UK aims for offshore wind revolution
The UK Government projects that offshore wind power could contribute up to 33 GW of installed generating capacity by 2020, enough to satisfy a quarter of the UK's electricity demand. The Department of Energy and Climate Change (DECC) estimates that this will require around 5000-7000 more wind turbines, and what's more, it has earmarked 9 zone development agreements to take the proposed farms through the consenting phase.
The EU renewable energy target mandates the UK is to generate 15% of energy from renewables by 2020, but RenewableUK (formerly the British Wind Energy Association) expects the percentage of the UK's electricity from wind energy alone to be nearer 40% by 2020, if these 9 zones as part of the Round 3 leasing process are developed as planned (see boxes – Background to Round 3 and Round 3 zones and developers).
These large scale wind parks are being constructed in UK waters with the support of the Crown Estate, the national agency which owns the coastal seabed. Agreed areas of the sea are being leased to wind power developers, which can then benefit from Government support once the turbines are up and running.
This kind of development means that offshore wind generation is set to grow enormously, and make the UK a world leading offshore wind hub. Or so the Government is banking on. It is certainly putting its money where its mouth is, supporting the development of offshore wind in the form of the Renewables Obligation (RO). As part of this RO, Renewable Obligation Certificates (ROCs) are issued for every unit of electricity generated from renewable sources. These ROCs can then be set against a company's commitment to reduce its carbon emissions - or traded on the carbon market.
DECC provided additional support to the sector in March 2009 by announcing that extra financial support would be given to wind farms operating in the sea. Part of the aim was to combat the potentially damaging effect on green energy investments of the global credit crunch. This “banding review” increases the banding of ROCs from 1.5 to 2.0 for offshore wind projects meeting specified completion criteria (if they place new orders in 2009-10), and then 1.75 in 2010-11.
This is expected to provide £525 million support from 2011 to 2014, protecting 3 GW of proposed investment over the next two years (The UK budget 2009 also announced that UK renewable and energy projects stand to benefit from up to £4 billion of new capital from the European Investment Bank through direct lending to energy projects and intermediated lending to banks; one of the first projects to benefit from this is RES UK and Ireland's Hill of Towie project in Scotland).
And the UK Government is also encouraging companies to invest in providing the underwater power transmission lines needed to transfer the large amounts of electricity generated back to land. A first stage tender process for a number of offshore wind projects is currently running.
Is such investment paying off?
The early signs are certainly positive. When leading turbine manufacturer Vestas finally closed its UK blade manufacturing plant on the Isle of Wight in 2009, it seemed like the probable death knell for any hope the UK had of attracting manufacturers to its shores. But a flurry of announcements, earlier this year, have revived hopes for what RenewableUK describes as “the rebirth of manufacturing in the UK”.
In January Mabey Bridge announced a US$40 million investment in a new factory to build towers for wind turbines in Chepstow. In February Clipper Windpower started construction of a factory in Newcastle upon Tyne, where it will build blades for its 10 MW Britannia offshore turbine, currently under development.
This was quickly followed with news that Mitsubishi is investing £100 million in a UK-based R&D facility. Mitsubishi expects to produce a prototype 6 MW offshore turbine within three years, with full scale production starting a year later, if all goes to plan. The UK Government is supporting the company with grants up to £30 million.
GE and Siemens have also jumped on the bandwagon very recently, with plans for new manufacturing facilities in the UK; these amount to investments of close to €200 million.
World leader in offshore wind
Even before the Round 3 announcement, the UK is currently the world's largest generator of offshore wind energy. Burbo Bank, for example, off the north west coast, is one of several large offshore wind parks built since 2003. Its 25 large turbines, with a total installed capacity of 90 Megawatts, can produce enough electricity in a year to meet the annual consumption of 80,000 households.
But even that pales into insignificance with plans for the 1 GW London Array – a joint project between DONG Energy, E.ON and Masdar – which was recently given the official go ahead. Onshore work is due to start this summer, with offshore work due to start in early 2011. The London Array will be built around 12 miles off the coasts of Kent and Essex. The wind farm will be installed on a 90 square mile site and will be built in two phases. The consortium hopes the first phase of 630 MW and 175 wind turbines will be completed and generating power in 2012.
Another landmark has just been achieved as we go to press; RenewableUK reports that the first GW of installed offshore UK wind energy capacity has been reached, as two other wind farms off the coast of Britain began generating electricity: Robin Rigg operated by EON and Gunfleet Sands operated by DONG Energy. This one GW comprises 11 wind farms, or 336 installed wind turbines.
Not plain sailing
Of course look beyond the hype and optimism, and substantial barriers remain. We will cover some of these challenges in this issue.
Building wind farms in the sea is more expensive than on land, mainly because of the additional costs of foundations in the sea bed, power cabling back to land and the complexities of turbine installation. Reducing these costs is a major challenge for the European wind power industry, and that is why the support mechanisms mentioned earlier are so important (however, RenewableUK estimates that if the European offshore sector expands to an annual deployment level of 4-5 GW, then costs fall by as much as 20% – in other words, support industry development now and in time subsidies and incentives will no longer be needed).
Background to Round 3 – in brief
- Offshore wind in the UK is developed in a series of competitive leasing rounds. Two rounds have been completed and these projects are now being developed;
- The Round 3 offshore wind energy programme was launched by The Crown Estate in 2008;
- Round 3 was structured differently from two previous leasing rounds (Rounds 1 and 2), as tenders were put forward for 9 zones of development each potentially containing multiple projects. The scale of some of these zones is much larger than anything seen before, with some zones potentially yielding 10 GW of projects. In total the size of Round 3 is anticipated to be at least 25 GW - compared to the combined total of 8 GW from Rounds 1 and 2;
- Nine development zones have been allocated to companies and consortia (see box – Round 3 zones and developers) - to start the development process. Wind lobbying organisation RenewableUK says that the scale of this project represents a “step change for the global industry”;
- Another new feature of Round 3 is that within this process the Crown Estate will co-invest with developers, with the aim of “facilitating efficient delivery of the wind farms”.
Installing wind turbines out at sea also requires a range of engineering skills and sophisticated equipment – from jack-up barges to help drive the foundations deep into the sea bed through to cable-laying vessels to connect the wind farm to the mainland electricity grid.
This challenge however provides coastal ports with the opportunity to build up a new economic base providing construction and servicing. For example Mostyn (near Liverpool) has already provided facilities for three offshore projects – Burbo Bank, North Hoyle and Rhyl Flats – and is gearing up for more large wind farms to be built off the UK's north west coast, including the 250 turbine Gwynt-y-Mor project. A maintenance team of 15 people based at the port, for example, is employed just to remotely monitor the North Hoyle turbines.
But perhaps the biggest challenge remains planning. Protests against planning applications for onshore substations (which will feed electricity generated offshore to the mainland electricity grid) are already gathering force, despite Britain's current Labour Government taking action to smooth the planning process for renewable energy projects through the introduction of the Infrastructure Planning Commission, or IPC (and should the opposition Conservative Party win this year's general election it has pledged to do the same, though this may take a different form to the IPC).
By way of example, according to the European Wind Energy Association (EWEA), the time needed for onshore wind farm planning applications ranges across the EU from less than 10 months to well over 50. The reasons for this enormous gap vary, but include the high number of authorities to liaise with, and the lack of clear administrative guidelines for developers.
Top of this table is Finland, with just over 8 months needed to get permission to build a wind farm, followed by Austria (10 months), Romania (15 months), and Italy (18 months). The country where the patience of a wind developer is most challenged is Portugal, where over 58 months are needed on average to get permits. Also at the bottom of the list are: Spain (57 months), Greece (50 months) and Poland (43 months) - these findings were disclosed by the EU-funded project, Wind Barriers.
According to the same report, the experience in the offshore sector is, so far, more positive. The average time to get the green light is 18 months, much lower than onshore. It concluded that countries with offshore wind farms had developed an efficient decision making process for this sector, thereby reducing the complexity for offshore wind developers (note – the final part of this article below looks at consenting for offshore wind farms).
Despite all the problems, if the offshore wind power sector makes its expected contribution towards the UK's 2020 target for renewable energy, then the Carbon Trust – a Government-backed body that encourages businesses to reduce their carbon emissions - estimates that up to 70,000 jobs would be created and up to £8 billion generated in annual revenues. And in these times of economic challenge, these are the kind of statistics that make people sit up and take notice.
Navigating the offshore wind planning process
Michael Starling, BMT Renewables
Securing planning consent for building wind farms can be confusing and time-consuming for developers. What does this crucial first phase of development involve?
Round 3 zones and developers
- Moray Firth Zone, Moray Offshore Renewables Ltd which is 75% owned by EDP Renovaveis and 25% owned by SeaEnergy Renewables – 1.3 GW;
- Firth of Forth Zone, SeaGreen Wind Energy Ltd equally owned by SSE Renewables and Fluor – 3.5 GW;
- Dogger Bank Zone, the Forewind Consortium equally owned by each of SSE Renewables, RWE Npower Renewables, Statoil and Statkraft – 9 GW;
- Hornsea Zone, Siemens Project Ventures and Mainstream Renewable Power, a consortium equally owned by Mainstream Renewable Power and Siemens Project Ventures and involving Hochtief Construction – 4 GW;
- Norfolk Bank Zone, East Anglia Offshore Wind Ltd equally owned by Scottish Power Renewables and Vattenfall Vindkraft – 7.2 GW;
- Hastings Zone, E.ON Climate and Renewables UK– 0.6 GW;
- West of Isle of Wight Zone, Eneco New Energy – 0.9 GW;
- Bristol Channel Zone, RWE Npower Renewables, the UK subsidiary of RWE Innogy – 1.5 GW;
- Irish Sea Zone, Centrica Renewable Energy and involving RES Group – 4.2 GW
The UK's round 3 leasing process for offshore wind marks the start of the consenting process. The new and now operational consenting authority for this programme, the Infrastructure Planning Commission, will make the ultimate decisions on the detailed plans for offshore wind farms that the development partners will ultimately submit.
Offshore Renewable Energy Installations (OREIs) – which include offshore wind parks and wave and tidal farms - are spearheading the biggest change in sea use since the oil and gas boom of the 1970s and 80s, and developers are queuing up to get involved. The marine sector was given a fresh boost earlier this month when the Crown Estate published the names of successful bids for the world's first commercial wave and tidal leases (see Renewable energy in Scotland, pages 28 to 32).
The announcement followed hot on the heels of the Round 3 offshore wind leasing awards. Under these agreements, the successful parties can start the first stage of development – securing consent from all relevant bodies – but the planning issues associated with major energy infrastructure projects are notoriously complex.
In an attempt to streamline the planning process for nationally-significant infrastructure projects, the UK Government created the Infrastructure Planning Commission (IPC) as part of the 2008 Planning Act. In practical terms, this means that in March 2009 the IPC took over responsibility from the Department of Energy and Climate Change (DECC) for the consent process relating to all new offshore wind farm applications with a capacity greater than 100 MW.
Before a developer can start physical work on any part of an OREI, they must obtain consent from the relevant bodies. For most Round 3 wind farms this will be the IPC, but smaller farms and most wave or tidal projects below the 100 MW threshold will still be handled by the DECC.
Consent must be given for each phase of the project including surveying, construction, ongoing operations and decommissioning. Each phase is broken down further with consent required for the offshore elements of a wind farm (including turbines, offshore transformers and export cable routes) for crossing the shoreline (mainly the export cable route) and for onshore items (export cable routes and grid connection infrastructure including substations).
Consent for the principal stages of the development requires an in-depth study to demonstrate the suitability of the project, its impact on the environment and the effect on stakeholders.
One of the main parts of the approval process is environmental consent, for which developers have to produce a comprehensive statement based on an environmental impact assessment. This is split up into three areas, the first of which covers the physical and chemical environment including sediment, noise, contamination and electrometric fields.
The second area covers the biological environment, including the sea bed, inter-tidal areas, land flora and fauna, fish and shellfish, birds and marine mammals. One of the problems with Round 3 contracts is that the development zones are further offshore and are therefore shifting from near-shore ecology to deep-water ecology. This moves them closer to the environmental impact assessments that are carried out for the offshore oil and gas industry.
The third impact area is the human environment, which includes navigation, fisheries, aviation and cultural heritage.
The development of wind farms around the UK's coastline is already beginning to complicate the approval process for future schemes. When consent for Round 1 wind farms was granted it was possible to view the navigational and environmental impact for each scheme in isolation as they were small discrete projects. Round 2 wind farms, however, were built in close proximity to each other so the environmental impact of a new scheme had to be viewed in the context of existing wind farms around it; granting consent to one farm might jeopardise the ability to secure consent for another.
The cumulative and combined effect of these issues is crucial when Round 3 developments and the planned offshore wind farms within Scottish territorial waters are added to the mix, and will become even more prevalent as more wind farms are planned and developed.
The role of navigational assessment is also changing from an exercise focused exclusively on navigational risk to one that must also address the effect on routing and access to ports. As part of its environmental and navigational assessment work for wind farms and tidal energy schemes in the UK and Pacific Rim, BMT Group for example has identified how wind farms can act as physical barriers to shipping. If longer ship routings are required to ensure safe navigation, there will be a knock-on effect on shipping costs and access to ports.
Once a developer has produced their environmental statement, the relevant body makes its decision using the statement together with the results of stakeholder consultation. The marine environment is full of people making a living or enjoying the amenities provided by the sea, so the identification of all the relevant issues and stakeholders is very important in satisfying the consenting authority.
Stakeholders include statutory consultees such as the Maritime and Coastguard Agency, strategic stakeholders such as national fishing organisations and the Royal Yachting Association, and community stakeholders such as residents' associations.
The developer's aim is to secure a statement of ‘no objection’ from all statutory consultees and to satisfy all stakeholders. It will never be possible to completely satisfy everyone so full and open liaison, discussion and negotiation to identify solutions that are acceptable to all parties is key to achieving the desired outcome.
The consent process may appear over-complicated, but as with any exercise based on procedure it is important to understand and deliver exactly what is required at each stage. By building a team with a depth and breadth of experience and expertise, developers can ensure that the complex requirements do not become unnecessarily onerous.
About the author:
Michael Starling is principal consultant at BMT Renewables, a subsidiary of BMT Group.