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Floating Wind – why delivery requires a balanced mix of ambition and pragmatism The UK’s targets for offshore wind expansion are ambitious and exciting. Installed offshore wind capacity targets of 40GW by 2030 and up to 125GW by 2050 are a cornerstone of the country’s journey to a Net-Zero carbon economy. If the UK is to achieve these goals and in so doing reach the stated objective of 60% UK content, then we must build out a manufacturing and logistics infrastructure at a national scale well beyond anything previously seen, even in the heady days leading up to peak oil. The speed with which floating offshore wind has become a major element within future capacity plans has come as a surprise to many. It is only a few years since the consensus view at conferences was that our industry had much left to do to create a mature and competitive indigenous supply chain for fixed wind. Only then, they thought, with lessons learned, disruptive technologies proven and economies of scale delivered for fixed wind, could industry realistically hope to deliver floating wind at an acceptable price per MW/Hour. Today, conference speakers talk openly and with conviction about floating wind deployments of over 100 foundations per project being delivered with the next 10 years. A sector still currently progressing demonstrator and early-stage projects is voicing ambitions to assemble floating foundation at a rate of 2 – 4
units a month. The market potential is undeniable and one only needs to look at the recent ScotWind licensing round where 15GW of an allocated 25GW are based on floating wind developments. There is broad agreement that this and other initiatives such as INTOG and developments in the Celtic Sea will require the installation of between 1000 – 1500 units making the need for port infrastructure development for floating wind increasingly urgent. It is unlikely that 60% local content will become a mandated requirement so the infrastructure and manufacturing capability our industry develops must be competitive, viable and commercially sustainable in the long-term. Our UK ports sit at the very heart of this investment and are vital to the successful development of our industry supply chain and the UK’s delivery on energy policy. This is the third toll of the bell for the UK supply chain in terms of wind energy development. Through the initial introduction of onshore wind right up to today’s major offshore wind developments the UK supply chain has mainly lost out to overseas manufacturers offering lower costs. Developers have been heavily criticised for buying abroad but the reality is that it is a choice driven by necessity. A highly competitive CfD strike price and an absence of UK manufacturing capability has left little option but for developers and their main EPCI contractors to look overseas. Floating wind is thought by many as the “last chance saloon” for a long-term renaissance in UK manufacturing and few would disagree. With one chance remaining and high stakes to play for our industry must proceed with care, mindful of the sensitivities which will determine our success or failure in maximising the opportunities that lie ahead.
Collaboration
Steve Chrisholm - Director of Operations and Innovation*
www.ogv.energy I April 2022
Collaboration – Will be key to the mature and considered build out of infrastructure but needs a sea change in thinking. The current culture, generated by a highly competitive CfD process, has permeated down through the layers of supply chain. It is not conducive to the early and
open collaborative discussions on resource sharing that are the hallmark of industries with greater maturity. The larger commercial floating wind projects will be too big for one port to accommodate and will need a group of ports to work together to provide the quayside space and laydown areas needed for manufacture, assembly and load out. Much emphasis is placed on the structural foundations and WTG’s (wind turbine generators) but the reality is that the mooring systems will also require a lot of space for marshalling and logistics. A culture of collaboration is needed that starts with developers at the earliest stages of Concept and FEED and then cascades out through the supply chain. Ports cannot be all things to all people and must pick their niche as best fits their location, natural attributes and development potential.
Completion & Diversity Not all ports will be created equal and nor should they be, for there needs to be diversity in the supply chain to ensure investment creates the maximum breadth of capability. Whilst we need capacity and capability, we should take care that we create a healthy level of competitive tension but not at the risk of oversupply. No-one wants or can afford to see new facilities lying idle a few years from now through lack of contracts because too many businesses chased after the same market segment. The line between a buoyant market segment and one which is oversupplied and engaged in a commoditised race to the bottom on pricing is a fine one and to be avoided at all cost. Through the balanced approach described above it is expected that we will see a range of port offerings. Some will achieve Freeport status or equivalent and be the nucleus of Superhubs accommodating manufacture and assembly with a cluster of related businesses co-located on site. Others in strategic locations will develop value propositions best suited to their location and attributes focusing on foundation or WTG assembly and some level of localised manufacturing. O&M capability will likely be developed amongst smaller ports without the deeper water depths and extensive land mass essential for manufacture and assembly. If this balance can be achieved then the message is clear, there is enough work out there for everyone.
