The Energy Transition | UK government updates assessment of renewables deployment supply chain readiness

This week we look at DESNZ's updated assessment on UK renewables deployment supply chain readiness, the government's consultation on whole energy cyber-resilience requirements, and the results of the first run of the new Demand Flexibility Service.

Government publishes updated study on renewables deployment supply chain readiness  

The Department for Energy Security and Net Zero (DESNZ), in partnership with consultancy firm Baringa, has published an update to its 2024 assessment of constraints affecting key renewable and network technology supply chains through to 2035.

The report finds that supply chain risks have eased in many, though not all, respects since 2024. It concludes that additional measures are still required to deliver the objectives in the Clean Power 2030 Action Plan and to achieve the goal of at least 95% of Great Britain's electricity demand being met by low-carbon sources.

The study covers analysis of three renewable energy sectors: offshore wind, onshore wind, and solar photovoltaics (PV). It builds on the original 85 interviews from the 2024 study and incorporates 16 further interviews with major UK-based developers and trade associations, including some of the original participants.

Offshore wind 

Offshore wind continues to experience the most acute supply chain constraints of all the technologies assessed, with the most significant relating to the supply of floating foundations, high-voltage direct current (HVDC) cables and converter stations, all types of installation vessels, and turbines.

The report attributes these constraints in part to the financial vulnerability of turbine manufacturers and to the investment uncertainty stemming from difficulties in securing planning permission and a profitable route to market.

The report examines four areas of concern within the offshore sector: turbines, floating foundations, HVDC cables, and vessel and port capacity. 

Turbine availability 

The report finds that developers' primary concern has shifted since 2024 to turbine availability, although it notes there is still "limited data on manufacturing capacity to support this concern". The previous "turbine size race", which had shortened product lifecycles and disrupted high-volume serial production, is slowing and the market appears to have settled around the 15MW market.

Floating foundations

An established floating wind supply chain is yet to emerge; the current manufacturing capacity is sufficient only to support small-scale pilot projects. While some uncertainty remains over which designs will prevail, there is a growing consensus among developers to procure triangular steel semi-submersible structures, though the report suggests that this could reflect what is available rather than the optimal choice.

HVDC cables and balance of plant

Constraints on HVDC export cables have "eased slightly", the report states, reflecting investment in new manufacturing facilities in Europe and Asia.  Nonetheless, lead times are long, and modelling indicates that total capacity will fall short of the combined demand from offshore wind, grid, and interconnector customers.

The report notes a "severe HVDC shortfall" in 2025-26, and continued long lead times due to insufficient manufacturing and testing capacity for components such as transformers and converters. It also identifies competition in Contracts for Difference (CfD) auctions as potentially having disincentivised developers from collaboration on supplier development and joint procurement of key components such as HVDC converters and floating foundations.

Vessel and port shortages

Operators expect a global vessel shortage within the next one to three years, especially for those capable of deploying the largest turbines and foundations. The limited deep-water port capacity also poses a risk for offshore wind deployment.

Onshore wind 

Supply chain constraints for onshore wind are reported to be less acute than for offshore. The main constraints continue to relate to planning permission and grid connections, along with uncertainty over the continued availability of Class I-A turbines required for the UK's high wind speeds and extended lead times for transformers and switchgear. However, the report notes that lead times for transformers and 400kV units have fallen to around 18 months and 24 months respectively, down from 24 months and four years in 2024.

Solar PV 

Solar PV is experiencing the least severe supply chain pressures of the three technologies, helped by substantial investment in global manufacturing capacity. As with onshore wind, the most significant remaining constraints relate to lead times for securing transformers and switchgear. The report also highlights unresolved concerns over forced labour in China within the supply chain for PV modules.

Government's response 

Since the original 2024 study, the government has taken steps to address competition between renewables and other industries for supply chain resources. The report outlines several major industry initiatives, policy updates and funding programmes to help achieve the Clean Power 2030 deployment targets.

These include higher administrative strike prices for CfD Allocation Round 7 to reflect input costs and the cost of capital in order to improve the viability of pipeline projects, and a £1 billion package to support the offshore wind supply chain. The package is made up of £300 million of capital grant funding from Great British Energy, £400 million from The Crown Estate to support new infrastructure and £300 million of industry funding under the Industrial Growth Plan.

The report also notes the decision to raise the nationally significant infrastructure project (NSIP) threshold for energy schemes from 50MW to 100MW from January 2026 to simplify the planning process for medium-scale developments and reduce the uncertainty that contributes to the constraints. It states, however, that further action is required to address the risks created by an uncertain policy and regulatory climate, citing the upcoming Strategic Spatial Energy Plan (SSEP) as an example of a tool that can be used to ensure the right infrastructure is being supported effectively. 

Government consults on cyber obligations for British energy businesses 

DESNZ and Ofgem have jointly launched a consultation proposing to reform cyber resilience requirements for the downstream gas and energy sector. The consultation focuses on two proposals:

The first is a proposal to introduce baseline cyber resilience requirements for all Ofgem gas and electricity licensees, through low-burden licence condition updates to protect against the most common cyber attacks. The second proposal is for the expansion of the scope of the Network and Information Systems (NIS) Regulations for downstream gas and energy, by amending the NIS criteria for designation to ensure that operators that can affect system stability fall within the regulatory framework.

The government has cited a rise in "nationally significant cyber attacks" and is looking to improve cyber security and resilience across the sector and through the whole energy system. It is expected that the introduction of baseline requirements will affect a relatively small number of operators as many will already have implemented sufficient measures to achieve compliance.

The consultation is open until 22 May 2026. Responses are to be submitted online; enquiries for the Cyber Policy team sent to: cyber.policy@energysecurity.gov.uk and enquiries for the Cyber Strategy team sent to: CyberStrategy@ofgem.gov.uk.  

Demand Flexibility Service completes first run under reformed design 

The reformed Demand Flexibility Service (DFS) has completed its first operational period under its reformed zonal design, according to the National Energy System Operator's (NESO's) DFS utilisation portal.

Earlier this year, Ofgem approved the reforms to the DFS which introduced demand turn-up capability for the first time, locational procurement across 12 zones, and a reduced minimum bid size of 0.1MW.

NESO's figures show that it procured 683MW of flexibility from specific local areas in the first ten days under the reformed DFS. Between 14 April and 24 April, NESO accepted 163 flexibility bids coming from eight of the 12 zones. The reformed service is bi-directional, with NESO able to signal requests for bids from consumers to turn up their demand where needed, as well as the usual turn-down signals.

To reach the government's Clean Power 2030 target of 10-12GW of demand-side flexibility, NESO has set a yearly target for its flexibility markets, including a target to procure an additional 750MW of industrial and commercial flexibility by 2030. No equivalent target yet exists within the domestic flexibility market.

This article was written with the assistance of Osborne Clarke trainee solicitors Elise Hill and Maggie Hudson, and solicitor apprentice Jackson Clay.