offshore wind uk
TRANSCRIPT
A common initiative with
Offshore Wind UK
Market Study 2011
Preface
Strong Norwegian competence lies within the offshore sector and stems from more than 100 years of maritime
shipping and North Sea oil and gas activities. The fine-tuned capabilities are now transferred to the offshore wind
sector for technology and services conceptualisation. Companies developing the North Sea wind resources could
benefit from the lessons learned in Norway and add complementary expertise in order to achieve their targets.
In order to inform the Norwegian offshore industry participants about the opportunities in the two most important
markets for offshore wind competence, Innovation Norway and INTPOW – Norwegian Renewable Energy Partners
have collaborated to commission two studies - Offshore Wind Germany and Offshore Wind UK, both inspired by
the two Norwegian Offshore Wind Clusters Arena NOWand Windcluster Mid-Norway.
In order to promote the Norwegian offshore wind capabilities, Norwegian Renewable Energy Partners – INTPOW
and Innovation Norway have also commissioned a market Study and mapping of the emerging Norwegian offshore
wind supply chain.
Innovation Norway
Innovation Norway promotes nationwide industrial development profitable to both the business economy and
Norway‟s national economy, helps to release the potential of different districts and regions by contributing towards
innovation, internationalisation and promotion.
Norwegian Renewable Energy Partners - INTPOW
INTPOW promotes the Norwegian renewable energy industries internationally and facilitates partnerships between
Norwegian and international industry participants, including in offshore wind. It is a non-profit joint venture
between the Norwegian renewable industry and the Norwegian Government.
BVG Associates
Contents iii
Contents
Contents .............................................................................................................................................. iii
List of figures ....................................................................................................................................... iv
List of tables ......................................................................................................................................... iv
Executive summary ............................................................................................................................... 1
Introduction ......................................................................................................................................... 2
1. Market conditions........................................................................................................................ 3
1.1. Political targets ........................................................................................................................... 3
1.2. Installation forecast .................................................................................................................... 3
1.3. Offshore turbines and balance of plant demand .............................................................................. 6
1.4. Installation services demand ........................................................................................................ 8
1.5. Funding ..................................................................................................................................... 9
1.6. Permitting frameworks .............................................................................................................. 10
1.7. Test and demonstration facilities ................................................................................................. 11
1.8. Contracting standards ............................................................................................................... 11
1.9. Market barriers ......................................................................................................................... 12
2. Market structure ....................................................................................................................... 14
2.1. Stakeholder organisations .......................................................................................................... 14
2.2. Offshore wind farm developers and owners .................................................................................. 17
2.3. Offshore transmission owners ..................................................................................................... 18
2.4. Supply chain ............................................................................................................................ 19
2.5. Industry alliances and consolidation ............................................................................................ 24
2.6. Projects and supply chain structure ............................................................................................. 26
2.7. Project details .......................................................................................................................... 29
Endnotes............................................................................................................................................ 37
iv List of figures and tables
List of figures
Figure 1 Forecast annual and cumulative UK offshore installation to 2020. ....................................................... 4
Figure 2 Indicative outlook for UK offshore installation to 2050. ...................................................................... 4
Figure 3 Geographic spread of UK offshore wind farms to 2020. ...................................................................... 5
Figure 4 Forecast UK turbine demand to 2020. ............................................................................................. 6
Figure 5 Forecast UK turbine foundation demand to 2020. ............................................................................. 6
Figure 6 Forecast UK subsea export cable demand to 2020. ........................................................................... 7
Figure 7 Forecast UK subsea array cable demand to 2020. ............................................................................. 7
Figure 8 Forecast UK substation HVAC transformer and HVDC convertor demand to 2020. ................................. 7
Figure 9 Forecast UK turbine and foundation installation vessel demand to 2020. .............................................. 8
Figure 10 Forecast UK subsea cable installation vessel demand to 2020. .......................................................... 8
Figure 11 Potential UK east coast manufacturing cluster locations. .................................................................. 9
Figure 12 Developer share of UK operating offshore wind farms (MW). .......................................................... 17
Figure 13 Developer share of UK offshore wind farms under construction (MW). ............................................. 17
Figure 14 Developer share of UK offshore wind farms in planning (MW). ........................................................ 17
Figure 15 Suppliers of wind turbines to the UK offshore wind market from 2003 to 2011. ................................ 19
Figure 16 Suppliers of turbine foundations to the UK offshore wind market from 2003 to 2011. ........................ 20
Figure 17 Installers of turbines in the UK offshore wind market from 2003 to 2011. ........................................ 20
Figure 18 Installers of foundations in the UK offshore wind market from 2003 to 2011. ................................... 21
Figure 19 Suppliers of export cable to the UK offshore wind market from 2003 to 2011. .................................. 21
Figure 20 Suppliers of array cable to the UK offshore wind market from 2003 to 2011. .................................... 22
Figure 21 Installers of export cable in the UK offshore wind market from 2003 to 2011. .................................. 22
Figure 22 Installers of array cable to the UK offshore wind market from 2003 to 2011. .................................... 23
Figure 23 Suppliers of substation electrical systems to the UK offshore wind market from 2003 to 2011. ........... 23
Figure 24 Breakdown of CAPEX costs for UK offshore wind farms in 2010. ...................................................... 26
Figure 25 EPC supply chain structure. ........................................................................................................ 27
Figure 26 Multi-contract supply chain structure. .......................................................................................... 28
Figure 27 UK offshore wind farm development sites (The Crown Estate, supplied April 2011). .......................... 30
List of tables Table 1 Abbreviations used. ...................................................................................................................... 29
Table 2 UK project description. ................................................................................................................. 31
Executive summary 1
Executive summary
General conditions
As part of its efforts to meet targets under the EU‟s
Climate and Energy package, the UK Government
expects that about 30 per cent of its electricity will
need to be generated from renewable sources by
2020. In the longer term, the UK has also
committed to reducing its greenhouse gas
emissions to 80 per cent below 1990 levels by
2050.
Offshore wind is expected to play a fundamental
role in this shift in energy generation. A total UK
pipeline of more than 50GW of offshore wind
capacity has already been established, along with
structured frameworks for delivery and it is
expected that 20-25GW of offshore wind capacity
will be installed by 2020. This rapid rate of
installation is expected to offer significant
opportunities to the supply chain, with a particular
focus on industrial development in the UK. Such
growth is dependent on some key market barriers
being addressed.
Market mechanism. Current reforms to the UK‟s
renewable market incentive mechanism must
provide the same or improved level of support, as
the economic case for offshore wind farm
development currently is marginal. Changes need
to be introduced in such as way that uncertainty
causes minimal delay.
Planning reform. The Government has introduced
reforms via the Localism Bill that will see the
Infrastructure Planning Commission replaced. Any
changes that are introduced should avoid adding
further delays into the development and consenting
process.
Supply chain investment. Investment in the
offshore wind supply chain is expected to amount
to billions of pounds and the UK‟s pipeline of
offshore wind projects has attracted a number of
the major Tier 1 suppliers to the point of
committing to locate facilities in the UK.
In parallel with this, the supply chain to these
players needs to develop at all levels and especially
at coastal locations. Early signs of this development
are now quite visible but UK suppliers, often seen
by the wind industry as risk averse, will face tough
competition from overseas players who in many
cases have a long track record of delivery to the
wind industry.
It should be noted that, while the UK Government
and other public stakeholder bodies are actively
encouraging interest from overseas companies in
the UK offshore wind market, the intention is to
increase collaboration, joint ventures and UK-
focused inward investment rather than the import
of more goods and services.
Projects
The geographic spread of UK offshore wind activity
up to 2020 is mainly focused on the North Sea with
almost 60 per cent of developments to be installed
off the east coast of the UK.
Approximately 20 per cent of capacity will be
installed in Scottish waters, predominantly in the
east, up to 2020 but, in the longer term, the
development of floating foundations and improved
grid capacity may well allow offshore wind farms to
be developed in areas of deep water and higher
winds close to the Scottish west coast.
The remaining capacity will be installed off the west
and south coasts of England and Wales.
As the decade progresses, projects will be installed
on higher wind sites in deeper waters further from
shore and with larger turbines, creating new
challenges throughout the project lifecycle for wind
farm developers and supply chain.
Due to the increasing size of turbine components,
new manufacturing capacity is expected to be built
near large deepwater port facilities. The focus of
the UK offshore wind market on the North Sea
means that it is expected that clusters of
development will be located on the major estuaries
of the east coast of England and Scotland.
Experience and innovation for the future
The UK‟s pipeline of projects has established a
favourable foundation for future offshore wind
development and the UK now holds significant
experience from developing and installing what will
be heading towards 3GW of offshore wind plants by
the end of this year.
Significant work is underway by the UK
Government and other stakeholder bodies to
2 Introduction
encourage innovation and support the development
of world class research and development facilities.
While the UK supply chain is still comparatively
young, recent years have seen a rapidly rising level
of activity as new manufacturing capacity is
planned and new and dynamic industry alliances
and consortia are formed.
Introduction
The UK currently has the largest pipeline of offshore
wind projects in the world with approximately
50GW of capacity installed, under construction or in
planning. Massive investment will be required by
the supply chain in order to meet the demand that
this will create for turbines, foundations, cables,
electrical systems and installation and O&M
services.
Offshore Wind UK: Market Study 2011 is a report
prepared by BVG Associates for Innovation Norway
and INTPOW to inform potential Norwegian
suppliers about the opportunities and challenges
the UK market presents.
The report introduces the main public and private
stakeholders in offshore wind in the UK and
explains today‟s key market barriers that project
developers face, including the challenges of
sourcing funding and meeting planning
requirements.
It also explores the motivations behind the UK
Government‟s support for offshore wind and its
strong focus on securing UK-based activity and
creating domestic jobs.
Our installation forecast through to 2050 is included
as well as detailed demand breakdowns for key
components and services. These look at both
companies who have already supplied to existing
projects and the expected demand over the next 10
years.
Significant investment decisions are already being
made to locate major offshore wind production
centres in the UK and new entrants need to move
quickly to identify potential partners and customers
to be in a strong position to supply this rapidly
expanding market.
Market conditions 3
1. Market conditions
1.1. Political targets
Renewable energy generation in the UK is still at
relatively low levels compared with much of the
rest of the European Union (EU) and the country is
still heavily dependent on fossil fuels and nuclear
power generation for most of its energy. Work to
change this situation is underway, driven by
challenging renewable energy targets and concerns
about the energy security of supply.
Under the EU‟s Climate and Energy package, the UK
is committed to sourcing 15 per cent of its energy
from renewable sources by 2020.i The UK‟s target
is based on its economic strength and high level of
renewable energy resources.
This target covers heat and transport energy
consumption as well as electricity. Recognising that
it will be difficult to achieve much renewable growth
in heat and transport by 2020, the Government
expects that about 30 per cent of electricity will
need to be generated from renewable sources if it
is to meet its overall target.
The UK has also passed domestic legislation to
unilaterally reduce its greenhouse gas emissions to
80 per cent below 1990 levels by 2050.ii
In its 2009 Renewable Energy Strategy, the
Government said that it expects a range of
renewable technologies to contribute to the future
energy mix but there will naturally be a focus on
those that are both cost effective and can be
deployed on a large scale.
The UK has some of the best onshore and offshore
wind resources in the world. While onshore wind is
expected to account for a significant share of the
renewable energy capacity up to 2020, the stronger
wind resource and reduced planning restrictions
offshore means that it is anticipated that offshore
wind will play a much larger role beyond 2020.
As well as helping to meet legislative targets,
offshore wind improves the country‟s energy
security of supply by decreasing its reliance on
fluctuating fuel prices. It also reduces the UK‟s need
for imported fuels at a time when political instability
and growing world demand may affect supplies.
The Government also seeks to create a domestic
supply chain to support this new sector that could
generate an estimated 70,000 UK jobs by 2020.iii
The value of these jobs could be further enhanced
as they are likely to be clustered around large
industrial areas that are suffering from high levels
of unemployment.
“Offshore wind not only
provides clean, green, secure
energy, the investment that
comes with it is great for the
UK economy too.”
Chris Huhne, UK Secretary of State
for Energy and Climate Change
1.2. Installation forecast
Offshore wind development rounds
The development of offshore wind in the UK has
been facilitated by The Crown Estate, which has
renewable energy development rights on the UK
continental shelf (see Chapter 2 for more
information). To date, it has run three main rounds
of offshore wind development plus others focusing
specifically on projects off the Scottish coast and
demonstration sites. A further round in Northern
Irish waters was announced in March 2011.
Round 1 was announced in 2000 with an original
capacity of 1.5GW across 17 sites and was planned
as a pilot phase in which the industry could build up
an understanding of the technical challenges of
offshore wind. Round 2 was announced in 2003
with a further 15 sites and a planned capacity of
7.2GW. More recently, extensions totalling a further
1.7GW were awarded to developers for existing or
planned sites from Rounds 1 and 2. In 2008, the
Scottish Territorial Waters round saw a further 10
projects announced in Scottish waters with a total
capacity of 6.4GW.
In January 2010, The Crown Estate announced the
names of the development partners for nine Round
3 zones. This round marked a significant increase in
the scale of development with a combined
generation capacity of more than 32GW bringing
the total UK pipeline of projects to 49GW. This is
expected to grow to more than 50GW with the
anticipated Northern Irish leasing round and new
demonstration sites.
4 Market conditions
While The Crown Estate has indicated that no
announcements will be made before 2014, it is
understood a programme of further leases is likely
to follow at some point.
Installation forecast
These rounds represent a significant pipeline but
planning and financial issues have already resulted
in the cancellation of some projects. Furthermore,
the challenges of coordinating the large number of
approvals and procurement contracts required for a
large offshore wind farm means that delays are also
expected to some projects.
The market forecast in Figure 1 was prepared by
BVG Associates for The Crown Estate in February
2011.iv This forecast is based on our understanding
of the status of individual projects, the commercial
environment in which development and supply
chain communities are working and an
understanding of existing and future renewable
targets.
While this report is focused on the UK market, it
should be noted that most of the companies
involved will also be looking to operate in the wider
EU market and will consider this when making
investment decisions.
We anticipate that by 2020 the UK will have an
installed offshore wind capacity of almost 23GW
compared with around 2GW at the end of 2010.
See Figure 1 for a breakdown of this installation
capacity by development round. By 2030, this will
have risen to nearly 70GW.
Figure 1 Forecast annual and cumulative UK
offshore installation to 2020.
By the middle of the next decade, some of the wind
farms installed in Rounds 1 and 2 will be
approaching the end of their operational life. Rather
than completely decommissioning them, many will
be “repowered” (replaced with new technology). We
anticipate repowering of the first generation of
offshore wind farms to include replacement of
foundations, due to the expected increase in
turbine size, while offshore substations and export
cables may be partly re-used.
This results in a difference between the gross
installed capacity and the net generating capacity
shown in Figure 2 up to 2050. Such a long term
prediction is necessarily indicative and is based on
existing trends and an understanding of the likely
contribution of offshore wind to the EU energy mix.
By 2050, we envisage it is possible that a gross
installed capacity of more than 150GW will have
been installed in UK waters with a net generating
capacity of nearly 90GW.
For some of the supply chain, such as component
suppliers, the gross installed capacity is important,
while the net installed capacity is more relevant to
sectors involved in O&M, for example.
Figure 2 Indicative outlook for UK offshore
installation to 2050.
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Market conditions 5
Figure 3 shows that the geographic spread of the
UK offshore wind activity up to 2020 is mainly
focused on the North Sea with almost 60 per cent
of developments to be installed off the east coast of
England.
We forecast that approximately 20 per cent of
capacity will be installed in Scottish waters up to
2020 but, in the longer term, the development of
floating foundations and improved grid capacity
may well allow offshore wind farms to be developed
in areas of deep water and higher winds close to its
west coast.
The remaining capacity will be installed off the west
and south coasts of England and Wales.
Figure 3 Geographic spread of UK offshore wind
farms to 2020.
East coast West coast South coast Scotland
6 Market conditions
1.3. Offshore turbines and balance
of plant demand
Turbines
Offshore wind turbines installed today typically
have a rated power of between 3MW and 5MW. The
reduced cost of energy associated with larger
turbines means that turbine size will increase in the
future. The annual average rated power of installed
turbines is expected to remain similar to current
levels until 2014 and then increase as larger units
are introduced up to an average of approximately
6MW by 2020.
Figure 4 provides a forecast of UK demand for
offshore wind turbines over the next decade. We
expect that more than 4,000 turbines will be
installed in UK waters by 2020, when it is predicted
that approximately 600 turbines will be installed
each year.
Figure 4 Forecast UK turbine demand to 2020.
Turbine foundations
With the exception of the 2007 Beatrice
demonstrator project and the Ormonde wind farm,
which is currently under construction, every UK
project installed to date has used cylindrical
monopile foundations.
As can be seen in Figure 5, as projects are installed
in deeper water with larger turbines, alternative
foundation designs will be required that can handle
the greater loads and decreased wind loading
frequencies.
Demand is naturally related to turbine demand but
is offset because, as is the case today, foundations
are installed a year before turbines.
By 2020, we expect that monopiles will only
account for about 10 per cent of annual foundation
demand, with the remainder including steel
structures such as jackets, tripiles and tripods.
To avoid the environmental noise impact of driving
piles, suction buckets designs have also been
proposed as well as concrete gravity-based designs
which sit on the seabed. Concrete solutions also
mitigate the risk of more volatile steel prices but
the challenge of large scale production and a UK
market preference for proven steel designs mean
they are not expected to account for more than 10
per cent of foundation demand to 2020.
Figure 5 Forecast UK turbine foundation demand to
2020.
Electrical systems
Future offshore wind farms will also tend to be built
considerably further offshore in the next decade,
which will create greater demand for export cables
to connect them to shore. The high transmission
losses of long distance AC cables means that a
significant portion of export cable demand will be
for high voltage direct current (HVDC) systems.
Between 2011 and 2020, almost 7,000km of
subsea export cable will be required, of which more
than 60 per cent is expected to be HVDC. As shown
in Figure 6, demand is expected to stay low until
the middle of the decade when it will increase
sharply. There is concern within the industry that,
without prompt investment in new manufacturing
capacity, there will be shortages in supply by 2015.
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Cumulative monopiles Cumulative other foundations
Market conditions 7
Figure 6 Forecast UK subsea export cable demand to
2020.
There are more manufacturers of medium voltage
subsea array cables used to connect the turbines to
the offshore substations and there are fewer
barriers to new companies entering. As shown in
Figure 7, however, total demand up to 2020 is
expected to be more than 4,000km of cable for the
UK market with a peak annual demand of almost
700km.
Figure 7 Forecast UK subsea array cable demand to
2020.
There will also be significant demand for offshore
and onshore substations and DC converter stations.
As can be seen in Figure 8, up to 20 high voltage
AC transformers and six high voltage DC converters
will be required annually by 2020 for the UK
market. There is currently concern over the supply
of DC converter stations as they are only available
from limited number of suppliers with proprietary
technologies.
The construction of onshore and offshore
substations will also generate considerable demand
for other high voltage electrical equipment such as
reactors and switchgear.
Figure 8 Forecast UK substation HVAC transformer
and HVDC convertor demand to 2020.
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Cumulative HVAC export cable Cumulative HVDC export cable
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8 Market conditions
1.4. Installation services demand
Turbine and foundation installation
vessels
The offshore wind industry needs vessels with large
amounts of deck space, high transit speeds and
cranes with hook heights of approximately 100m.
This means that, while construction vessels from
the oil and gas industry have been used in the past,
there are significant advantages in using purpose-
built ships.
Currently, the industry has a relatively small fleet
of specialist vessels but, while there have been
concerns about a lack of investment, there now
appears to be a strong pipeline of turbine and
foundation installation vessels under construction.
As can be seen in Figure 9, by 2020 we estimate
that up to eight turbine installation vessels will be
required to serve the UK market plus a similar
number of foundation installation vessels.
Furthermore, the expected growth in the size of
turbines and foundations and the requirement to
operate further from shore in water depths of up to
50m means the vessels themselves will need to
conform to more demanding specifications.
By the end of the decade, most projects will require
vessels capable of working in water depths of more
than 50m with a crane capacity of more than 750
tonnes.
Figure 9 Forecast UK turbine and foundation
installation vessel demand to 2020.
Cable installation vessels
The UK market is expected to require up to 10
cable installation vessels by 2020, of which at least
two must be suitable for export cable installation.
A key challenge for the offshore wind industry is a
lack of export cable installation vessels with cable
carousels large enough to be able to carry the
length of cable required to connect wind farms
located more than 100km offshore. Combined with
high levels of competition from the interconnector
market, this area of activity is considered a
potential bottleneck for development.
Array cable installation has proved technically
challenging with problems reported on most
projects. Many of these stem from pulling the cable
through the turbine transition piece or damage
during or after laying.
Figure 10 Forecast UK subsea cable installation
vessel demand to 2020.
Ports
To date, the UK has seen a growing level of port
activity but has faced strong competition from the
Continent.
Future construction port facilities are expected to
have a storage area of at least 12 hectares to allow
for the laying out of turbine blades, towers and
turbines in preparation for final delivery. In terms
of quayside, ports will need at least 300m with
access for vessels up to 140m long and 45m wide
with 8m draft. Such a facility is expected to be able
to handle up to 500MW of installation traffic per
year.
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Market conditions 9
There is also an incentive for developers to use
ports as close to the wind farm site as possible.
This minimises the steaming time for a jack-up,
which reduces weather risk and therefore increases
turbine installation rates.
Discussion with the industry suggests that
developers would prefer construction ports less
than 12 hours steaming time from site (250km at
12 knots) and are unlikely to consider installing
large projects from a port that is more than 24
hours steaming time (500km at 12 knots) from the
wind farm.
It is forecast that the UK market will require up to
seven port facilities equivalent to that described
above. In reality, it is more likely that the majority
of activity will take place through a smaller number
of large clusters able to handle 1GW or more per
year.
Due to the focus of the European offshore wind
market on the North Sea, it is expected that such
clusters would be located on the major estuaries of
the east coast of England and Scotland. See Figure
11 for locations of likely key locations.
Figure 11 Potential UK east coast manufacturing
cluster locations.
1.5. Funding
Project funding
It is estimated that the UK‟s offshore wind
development will require more than £70 billion in
investment by 2020.
To date, most of the UK‟s operating offshore wind
farms have been funded from the balance sheet of
asset owners without recourse to project finance.
This investment has usually been provided by large
power utilities but a number of investors have also
bought shares in projects.
Over the next 10 years, balance sheet funding is
expected to account for around half of the capital
investment required with the partial-sale of
completed wind farms expected to be an important
vehicle for raising capital for new projects.
Although no UK wind farms have been project-
financed yet, the scale of Round 3 means that
banks will almost certainly need to become involved
at an early stage. Interest from the financial
community is expected to grow as new ways of
reducing risks are developed.
As a further means of encouraging investment, the
Government has said it will establish a Green
Investment Bank in 2012 with a £3 billion reserve,
some of which may be used to unlock private
investment by filling potential funding gaps caused
by overstretched utility balance sheets or
underwriting risk to reduce the cost of capital.
Supply chain funding
As well as the investment that is required in
offshore wind farm hardware, significant
investment in new capacity is also required by the
supply chain. This includes funding for the research
and development required to bring products to
market and investment in manufacturing
infrastructure and facilities.
The majority of this cost will be privately funded
but public funding has also been made available.
It is forecast that approximately £2 billion will need
to be invested in UK infrastructure by 2020 to
support the expected levels of activity.
In 2010, the Government advised that it would
provide up to £60 million to support the
- Tyne
- Medway
- Tees
- Forth
- Humber
- Tay
10 Market conditions
development of large scale offshore wind
manufacturing facilities at port sites in England.
A further £70 million was also announced by the
devolved Scottish Government with similar
objectives.
“We are making these
investments so that major
manufacturers will decide
that this is the place they
want to come and build their
offshore wind turbines.”
David Cameron, Prime Minister
On a regional level, support for individual
companies has been delivered through the English
Regional Development Agencies. Although some will
be abolished by the current Government in 2011,
this support is likely to continue in some form
through local economic partnerships (LEPs) which
are being introduced in their place.
Enterprise zones are also expected to be
established in the Tyne and Tees areas to
encourage offshore wind manufacturing activity by
offering business tax relief for up to five years.
1.6. Permitting frameworks
Planning authorities
Since 2010, offshore wind projects with a capacity
of more than 100MW have been subject to the
Infrastructure Planning Commission (IPC) for
consent. The IPC was set up by the previous
Government as an independent body to streamline
the planning process and reduce uncertainty about
timescales for obtaining a decision.
The IPC process is broken down into five stages:
- Pre-application consultation
- Application
- Acceptance of the application by the IPC
- Examination of the application, and
- Decision.
According to the IPC, it should take a year to make
a decision from accepting an application.
The new Government has stated that it intends to
replace the IPC in 2012 with the Major
Infrastructure Planning Unit (MIPU). It is intended
that this will maintain the IPC‟s timescales and
processes but the final decision on whether to grant
consent will be taken by the Secretary of State to
provide democratic accountability.
Consultees
The IPC process has introduced a framework
through which a range of public and private bodies
are consulted on the plans of developers. This
framework has been established to ensure that all
the relevant stakeholder submit their views within
an established timeframe.
Statutory consultees which must be consulted for
offshore wind projects include: the Environment
Agency; Natural England; English Heritage; the
Ministry of Defence; OFCOM (the
telecommunications regulatory body); the Civil
Aviation Authority; the Marine Management
Organisation; and local authorities.
Non-statutory consultees are invited to participate
in the consultation process as well and include local
businesses and residents as well as trade
associations and special interest groups. Examples
relevant for offshore wind include the Chambers of
Commerce, the Chamber of Shipping, the National
Federation of Fishermen‟s Organisations, Trinity
House and the Royal Yachting Association.
An ongoing concern about the planning process is
the possible delays caused by the need for
statutory and non-statutory consultees to feed into
applications in a timely manner. Due to the current
economic climate and government cuts, many of
these bodies have limited resources and may
struggle to handle the rapidly increasing pipeline of
offshore wind projects.
A further challenge for developers is that the IPC
process requires them to have greater certainty
over the cumulative impact of their projects at an
earlier stage than previously demanded. The need
to define the “maximum potential adverse effect” of
a project could limit a developer‟s ability to
optimise the design of offshore wind farm once
consent has been granted because it may need to
definitively establish its turbine and infrastructure
choices and not be able to benefit from subsequent
technology developments.
Market conditions 11
1.7. Test and demonstration
facilities
The UK already has strong research and
development (R&D) capability in a number of
sectors relevant to the offshore wind industry
including aerospace, environmental analysis,
composites and some aspects of drive train
development.
In recent years, increasing levels of R&D activity
focussed specifically on offshore wind has
developed across the country‟s universities,
research and technology organisations and private
companies.
Funding
Offshore wind R&D funding has been made
available in the UK from a number of sources. To
date, funding sources have included the
Department of Energy and Climate Change (DECC)
(£30 million), the Carbon Trust‟s Offshore Wind
Accelerator (£50 million) and the Energy
Technologies Institute (ETI) (£15 million).
University research into offshore wind is generally
funded by the Engineering and Physical Science
Research Council (EPSRC).
Facilities
Doctoral training centres. There are a number of
universities with offshore wind-related centres of
excellence supported by EPSRC. Centres of
relevance to the offshore wind industry include:
Wind Energy Systems (University of Strathclyde);
E-Futures (University of Sheffield); Technology for
Low Carbon Futures (University of Leeds); and the
Advanced Composite Centre for Innovation and
Science (University of Bristol). A renewable energy
doctoral training centre is currently being planned.
Research and technology organisations. There
are a number of relevant open access R&D facilities
in the UK that provide both expertise and facilities
that are relevant to offshore wind. Two notable
examples are TWI, which provides a range of
services including reliability and asset management
and Narec, which houses the UK‟s only open access
full scale blade and drive train test facilities.
Changes in the UK R&D landscape
The UK R&D landscape is currently undergoing
significant changes. In 2010, the UK government
announced a new strategy to maximise the
commercial impact of UK R&D and launched the
Technology Innovation Centres (TICs). These will
be a network of “elite” centres with different
specialities. Each TIC may consist of several
centres, with an overarching management
organisation.
The centres will have open access R&D facilities for
testing and prototyping and will be primarily run by
industry. Six centres have been announced and the
first that will be developed is the High Value
Manufacturing TIC. Others that may be relevant to
the wind industry are the Energy and Resource
Efficiency TIC and the Electronics, Photonics and
Electrical Systems TIC.
The intention is that much of the near to market
R&D in the UK will focus around these TICs with the
university network providing underpinning
research.
1.8. Contracting standards
The process of awarding major contracts in the
offshore wind industry generally utilises a
competitive tendering process in which bidders are
subject to a rigorous evaluation of submissions
against specific weighted criteria.
Standard requirements of purchasing organisations
cover a company‟s health, safety and
environmental performance, experience, local
knowledge and financial standing.
Suppliers will be expected to be aware of, and be
able to comply with, the relevant provisions of:
UK health and safety legislation such as
Construction (Design & Management)
Regulations 2007, Health & Safety at Work
Act 1974 and Management of Health and
Safety at Work Regulations 1999
Appropriate compliance with design
standards and methods of construction such
as relevant marine environment DNV, BS
and IEC codes, and
12 Market conditions
Management systems such as BS EN ISO
9001, 14001 and 18001 for quality,
environmental and health and safety
methodologies respectively.
1.9. Market barriers
The development of the offshore wind rounds by
The Crown Estate means that the UK offshore wind
market currently has the largest defined pipeline of
projects in the world. Market barriers still exist,
however, that could hamper progress.
Market Mechanism. The UK‟s main market
incentive to develop renewable electricity
generation is currently the Renewables Obligation
(RO). This places an obligation on retailers of
electricity to obtain an annually increasing
proportion of their electricity from renewable
sources. Under its planned Electricity Market
Reform, the Government has said it intends to
replace the RO with a feed-in tariff (FIT) which is a
fixed revenue that a wind farm owner receives for
the energy it sells. It is currently consulting on
whether to adopt a “contract for difference” or
“premium” FIT. More information about the existing
and planned market support mechanisms can be
found in DECC‟s electricity market reform
consultation document published in December
2010.v
There have been concerns raised about the impact
that the proposed change could have on the UK‟s
market. Unless the new regime provides the same
or improved level of incentive and risk for
developers, there is risk that projects will not
proceed.
This market reform is being undertaken with the
aim of reducing electricity price risk but the
uncertainty caused by replacing the existing
scheme may also cause delays as developers
postpone making investment decisions until the
impact of the reform is clear.
Planning Reform. As discussed above, the
Government has introduced reforms via the
Localism Bill that will see the IPC replaced.
Planning issues have already had an impact on the
wind industry by causing significant delays for
onshore and offshore projects. The uncertainty
caused by the planning system has been blamed for
restricting the UK‟s onshore wind market both in
terms of the difficulty of obtaining permission for
projects themselves, and for the necessary
associated reinforcement of the electricity
transmission network.
A key justification for forming the IPC was to
ensure that the major projects required to meet the
UK‟s renewable targets were not unreasonably
delayed.
While the Government has confirmed that the
replacement for the IPC will maintain the same
timescales, any changes that introduce further
delay into the consenting processes are expected to
discourage investment.
Supply chain investment. As discussed above,
the investment required for the development and
construction of the UK‟s offshore wind farms is
considerable. Investment in the supply chain is
comparatively smaller but is still expected to
amount to billions of pounds and is required to
achieve the cost improvements that will be required
to sustain long term activity.
The UK‟s pipeline of offshore wind projects has
attracted a number of the major Tier 1 suppliers to
a point of committing to locate facilities in the UK.
To support this development, investment will be
required by the UK supply chain.
UK companies have often been seen by the wind
industry as risk averse to investing in new facilities.
One reason for this is a lack of confidence in the
long term nature of the market due to the relative
lack of UK onshore activity compared with the
Continent, where there have been long periods of
year on year growth.
There are a number of reasons why it is in the
interest of both the offshore wind industry and the
UK government to support supply chain
development:
Growing a focussed supply chain for large
components in and around the ports closest
to offshore wind farms offers significant
logistics savings.
There is a large amount of relevant
experience available from North Sea
operators in the UK‟s oil and gas sector.
Market conditions 13
As revenue from developers‟ UK wind farms
will be in pounds, the fact that they can buy
goods and services in the same currency
means they can protect themselves from
exchange rate fluctuations.
The industry is expected to generate
significant levels of employment and tax
revenue.
As well as serving the UK market,
companies setting up facilities will also have
significant export opportunities.
Supply chain events run by The Crown Estate
have sought to educate companies about the
opportunities offered by the industry as well as
introducing suppliers to potential customers.
It should be noted that, while stakeholders are
actively encouraging interest from overseas
companies in the UK offshore wind market, the
intention is to increase UK-focused inward
investment rather than importing more goods
and services. Indeed, the UK is unlikely to be
satisfied with continued high levels of overseas
content in domestic projects.
14 Market structure
2. Market structure
An increasing number of companies from a range of
sectors are already involved in the UK‟s offshore
wind market, ranging from multinational
conglomerates to small component manufacturers.
Behind the scenes, various Government and non-
governmental organisations are also working to
develop the structure and frameworks that will
support the industry.
This section identifies the key stakeholder
organisations and industrial players and provides a
summary of the current market structure in each of
the main sectors.
2.1. Stakeholder organisations
The Crown Estate
The Crown Estate is a private organisation that
administers a large property and land estate and
pays its profits to the Treasury. Its portfolio covers
urban property, the Windsor Estate, large rural
holdings and its Marine Estate.
The Marine Estate covers most of the seabed out to
the UK‟s 12 nautical mile territorial limit and
includes the rights to explore and utilise the natural
resources of the UK continental shelf (not including
oil, gas and coal). The Energy Act 2004 also gives
The Crown Estate the right to license the
generation of renewable energy within the
Renewable Energy Zone out to 200 nautical miles.
As discussed in Chapter 1, The Crown Estate has
sought to exploit these offshore wind assets
through a series of leasing rounds with a potential
total capacity of more than 50GW. Revenue is
generated by The Crown Estate by charging
developers a seabed lease that is based on the
amount of revenue generated by the offshore wind
farms.
To assist with the rapid development of Round 3,
The Crown Estate is co-investing with developers
up to half of the cost of obtaining planning
consents. It also seeks to address issues common
to all projects such as seabed archaeology and
works with key stakeholders such as the fishing
industry, the oil and gas industries and wildlife
groups.
The UK Government
Department of Energy and Climate Change.
Until 2008, mitigating the impact of climate change
had been the responsibility of the Department for
Environment, Food and Rural Affairs (DEFRA) while
energy policy was owned by the Department for
Business, Enterprise and Regulatory Reform
(BERR). The need to ensure these two policy areas
were aligned meant that in 2008 these two
functions were merged to form DECC.
The remit for DECC extends to Scotland, Wales and
Northern Ireland but not to the Isle of Man and the
Channel Islands. Its main policy direction under the
previous Labour Government was set out in the
2009 Renewable Energy Strategy which describes
how the UK intends to meet its binding EU
renewable energy target described in Chapter 1.vi
The current coalition Government has largely
adopted these ambitions in its 2010 UK Renewable
Energy Action Plan.vii
DECC has sought to stimulate UK offshore wind
supply chain activity and draw inward investment to
the UK through grants to both wind turbine
manufacturers and suppliers. DECC also sets the
policy on market support mechanisms and is the
host department for the Office of the Gas and
Electricity Markets (Ofgem) (see below).
Department for Business, Innovation and
Skills. BIS is responsible for business support and
regulation as well as research and higher and
further education. Its jurisdiction is mostly
restricted to England although its research funding
covers the whole of the UK, as does its promotion
of overseas trade.
BIS sets the UK‟s low carbon economy policy, in
close dialogue with DECC. It is overseeing the
allocation of the £60 million fund for offshore wind
port infrastructure announced in the Government‟s
2010 Spending Review.
BIS delivers most of its impact through associated
public bodies. It is the host department for UK
Trade and Investment (UKTI) which promotes
overseas trade and inward investment through the
UK‟s worldwide network of embassies and
consulates. BIS also oversees regional economic
Market structure 15
development and inward investment which is
mostly delivered through the Regional Development
Agencies (RDAs) and the devolved administrations
(see below).
The RDAs have also delivered business support
programmes and a number have treated offshore
wind as a major strategic priority. As such, they
have been important players in educating
companies about the opportunities offered by
offshore wind and providing support to businesses.
The Coalition Government is abolishing the English
RDAs in 2011 but it is anticipated that BIS will
continue to provide business support funding
through a network of „local enterprise partnerships‟
(LEPs) that will replace some the functions of RDAs.
Devolved government
Northern Ireland, Scotland and Wales have elected
administrations with devolved powers from central
government. The power of each body is defined by
a separate piece of legislation and the scope of
their responsibilities varies. Energy policy has
typically been retained by central government while
economic development and planning has been
devolved. In practice, the separation of energy
policy is not clear cut as the Scottish Government
has been able to stop new nuclear power stations
being built despite the decision nominally falling to
central government.
The Scottish and Northern Ireland governments
have also set up public bodies, including Scottish
Development International and Invest Northern
Ireland, to supplement the work of UKTI.
Regulators and consenting bodies
Infrastructure Planning Commission. The IPC
was established in 2009 to streamline the planning
system for nationally significant infrastructure
projects and overcome the lengthy planning
process that has affected a number of high profile
projects.
In England, it examines applications from the
energy, transport, waste water and waste sectors
while, in Wales, it examines applications for energy
and harbour developments. The current coalition
Government has stated that it will abolish the IPC,
leaving the final decision with the Secretary of
State. The process will be retained within a Major
Infrastructure Unit in the Department for
Communities and Local Government.
Office of the Gas and Electricity Markets.
Ofgem regulates the energy market across
England, Scotland and Wales. Its primary role is to
protect electricity and gas consumers by
maintaining healthy competition between providers
but it is also required to take account of the
environmental impact of the energy generated.
Ofgem administers the RO but it does not set the
level of support which is the responsibility of its
parent department, DECC.
Ofgem‟s role incorporates the regulation of the
offshore transmission network. So far, offshore
wind farm developers have built and owned the grid
connection but EU law means that the generating
assets and transmission network must now be
under separate ownership. Ofgem is currently
overseeing the transition of existing grid connection
assets to independent offshore transmission
operators (OFTOs) to comply with this requirement.
Ofgem had initially proposed that future grid
connections would be built by the OFTOs but this
raised concerns among developers that the
connection may not be ready in time. It is now
more likely that developers will build the connection
but then transfer the asset to an OFTO once the
project is completed.
Electricity transmission
The UK onshore high voltage transmission grid is
operated by National Grid in England and Wales,
Scottish Power and Scottish and Southern Energy
(SSE) in Scotland and Northern Ireland Electricity in
Northern Ireland. National Grid transmission is
typically at 275kV or higher while the Scottish and
Northern Irish grids are at 132kV and 33kV
respectively.
National Grid is also the National Electricity
Transmission System Operator (NETSO) for
England, Scotland and Wales, so is responsible for
overseeing and managing the flow of electricity
across the whole of the transmission network. This
includes the elements owned and operated by
Scottish Power and Scottish and Southern Energy.
Connections for new generators such as offshore
wind farms are also co-ordinated by National Grid.
16 Market structure
Acting in its role as NETSO, National Grid publishes
an annual Offshore Development Information
Statement, which aims to help the development of
a coordinated and economical offshore electricity
transmission system.viii
Scottish Power, SSE and National Grid all also have
interests in the development of offshore wind
projects beyond their transmission remits.
As power generators, Scottish Power and SSE both
have significant portfolios of developments while
National Grid has been awarded preferred bidder
status by Ofgem to become an offshore
transmission operator (OFTO).
Trade bodies
RenewableUK. RenewableUK, formerly the British
Wind Energy Association, is the primary trade body
for the offshore wind industry. Its membership
extends to companies involved in wave and tidal
energy and onshore wind but its activities do not
currently include other forms of renewable energy
generation. Key activities include national
conferences, political lobbying, and policy
development on issues such as skills, and health
and safety.
Renewable Energy Association. REA is a more
broadly based trade association than RenewableUK,
with membership covering solar and biofuels as well
as wind and wave and tidal. While there is some
overlap with RenewableUK‟s membership, the REA
is generally not seen to represent the UK offshore
wind sector.
NOF Energy. NOF energy is a membership-based
business development organisation. Its focus has
traditionally been on oil and gas but it has
recognised the synergies that could be achieved
with offshore wind and has extended its activities
accordingly. These include networking and events,
international business support, industry intelligence
and consultancy services.
Market structure 17
2.2. Offshore wind farm
developers and owners
The scale of investment required in offshore wind
means that many developers of UK projects are
large companies with interests in a number of
European countries. They fall into three categories:
Large energy companies such as Centrica,
SSE, RWE and Statoil
Financial backers, such as Masdar, Siemens
Project Ventures and Stadtwerke München,
and
Independent developers, such as Warwick
Energy and Mainstream Renewable Power.
Most projects are likely to change hands at least
partially either before or after construction. In
many cases the new owners have existing offshore
wind assets and their acquisitions enable them to
broaden their portfolio of assets.
Developer share of operating projects and those
under construction or in development are shown in
the figures below. As of March 2011, about 45GW is
in development, 1.7GW under construction and
1.3GW operating.
Figure 12 Developer share of UK operating offshore
wind farms (MW).
Figure 13 Developer share of UK offshore wind
farms under construction (MW).
Figure 14 Developer share of UK offshore wind
farms in planning (MW).
Vattenfall,
390
DONG
Energy, 308
E.ON Climate
&
Renewables,
244
RWE npower
renewables,
150
Centrica
Energy, 142
Other, 107
DONG
Energy, 520
SSE
Renewables,
298
RWE npower
renewables,
252E.ON Climate
&
Renewables,
189
Statkraft,
158
Statoil, 158
Vattenfall,
150
Centrica
Energy, 135
Masdar,
126
Siemens
Project
Ventures, 68
SSE
Renewables,
5628
RWE npower
renewables,
5548
Centrica
Energy, 5340
Scottish
Power
Renewables,
5267Vattenfall,
3737Mainstream
Renewable
Power, 2360
Statkraft,
2250
Statoil, 2250
Siemens
Project
Ventures,
2058
DONG
Energy, 1994
Fluor, 1700
SeaEnergy
Renewables,
1460
E.ON Climate
&
Renewables,
1310
Other, 3201
18 Market structure
2.3. Offshore transmission owners
In order to comply with European legislation, the
UK has introduced a system that separates the
ownership of the generating assets from the
ownership of the offshore grid connection. Offshore
wind farms that do not have an offshore substation
are excluded from the process.
Only companies identified through a tendering
process run by Ofgem in 2010 are qualified to act
as OFTOs. These are:
Balfour Beatty Capital
DONG Energy Sales and Distribution
(subsequently withdrew)
Green Energy Transmission (a consortium of
Equitix and AMP Capital Investors)
Macquarie Capital Group (a consortium
including Macquarie Capital Group, Barclays
Private Equity and NIBC Infrastructure
Partners)
National Grid Offshore, and
Transmission Capital Partners (a consortium of
Transmission Capital International Public
Partnerships and Amber Infrastructure Group).
The tendering process for maintaining each
connection to offshore wind farms that are
operating or under construction is currently
underway. The first contract was awarded in early
2011 to Transmission Capital Partners for the Robin
Rigg wind farm.
It is anticipated that further awards for Gunfleet
Sands, Sheringham Shoal, Thanet, Walney and
Ormonde will be made during 2011 while the
tender for the Greater Gabbard project is to be re-
run. The tendering processes for the London Array
and Lincs projects, which began offshore
construction in 2011, have not started.
An OFTO is paid a fixed fee based on its bid for the
transmission line by National Grid, which recovers
the cost through transmission charges paid by the
generator.
Market structure 19
2.4. Supply chain
This section outlines the supply of key components
and services to UK projects between 2003 and
2011. Construction of a wind farm usually runs over
several years and generation by some turbines
often begins before a wind farm is completed. Here,
projects have been assigned to calendar years as
presented in data published by the European Wind
Energy Association.ix
Data has been included for the Walney 1, Ormonde,
Sheringham Shoal and Greater Gabbard projects on
the assumption that they will be completed by the
end of 2011.
Wind turbines
The UK offshore wind turbine market to date has
been dominated by Vestas and Siemens who have
supplied all completed projects apart from two
turbines by REpower on the Beatrice demonstrator
project and the Ormonde wind farm which is
currently under construction. See Figure 15 for a
breakdown of turbine supply to the UK market by
company since 2003. The dominance of Siemens
and Vestas is unlikely to change significantly in the
short term as they are already earmarked or
contracted for many of the projects planned up to
the start of Round 3.
This lack of competition in the market has been a
challenge for the industry but REpower are
expected to gradually increase their market share
and Areva and Bard are now establishing a track
record on the Continent.
Looking beyond 2015, about 30 companies are
known to have offshore turbine designs at various
stages of development with the majority targeting
the European market. The fact that future offshore
projects are unlikely to be smaller than 300MW,
however, will limit the ability of players to capture
small market shares and this means that the
European offshore wind industry is unlikely to
support more than ten wind turbine suppliers.
Figure 15 Suppliers of wind turbines to the UK
offshore wind market from 2003 to 2011.
Turbine foundations
With the exception of the Beatrice demonstrator
project and the Ormonde wind farm currently in
construction, all completed UK projects have used
monopile foundations and the large majority of
these have been supplied by the Belgian joint
venture between SIF and Smulders.
The Scottish-based companies Cambrian
Engineering and Isleburn jointly delivered the
foundations for Scroby Sands in 2003 but have not
delivered any since. More recently, a consortium of
Erndtebrücker Eisenwerk (EEW) and Bladt
Industries were contracted to build the foundations
for the Walney 1 project and they also won the
contract for the 175 foundations for the first phase
of London Array. The monopiles for the Greater
Gabbard wind farm were produced by Chinese
manufacturer Shanghai Zhenhua Heavy Industry
(formerly ZPMC).
In the UK, north east-based company Tees Alliance
Group (TAG) has invested approximately £20
million in a production facility which is expected to
start operations in 2011 and other players have
signalled intent to enter the market.
0
200
400
600
800
1,000
1,200
1,400
03 04 05 06 07 08 09 10 11
REpower Siemens Vestas
An
nu
alin
stal
led
cap
acit
y (M
W)
20 Market structure
The Beatrice demonstrator project used jacket
foundations that were manufactured by Burntisland
Fabrications (BiFab) which has also supplied the
jacket foundations used on the Ormonde and
German Alpha Ventus projects. See Figure 16 for a
breakdown of foundation supply to the UK market
by company since 2003.
Figure 16 Suppliers of turbine foundations to the UK
offshore wind market from 2003 to 2011.
Turbine installation
The leading turbine installation companies to date
have been A2SEA and MPI Offshore. While a
number of other companies have been active, few
have built up an extensive track record.
Deriving market shares is problematic since in
many projects, more than one supplier has been
used. This has been done to accelerate installation
or because project schedules have slipped and
vessels have needed to be mobilised for other
projects. In Figure 17, the challenge of establishing
the contribution of different suppliers in delivering a
given project has been addressed by dividing the
installed capacity equally between those players
active on the project.
There are also differences in the way vessels are
contracted. The vessel operator may be contracted
directly by the wind farm developer or via a third
party. Figure 17 shows the share of the charter
market rather than the share of installation
contracts. For 2011, we assume that the vessels
earmarked for use will complete each project.
Many of the vessels have been used in other
sectors such as oil and gas and been modified to
suit offshore wind. In future, it is expected that
turbine installation will largely be undertaken by
specialist wind farm installation vessels. There are
about 15 installation vessels currently in
construction. In a number of cases, these have
been commissioned by new players to the
installation market, for example, Master Marine,
Beluga Hochtief and Swire Blue Ocean.
Figure 17 Installers of turbines in the UK offshore
wind market from 2003 to 2011.
Foundation installation
Many of the issues seen in the turbine installation
market also apply to the foundation installation
market. A further complication is that foundation
installation may require more than one vessel and
often from different suppliers. In Figure 18, we
consider the main installation vessel used.
A2SEA and MPI Offshore have had a significant
share of the market. They are joined by several
operators of heavy lift vessels, notably Ballast
Nedam, and its heavy lift crane Svanen, and
Scaldis, and their sheer leg crane Rambiz. Such
vessels have also been used for offshore substation
installation.
0
200
400
600
800
1,000
1,200
1,400
03 04 05 06 07 08 09 10 11
BiFab Camcal/Isleburn
Erndtebrücker Eisenwerk/Bladt SIF/Smulders
Shanghai Zhenhua Heavy Industry
An
nu
alin
stal
led
cap
acit
y (M
W)
0
200
400
600
800
1000
1200
1400
03 04 05 06 07 08 09 10 11
A2SEA Gulf Marine KS Energy MPI Offshore
Seacore Seajacks Scaldis SMIT
Annual
inst
alle
d c
apac
ity
(MW
)
Market structure 21
Figure 18 Installers of foundations in the UK
offshore wind market from 2003 to 2011.
Subsea export cable
Apart from a few early projects that were close to
shore, most UK offshore wind farm projects have
incorporated offshore substations. The primary
function of the offshore substation is to step up the
medium voltage of electricity generated by the
turbines (typically 33kV) to high voltage (typically
132kV) in order to minimise transmission losses.
The substation also includes protective switches
(circuit breakers) to allow faults in array cables
from the turbines to be isolated. There is a trend
towards fitting two or more transformers and
related switchgear which allows the wind farm to
continue to operate, albeit at reduced capacity, in
the event of a fault in one of the two independent
export cables from the offshore to onshore
substation. All projects in the UK to date have used
AC transmission systems. DC transmission systems
for wind farm export will be employed when the
distance to the onshore connection point exceeds
about 100 kilometres.
The availability of high voltage AC export cable is a
significant concern for the industry because of the
restricted number of companies able to supply the
market. Currently only Prysmian and Nexans have
a track record in supplying high voltage export
cable to UK projects. ABB has supplied projects
elsewhere in Europe and nkt cables and General
Cable have recently entered the high voltage
subsea cable market. The UK-based supplier JDR
Cables Systems is also establishing capability to
enter the high voltage subsea cable market.
The issue of cable supply is of equal concern for
projects requiring HVDC cable. HVDC cable suffers
lower transmission losses and projects more than
approximately 80km from shore are likely to use
DC systems. HVDC cables will not be required for
UK projects before 2015 but investment will need
to be in the near term due to the long lead times
for the testing and certification for new cable
products and manufacturing lines.
Early wind farms that do not have substations have
a medium voltage grid connection. The market
shares shown in Figure 19 only include projects
using high voltage export cable.
Figure 19 Suppliers of export cable to the UK
offshore wind market from 2003 to 2011.
Subsea array cables
There are more manufacturers producing 32kV
array cables used to collect power from the turbines
than export cable. So far, seven companies have
supplied UK projects and, while AEI Cables no
longer manufactures 32kV subsea cable, there are
a number of potential new entrants to the UK
market, including LS Cable and General
Cable/NSW.
0
200
400
600
800
1000
1200
1400
03 04 05 06 07 08 09 10 11
A2SEA Ballast Nedam
MPI Offshore Scaldis
Seaway Heavy Lifting SMIT
Annual
inst
alle
d c
apac
ity
(MW
)
0
200
400
600
800
1,000
1,200
1,400
03 04 05 06 07 08 09 10 11
Nexans Prysmian
An
nu
alin
sta
lled
cap
acit
y (M
W)
22 Market structure
Figure 20 Suppliers of array cable to the UK offshore
wind market from 2003 to 2011.
Subsea cable installation
Cable installation has been a problematic area for
the offshore wind industry. It has been the biggest
source of insurance claims to date and few projects
have been completed without the need for repairs.
Of the companies supplying the UK market, CNS
Subsea, Oceanteam, Submarine Cable and Pipe
and, most recently, Subocean have all had financial
difficulties and have either withdrawn from the
market or been acquired by larger players.
Export cables. Export cable installation has typically
been undertaken by shallow draft barges that are
manoeuvred by tugs and which can beach in
shallow water between tides. These vessels will not
be suitable for projects further offshore and it is
anticipated that, from 2015, most export cables will
be laid by DP2 vessels with carousels capable of
handling up to 100km of cable.
There are very few of these vessels globally and
they been employed primarily for the power
interconnector market. Investment in new-build or
modified vessels will be needed but there are
encouraging signs that demand will be met.
Significant new entrants to the market are likely to
include Beluga and P&O Maritime Services in
partnership with Offshore Marine Management.
Figure 21 Installers of export cable in the UK
offshore wind market from 2003 to 2011.
Array cable. Array cable installation has proved
technically demanding with the need to move
vessels close to the turbine foundations and pull the
cable through the J-tubes. Again, barges have been
used but there is an increasing use of smaller DP2
vessels. There have also been concerns on the part
of cable installers that foundation design has not
adequately recognised the challenges of cable-
installation.
The risks and difficulties associated with cable-
laying may be a cause for the large number of
players in the array cable installation market shown
in Figure 22. Only Subocean has had a sustained
presence in the market but it went into
administration in early 2011 and has been acquired
by Technip.
0
200
400
600
800
1,000
1,200
1,400
03 04 05 06 07 08 09 10 11
ABB AEI Cables JDR Cable
Nexans NKT Parker Scanrope
Prysmian
Annual
inst
alle
d c
apac
ity
(MW
)
0
200
400
600
800
1,000
1,200
1,400
03 04 05 06 07 08 09 10 11
MPI Offshore Oceanteam Subocean Visser & Smit
Annual
inst
alle
d c
apac
ity
(MW
)
Market structure 23
Figure 22 Installers of array cable to the UK
offshore wind market from 2003 to 2011.
Offshore substations
To date, most UK projects have only required a
single substation but it is anticipated that future
projects will use multiple substations if the
expected energy output is more than approximately
500MW.
Only ABB, Alstom (which acquired Areva
Transmission and Distribution in 2010) and
Siemens Transmission and Distribution have the
capability to supply high voltage transformers,
reactors and switchgear, although there are other
companies that can supply individual components.
For most UK projects, developers have sought to
tender a single topside substation contract and this
has typically been awarded to one of the electrical
suppliers listed above, who then subcontract the
fabrication of the offshore topside.
An alternative strategy is to contract the fabricator,
who subcontracts the electrical supply. As an
example, this strategy was adopted for Gunfleet
Sands where Bladt procured ABB electrical
components. The market share shown in Figure 23
shows the share of substation electrical supply.
Figure 23 Suppliers of substation electrical systems
to the UK offshore wind market from 2003 to 2011.
0
200
400
600
800
1,000
1,200
1,400
03 04 05 06 07 08 09 10 11
CNS Subsea CTC Marine
CT Offshore Global Marine Systems
MPI Offshore Submarine Cable & Pipe
Subocean Visser & Smit
Annual
inst
alle
d c
apac
ity
(MW
)
0
200
400
600
800
1,000
1,200
1,400
03 04 05 06 07 08 09 10 11
ABB Alstom/Areva Siemens
Annual
inst
alle
d c
apac
ity
(MW
)
24 Market structure
2.5. Industry alliances and
consolidation
As the size of UK and Continental offshore wind
projects has grown, there has been an increasing
number of industrial alliances within the supply
chain.
Such alliances allow for greater access to funding
and promote the pooling of experience.
Developer consortia
Round 3 gave companies the opportunity to bid for
the rights to develop wind farms in zones that were
far larger than anything that had been offered
before. One result of this increase in scale was the
formation of developer consortia for most of the
larger zones.
In some cases, including Dogger Bank (Statoil,
Statkraft, RWE and SSE) and Norfolk Bank
(Vattenfall and Scottish Power), these consortia are
composed of utility-developers who have chosen to
pool their financial and organisation resources as
well as technical knowledge and offshore wind
experience.
In other cases such as the Moray Firth (EDP
Renováveis and SeaEnergy Renewables), the Irish
Sea (Centrica and RES) and the Firth of Forth (SSE
and Fluor) a utility-generator has teamed up with
an EPC (engineer, procure and construct)
contractor or a engineering consultancy who can
either project manage the development or advise
during the process.
A final consortium option was devised for the
Hornsea zone in which the independent developer,
Mainstream Renewable Power, formed a joint
venture with the project venture division from
Siemens. In this case, agreements are made with
strategic partners to supply components and
services and generate funding.
Turbine framework agreements
Where a developer has a sizable pipeline of offshore
wind projects, it may be preferable for it to arrange
framework contracts with supply chain companies.
Such agreements can offer long term commitment
in return for improved prices, increased certainty of
supply and deeper sharing of technical information
compared with contracting on a project-by-project
basis.
There have been two significant offshore wind
turbine supply framework contracts announced to
date.
In 2009, RWE and REpower signed an agreement
worth €2 billion for the supply of 250 turbines. The
majority of these turbines will be used on the
German Innogy Nordsee I project and the Belgian
Thornton Bank II and III projects.
Also in 2009, DONG and Siemens signed a similar
agreement for the supply of 575 offshore turbines,
many of which are being deployed in UK projects
including Lincs, Walney I and II and London Array.
While Mitsubishi has yet to bring an offshore wind
turbine to the market, in 2010 SSE signed a
strategic agreement with them to cooperate on
their renewable energy development.
Innovation-focused cooperation
As well as the alliances that have been established
independently by companies, a number of part-
government funded think-tanks have sought to
bring together companies with the aim of advancing
technology and reducing costs.
The Carbon Trust‟s Offshore Wind Accelerator
programme is co-funded by eight developers of UK
projects: Statoil, DONG Energy, SSE, Statkraft,
Scottish Power, E.ON UK, RWE npower renewables
and Mainstream. The programme has a budget of
more than £9 million to support the development of
innovative solutions in foundation, access,
transmission and yield calculation technology,
focussing delivering on a short-to-medium term
impact.
ETI is a public/private organisation funded by BP,
Caterpillar, EDF Energy, E.ON UK, Rolls-Royce,
Shell and the UK Government. To date, it has
supported the development of novel offshore wind
systems including a vertical axis turbine, a floating
turbine/foundation concept and an advanced
condition monitoring system to improve reliability
and operational costs.
Acquisitions and alliances
A number of turbine manufacturers have entered
into strategic partnerships with specialist
companies for the development of their blades.
Market structure 25
REpower entered into a joint venture in 2007 with
blade manufacturer SGL Rotec to set up a
production business called PowerBlades, capable of
producing blades for its 6M turbine.
In 2011, Alstom, while developing a 6MW turbine
that will be optimised for the UK North sea market,
announced a strategic partnership with LM Wind
Power to develop what they describe as the world‟s
longest wind turbine blade ever produced.
As an alternative to a partnership, in 2009 Areva
acquired the German manufacturer of blades, PN
Rotor, in order to meet demand for its offshore
turbine.
In terms of towers, in 2011 SSE and Marsh Wind
Technology announced that they had formed a joint
venture call Wind Towers that is set to complete the
acquisition of a tower production facility in
Campbeltown on the west coast of Scotland. This
facility, which had belonged to Vestas before it was
sold to Skykon (since in administration), currently
produces towers for onshore turbines but has
benefited from recent investment that will enable it
to make offshore towers as well.
SSE has also agreed a long term framework
contract with jacket foundation manufacturer BiFab
to buy at least 50 units a year for up to 12 years
from 2014. This followed SSE‟s purchase of a 15
per cent stake in BiFab.
In a potentially wider framework agreement that
would cover a range of offshore wind activity, SSE
also announced a memorandum of understanding in
2011 that included BiFab plus the turbine and
transmission and distribution divisions of Siemens,
engineering and vessel supplier Subsea 7 and
consultancy Atkins with the aim of delivering cost
improvements. It is expected that the arrangement
will be formalised later this year.
The restricted supply of turbine installation vessels
has been considered a constraint in the past and
this has triggered a number of alliances and
acquisitions.
Heavy lift vessel specialist Beluga and construction
giant Hochtief entered into a joint venture to order
a next-generation jack-up vessel capable of
installation up to 80 turbines a year in water depths
of 50m.
In 2009, Danish developer DONG Energy acquired
turbine and foundation installation vessel owner
A2SEA in a move to secure its own project pipeline
by ensuring vessel availability. This acquisition was
followed a year later by the news that Siemens had
agreed to become a minority shareholder in A2SEA.
More recently, DONG Energy has also become a 30
per cent minority shareholder in cable installation
and maintenance specialists CT Offshore.
26 Market structure
2.6. Projects and supply chain
structure
Background
Currently, the capital cost (CAPEX) of developing
and installing a UK offshore wind farm project is
estimated to be approximately £3 million per MW.
As Figure 24 shows, the expenditure for
development and consenting accounts for
approximately four per cent of the total cost. The
procurement of the turbine and the balance of plant
accounts for more than 70 per cent of the total cost
while the installation of the project accounts for
almost 25 per cent.
Over the next decade, factors such as increasing
turbine size and projects moving into deeper water
sites further offshore will force CAPEX costs up. On
the other hand, cost savings will be found through
greater efficiency and technology advances which
will act to improve CAPEX costs.
By 2020, not including the impact of inflation, we
expect CAPEX costs to remain similar to current
levels. Looking in more detail, however, we expect
to see turbine costs per MW increase in proportion
as larger designs are used. On the other hand,
installation costs will reduce. This is because the
additional expense of handling larger foundations
and turbines is compensated by the fact that fewer
units need to be installed per MW which reduces
the number of vessel moves and installation
operations required.
Figure 24 Breakdown of CAPEX costs for UK
offshore wind farms in 2010.
Unlike sources of conventional generation, offshore
wind farms have no primary fuel costs but do have
ongoing operational costs (OPEX). These are
currently estimated to be approximately £100,000
a year per MW.
The complexity of an offshore wind farm means
these costs are spread over a wide supply chain
and a range of skills and technologies. The
developer of the offshore wind farm will typically
always undertake most of the planning and funding
activities but the way in which contracts for other
activities are arranged can vary and has evolved
over the last 10 years.
Development/consenting Turbine Balance of plant Installation
Market structure 27
Turn-key model
A number of UK offshore wind farms built to date
were developed using the turn-key contracting
approach. A simplified example of this type of
structure is shown in Figure 25.
This approach means that a project developer would
hire an EPC (engineer, procure and construct)
contractor to handle most aspects of the project
including the procurement of the turbines and the
balance of plant and coordinating installation
activities. The EPC contractor will also take on the
risk of installation delays or issues.
For early projects, it was common for the turbine
manufacturer to act as the EPC contractor. In other
cases, specialist EPC contractors such as Fluor and
KBR have been used. The EPC model minimises risk
for the wind farm developer and, in the early days,
was a way for wind turbine manufacturers to enable
projects to be constructed. As competence in the
supply chain increases, we anticipate at least a
partial return to the single EPC construct model.
In terms of the long term operation and maintenance
of the offshore wind farm, all UK projects to date
have been operated initially by the turbine
manufacturer under a warranty arrangement that
generally lasts around five years. Once this period is
over, the developer can extend the contract with the
turbine manufacturer, take on the activities itself or
arrange for a third party to do so.
Figure 25 EPC supply chain structure.
Developer
Project management
Foundations design,
manufacture,
Turbine design and manufacture
Turbine installation
Wind farm O&MDevelopment
studiesCable
manufacture Electrical design,
manufacture,
installation
Construction management
installation installationTurbine O&M
28 Market structure
Multi-contract model
For more recent projects, the EPC model has been
used less frequently in favour of a multi-contract
strategy in which the developer acts as the project
manager and agrees separate contracts with
component and service suppliers.
This strategy allows developers to assume more of
the risk of a project and reduce costs at the expense
of increased internal contracting complexity.
Contracts can be packaged and sub-contracted in a
range of ways but a typical structure is shown in
Figure 26. The preferred model is for some of these
contracts to be bundled into EPC works for identified
areas of the offshore wind farm with the developer
project managing the integration of these elements.
Another model has been adopted by the developers
of the Round 3 Hornsea zone, Mainstream Renewable
Power. As the only non-utility Round 3 developer,
they operate a model in which a development fund is
created through partnering with key supply chain
players. Costs are shared among the partners in
exchange for supply contracts. Once a project within
the zone is consented, Mainstream will be in a
position to sell it as a complete package with all the
major suppliers already in place.
Figure 26 Multi-contract supply chain structure.
Developer
Project management
Foundations design,
manufacture,
Turbine design and manufacture
Turbine installation
Wind farm O&MDevelopment
studiesCable
manufacture Electrical design,
manufacture,
installation
Construction management
installation installationTurbine O&M
Market structure 29
2.7. Project details
The following list compiles the key details, where available, of all UK offshore wind projects built, in construction or
planned.
Table 1 Abbreviations used.
UK Round
Demo Demonstration project
Project Status
Dev In development
Constr In construction
Developers
SSE Scottish and Southern Energy Renewables
RWE RWE npower renewables
EON E.ON Climate and Renewables
AMEC AMEC Border Wind
Shell Shell Wind Energy
Dong DONG Energy
SPR Scottish Power Renewables
Supply chain
Siemens Siemens Wind Power
Siemens T&D Siemens Transmission and Distribution
BiFab Burntisland Fabrication
ABB The ABB Group
Prysmian Prysmian Cables & Systems
30 Market structure
Figure 27 UK offshore wind farm development sites (The Crown Estate, supplied April 2011).
Market structure 31
Table 2 UK project description.
Project Name Beatrice Blyth Barrow Burbo Bank Gunfleet
Sands 1
Kentish
Flats 1
Location North Sea,
NE Scotland
North Sea,
NE England
Irish Sea,
NW England
Irish Sea, N
Wales
North Sea,
SE England
North Sea,
SE England
Capacity (MW) 10 4 90 90 108 90
Turbines 2 2 30 25 30 30
Foundation Jacket Monopile Monopile Monopile Monopile Monopile
UK Round Demo Demo 1 1 1 1
Status Operating Operating Operating Operating Operating Operating
Developer Talisman
SSE
AMEC
Nuon
E.ON
Shell
Centrica
Dong Dong Dong Vattenfall
Turbine supplier
REpower Vestas Vestas Siemens Siemens Vestas
Foundation
supplier BiFab AMEC
SIF &
Smulders
SIF &
Smulders
SIF &
Smulders
SIF &
Smulders
Turbine
installation Scaldis
AMEC
Seacore MPI Offshore A2SEA A2SEA A2SEA
Foundation
installation Scaldis
AMEC
Seacore MPI Offshore A2SEA
Ballast
Nedam MPI Offshore
Substation N/A N/A Alstom N/A ABB N/A
Subsea cable
A = array
E = export
JDR Cable
Systems (A)
AEI Cables
(A)
Nexans
(A&E) ABB (A) Prysmian (A)
AEI Cables
(A)
Cable
Installation
A = array
E = export
Global
Marine (A)
Global
Marine (A)
MPI Offshore
(A&E)
Submarine
Cable and
Pipe (A)
Visser &
Smit (E)
CT Offshore
(A)
Global
Marine (A)
32 Market structure
Project Name
Lynn & Inner Dowsing
North Hoyle Rhyl Flats Robin Rigg Scroby Sands
Ormonde
Location North Sea, E
England
Irish Sea, N
Wales
Irish Sea, N
Wales
Irish Sea,
NW England
North Sea, E
England
Irish Sea,
NW England
Capacity (MW) 194.4 60 90 180 60 150
Turbines 27 30 25 60 30 30
Foundation Monopile Monopile Monopile Monopile Monopile Jacket
UK Round 1 1 1 1 1 1
Status Operating Operating Operating Operating Operating Constr
Developer Centrica
TCW Group RWE RWE EON EON Vattenfall
Turbine supplier
Siemens Vestas Siemens Vestas Vestas REpower
Foundation
supplier
SIF &
Smulders
SIF &
Smulders
SIF &
Smulders
SIF &
Smulders
Cambrian
Isleburn BiFab
Turbine
installation MPI Offshore MPI Offshore
SMIT
KS Energy A2SEA
Seacore
A2SEA A2SEA
Foundation
installation MPI Offshore MPI Offshore
Ballast
Nedam MPI Offshore A2SEA Scaldis
Substation N/A N/A N/A Alstom N/A Alstom
Subsea cable
A = array
E = export
Nexans (A) AEI Cables
(A)
Parker
Scanrope (A)
Prysmian (E)
Parker
Scanrope (A)
Parker
Scanrope (A)
Prysmian
(A&E)
Cable
Installation
A = array
E = export
Subocean
(A)
MPI Offshore
(A)
Subocean
(A)
Subocean
(E)
CTC Marine
(A)
CNS Subsea
(A)
Visser &
Smit (A&E)
Market structure 33
Project Name Thanet 1 Teesside Gunfleet
Sands 2 Greater Gabbard
Gwynt y Môr
Location North Sea, SE England
North Sea, NE England
North Sea, SE England
North Sea, SE England
Irish Sea, N Wales
Capacity (MW) 300 62 64.8 504 576
Turbines 100 27 18 140 160
Foundation Monopile Monopile Monopile Monopile Monopile
UK Round 1 1 2 2 2
Status Constr Consented
Operating Constr Constr
Developer Vattenfall EDF
Dong SSE
RWE RWE
Turbine supplier
Vestas Siemens
Siemens Siemens Siemens
Foundation
supplier SIF & Smulders
SIF & Smulders
Shanghai Zhenhua Heavy
Industry
EEW Bladt
Turbine
installation MPI Offshore SNC Lavalin
A2SEA
A2SEA Seajacks
Foundation
installation A2SEA MPI Offshore
Ballast Nedam
Seaway Heavy Lifting
Substation Siemens
T&D N/A
ABB Siemens T&D
Siemens
T&D
Subsea cable
A = array
E = export
Prysmian (A&E)
Prysmian (A&E)
Prysmian (E)
JDR Cable Systems (A)
NKT (E) Draka (A)
Cable
Installation
A = array
E = export
Subocean (A&E)
Oceanteam (E) CT Offshore (A)
Subocean (A&E)
Global Marine (A&E)
34 Market structure
Project Name Sheringham
Shoal Walney 1 Walney 2 Lincs
London Array 1
Dudgeon East
Location North Sea, E
England Irish Sea, NW England
Irish Sea, NW England
North Sea, E England
North Sea, SE England
North Sea, E England
Capacity (MW) 317 183.6 183.6 270 630 560
Turbines 88 51 51 75 175 168
Foundation Monopile Monopile Monopile Monopile Monopile Monopile
UK Round 2 2 2 2 2 2
Status Constr Constr Constr Contracts
placed Constr Consented
Developer Statoil
Statkraft Dong Dong Centrica
EON
Dong Masdar
Warwick Energy
Turbine supplier
Siemens Siemens Siemens Siemens Siemens
Foundation
supplier SIF &
Smulders EEW/Bladt
SIF &
Smulders
SIF &
Smulders EEW/Bladt
Turbine
installation Gulf Marine Seajacks Seajacks MPI Offshore
MPI Offshore A2SEA
Foundation
installation
Ballast Nedam Seaway
Heavy Lifting
Scaldis Ballast Nedam
MPI Offshore A2SEA
Substation Alstom Bladt Bladt Siemens T&D
Siemens T&D
Subsea cable
A = array
E = export
Nexans (A&E) Prysmian (E) NKT (A)
Prysmian (E) Draka (A)
Nexans (A&E) Nexans (E) JDR Cable Systems (A)
Cable
Installation
A = array
E = export
Visser & Smit (A&E)
Visser & Smit (A&E)
DNK (A&E)
Project Name Humber Gateway
London Array 2
West Duddon
Docking Shoal
Race Bank Triton Knoll
Location North Sea, E England
North Sea, SE England
Irish Sea, NW England
North Sea, E England
North Sea, E England
North Sea, E England
Capacity (MW) 300 370 500 540 620 1200
Turbines 83
88
Foundation Monopile Monopile Monopile Monopile Monopile
UK Round 2 2 2 2 2 2
Status Consented Consented Consented Dev Dev Dev
Developer EON EON SPR Centrica Centrica RWE
Project Name Westernmost
Rough
Location North Sea, NE England
Capacity (MW) 240
UK Round 2
Status Dev
Developer Dong
Market structure 35
Project Name Burbo Bank
Extension
Galloper
Wind Farm
Kentish Flats
2
Walney
Extension
Location Irish Sea, N Wales
North Sea, SE England
North Sea, SE England
Irish Sea, NW England
Capacity (MW) 234 504 51 750
UK Round R1/2 Ext R1/2 Ext R1/2 Ext R1/2 Ext
Status Dev Dev Dev Dev
Developer Dong SSE RWE
Vattenfall Dong
Project Name Atlantic
Array Dogger Bank Firth of Forth Hornsea Moray Firth Irish Sea
Location Bristol
Channel SW England
North Sea,
NE England
North Sea, E
Scotland
North Sea,
NE England
North Sea,
NE Scotland
Irish Sea,
NW England
Capacity (MW) 1500 9000 3500 4000 1300 4200
UK Round 3 3 3 3 3 3
Status Dev Dev Dev Dev Dev Dev
Developer RWE
Forewind
(RWE, SSE, Statkraft and
Statoil)
SSE Fluor
Mainstream Siemens
EDP Renovaveis SeaEnergy
Centrica
Project Name Norfolk Bank Rampion West Isle of
Wight
Location North Sea, E England
English Channel,
S England
English Channel,
S England
Capacity (MW) 7200 600 900
UK Round 3 3 3
Status Dev Dev Dev
Developer SPR
Vattenfall EON Eneco
Project Name Aberdeen
Harbour Argyll Beatrice Forth Array Inch Cape Islay
Location North Sea, NE Scotland
West Scotland Sea
North Sea, NE Scotland
North Sea, E Scotland
North Sea, E Scotland
West Scotland Sea
Capacity (MW) 50.4 1500 920 415 905 680
UK Round Scottish
Territorial Waters
Scottish Territorial Waters
Scottish Territorial Waters
Scottish Territorial Waters
Scottish Territorial Waters
Scottish Territorial Waters
Status Site
exclusivity agreement
Site exclusivity agreement
Site exclusivity agreement
Site exclusivity agreement
Site exclusivity agreement
Site exclusivity agreement
Developer AREG/
Vattenfall SPR SSE Fred Olsen SeaEnergy SSE
36 Market structure
Project Name Kintyre Neart na Gaoithe
Solway Firth Wigtown Bay
Location West
Scotland Sea North Sea, E
Scotland Irish Sea,
NW England Irish Sea,
SW Scotland
Capacity (MW) 378 360 300 280
UK Round Scottish
Territorial Waters
Scottish Territorial
Waters
Scottish Territorial
Waters
Scottish Territorial
Waters
Status Site
exclusivity agreement
Site exclusivity agreement
Site exclusivity agreement
Site exclusivity agreement
Developer SSE Mainstream EON Dong
Endnotes 37
Endnotes The web addresses for the documents referenced below were checked shortly before publication.
i Department of Energy and Climate Change, EU 2020 Climate and Energy Package,
http://www.decc.gov.uk/en/content/cms/what_we_do/change_energy/european/cepackage/cepackage.aspx [last
accessed 15 March 2011].
ii Department of Energy and Climate Change, A low-carbon UK, (2009),
http://www.decc.gov.uk/en/content/cms/what_we_do/lc_uk/lc_uk.aspx.
iii The Carbon Trust, Offshore wind power: big challenge, big opportunity, (2008),
http://www.carbontrust.co.uk/publications/pages/publicationdetail.aspx?id=CTC743.
iv The Crown Estate, Towards Round 3: Progress in building the offshore wind supply chain, (2011),
http://www.thecrownestate.co.uk/supply_chain_gap_analysis_2010.pdf.
v Department of Energy and Climate Change, Consultation on Electricity Market Reform, (2010),
www.decc.gov.uk/en/content/cms/consultations/emr/emr.aspx.
vi Department of Energy and Climate Change, The Renewable Energy Strategy, (2009),
http://www.decc.gov.uk/en/content/cms/what_we_do/uk_supply/energy_mix/renewable/res/res.aspx.
vii Department of Energy and Climate Change, The UK National Renewable Energy Action Plan, (2010),
http://www.decc.gov.uk/en/content/cms/what_we_do/uk_supply/energy_mix/renewable/ored/uk_action_plan/uk
_action_plan.aspx.
viii National Grid, Offshore Development Information Statement, (2010),
www.nationalgrid.com/uk/Electricity/ODIS/CurrentStatement/.
ix European Wind Energy Association, Operational offshore wind farms in Europe, end 2010, (2010)
http://www.ewea.org/fileadmin/ewea_documents/documents/statistics/110214__public_offshore_wind_farms_in_
Europe_2010.pdf.
38
BVG Associates is a technical consultancy with expertise in wind and marine energy technologies. The team
probably has the best independent knowledge of the supply chain and market for wind turbines in the UK. BVG
Associates has over 120 man years experience in the wind industry, many of these being “hands on” with wind
turbine manufacturers, leading RD&D, purchasing and production departments. BVG Associates has consistently
delivered to customers in many areas of the wind energy sector, including:
Market leaders and new entrants in wind turbine supply and UK and EU wind farm development
Market leaders and new entrants in wind farm component design and supply
New and established players within the wind industry of all sizes, in the UK and on most continents, and
Department of Energy and Climate Change (DECC), RenewableUK, The Crown Estate, the Energy Technologies
Institute, the Carbon Trust, Scottish Enterprise and other similar enabling bodies.
For more information, please visit our website at www.bvgassociates.co.uk.
The views expressed in this report are those of BVG Associates.
Authors:
Christopher Willow has worked in the offshore wind industry for more than three years and offers a
comprehensive knowledge of both the UK‟s offshore wind supply chain and port industry. Recent work he has led
includes a report investigating the long term costs and economic benefits of offshore wind in the UK and a project
modelling the logistical benefits of clustered and distributed supply chains.
Bruce Valpy is the director of BVG Associates. Before founding the company in 2005, Bruce led wind turbine
design activities in the UK for NEG Micon (now Vestas). Since then he has created a rapidly growing, diverse client
base including the market leaders in the wind turbine and tidal turbine sectors, RenewableUK, The Crown Estate,
the UK Government (DECC), utility providers and multi-nationals.
Julian Brown has 27 years experience in engineering businesses and more than nine years experience in the
wind industry. He has provided consultancy to wind turbine manufacturers, developers, the UK Government and
supply chain entrants. As Managing Director of NEG Micon Rotors (now Vestas), Julian led the establishment of
blades technology and manufacturing at their UK Isle of Wight facility.
Contact
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INTPOW – Norwegian Renewable Energy Partners
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