Difference (CFDs), a type of power purchase agreement that supports renewables generation.

“There are several reasons why the UK remains an attractive market,” said Rob King, Head of Sustainable Finance and Transition at HSBC UK. “It’s very bankable, and industry participants understand CFDs and the regulations. Many markets have learned from the UK’s approach.”

The UK boasts an impressive track record. Between 2017 and 2024, it doubled its onshore and offshore wind power capacity to 30 gigawatts (GW)³, making it the country’s largest source of electricity generation⁴. The wind energy sector now employs 55,000 people, with 40,000 in offshore wind, an increase of 24% in the last two years⁵.

The government wants to do even more. By 2030, the Department for Energy Security and Net Zero is projecting 43-50GW of installed capacity in offshore wind (up from 14.8GW as of December 2024) and 27-29GW of onshore wind (up from 14.2GW)⁶. The total potential pipeline for offshore wind in the UK is 93GW, including a large amount of floating offshore wind in Scotland⁷.

“The UK has already expanded wind generation very quickly, and the government wants to more than double it by the end of the decade,” said King. “That translates to huge opportunities across the entire value chain.”

This growth could be a major economic contributor, with every additional gigawatt of offshore wind generation adding an estimated GBP2 billion-GBP3 billion (USD2.7 billion-USD4.1 billion) to the UK economy ⁸

There are also opportunities for innovation, even in the mature UK market. For example, developments in artificial intelligence solutions, robotics and floating wind farms could help improve offshore wind energy efficiencies.

HSBC is looking to support the continued growth of the wind power sector with a full range of tools and financing solutions. The bank’s global network is especially well suited to helping UK clients identify potential partners and opportunities around the world, and to help international clients invest in the UK’s wind sector.

“Companies within the wind power value chain have seen rapid growth for a number of years and there are clearly opportunities for that to continue going forward, and we are trying to help them ramp up towards that,” said King. “We work with 58 countries and territories and believe UK companies have many opportunities to transfer technologies, expertise and a track record of delivery into them.”

But not everything has been plain sailing. Rising supply chain issues⁹ and geopolitical uncertainty are forcing a reappraisal of the costs of new renewable energy generation.

“We have all seen the historic decline in the costs of onshore and offshore wind, but there are also increasing supply chain cost challenges that will need to be addressed,” said Tim Lord, Head of Climate and Energy at HSBC UK. “We need to quickly develop supply chains which can enable our ambitions on wind deployment, and UK economic benefit, to be delivered.”

Supply chain costs that rise faster than inflation are a particular challenge given that CFDs are linked to inflation. But they are also partly a reflection of the scale of opportunity that exists throughout the wind power supply chain.

More investment will help to address these costs – and so help the UK hit its ambitious objectives. Targets for this investment should include port facilities, transmission infrastructure, and the training of thousands more engineers.

The scale of investment required means careful coordination will be needed to maximise the growth of the wind power sector and help businesses access essential capital.

Trade association RenewableUK is trying to help. In addition to tracking every onshore and offshore wind project and related contract, in June it launched an investment guide¹⁰ detailing the public funds and financial institutions that can support wind operators and suppliers.

This includes the likes of GB Energy, which in April pledged GBP300 million in grant funding for offshore wind projects in the UK¹, while the Crown Estate is providing GBP400 million¹² and industry developers have committed a further GBP300 million¹³. Other supportive institutions include the UK’s National Wealth Fund¹⁴ and the Scottish National Investment Bank¹⁵.

Market participants are looking to banks like HSBC to connect these resources with other sources of capital, including regional development banks, commercial lenders and institutional investors, to maximise access to funding.

The wind power industry faces real constraints, yet the growth outlook is strong. Businesses with industrial know-how and which are well-versed in regulation and licensing can be well placed to benefit.

Today we finance a number of industries that significantly contribute to greenhouse gas emissions, we have a strategy to help our customers to reduce their emissions and to reduce our own. For more information on this, please visit hsbc.com/climate.