Seabed of change: unlocking the economic potential of floating offshore wind in the UK

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Image caption: CGI of the future floating offshore wind development in Port Talbot

In the global race to attract green energy investments, the UK needs to act decisively to remain a world leader in offshore wind. New technologies such as floating offshore wind (FOW) present an unmissable opportunity to trigger a wave of green economic growth, which will sweep across England, Scotland and Wales. Andy Reay, ABP Head of Offshore Wind, discusses why, with so much at stake, we need to draw on the lessons from fixed bottom offshore wind and secure a clear project pipeline, for example 20GW in the Celtic Sea, so that we can give investors the confidence to deliver the port infrastructure needed to enable the UK’s net zero transition.

Thinking long-term

The race to net zero is creating an increasingly competitive global arena, where countries across all continents seek to attract the attention of global investors. Winning the finances required to develop the renewable energy projects needed to reduce carbon emissions makes a big difference. If we look at some global forecasts, FOW is essential for us to be able to deliver the net zero transition. There simply aren't enough suitable fixed bottom locations for us to deploy sufficient offshore wind projects to meet our energy needs.

This means we need to explore deeper locations in line with the global trend of venturing into deeper waters. FOW technology seems to provide a solution. If you look at the US market, it has significant FOW potential. This is also the case in Japan and South Korea. With the right policy environment and market visibility, there appears to be a real opportunity for the UK to become a global leader in FOW development. But the power of incentives should also not be underestimated. With the US introduction of the IRA (Inflation Reduction Act) and the Green Deal in Europe, a question is raised about whether the UK needs to do more to stay globally competitive.

Nevertheless, when it comes to its own potential for FOW, the UK appears to be in a strong position. There are broadly 3 zones, which can support large scale FOW development. These are in Scotland, as part of the ScotWind seabed and INTOG allocation processes, in the Celtic Sea and off the North East coast of England. The kinds of technology required by FOW projects such as mooring systems, cables and the design of parts themselves, draw on knowledge that has come from decades of oil and gas experience. And as we know, the UK has been very successful in these sectors and exporting that potential around the world. Therefore, it's not controversial to think that the UK could become a thought leader and maximise the significant export potential of FOW as well because we could apply the skills and lessons, we’ve learnt from other energy sectors.

Ports as manufacturing hubs

One of the biggest current challenges for FOW is that it is relatively costly in comparison to fixed bottom offshore wind. You could say that it’s effectively where fixed bottom was about 15 years ago. We’re at the start of the journey down the cost curve, which could be accelerated if we find ways to industrialise the process and build at larger scale. Perhaps the most important lesson is that the UK should seek to secure as much of the supply chain as possible at this embryonic stage. Because once the opportunity is gone, it will be almost impossible to gain back that global advantage.

Ports provide ideal locations for the manufacturing and assembly hubs needed to industrialise foundations manufacturing and other components and bring down the cost of FOW. And this is really at the heart of ABP’s strategy. We want to be the focal point for the industrialised assembly and manufacturing of floating foundations and turbine integration, which, when done at scale, will bring us down the cost curve.

Floating on the Celtic Sea and in Scotland

Port Talbot presents an interesting case study because it is able to offer a holistic package to the FOW sector, combining natural physical features, the space to develop the right infrastructure and access to skilled labour. We are currently exploring the option of constructing heavy lift quays to link the onshore storage land to the marine environment and create a GW-scale FOW hub port. As part of its ‘Ready for Tomorrow’ sustainability strategy, ABP is planning to invest around £500 million to develop new and repurposed infrastructure in Port Talbot to enable the port to host manufacturing, installation, and supply chain activity for the FOW sector. This has the potential to create 16,000 new, high-quality jobs and attract £5.5 billion inward investment in the wider regional economy.

Earlier this month we were proud to announce that ABP will be part of a cluster of ports in and around the Cromarty Firth, which all are adding different elements of value to the offshore wind supply chain. We want to create an asset which works in harmony with existing port infrastructure and we will use the knowledge we've gained in our experience and our track record of Green Port Hull and Port Talbot to investigate the potential of creating new port infrastructure on the site. FOW and the generation of green electrons also feeds into wider industry decarbonisation.

Unlocking our seabed

But to enable these ambitions UK Government needs to stand right behind us and this means a couple of things. Firstly, we need greater confidence to stimulate investment and demand, both through certainty on the seabed leasing scale and timeline and through a demonstration that we have learnt the lessons from AR5 about reflecting real world costs.

Secondly, we need to stimulate UK supply chain development by having targeted and marginal co-investment support for scale infrastructure development and rewarding genuine UK commitment through Contract for Difference (CfD) reform. An example of the former is the FLOWMIS scheme, which is specifically designed to enable and facilitate the development of FOW port infrastructure. Consenting also needs to happen at pace and with priority. There is a huge opportunity for government to set the scale of ambition and paint the picture of what the next ten to twenty years of FOW could look like, by developing a strategy and then working with ports and supply chains to deliver it.

As a final thought, I would like to leave you with this - at ABP, we are serious about floating offshore wind. We’ve already spent millions on putting together detailed development plans and we have a dedicated project team working to lay the groundwork. Ultimately, in line with our sustainability strategy, ‘Ready for Tomorrow’, we need confidence that the port assets we build will be used long-term, so that we can enable a greener and more prosperous future for the UK.

#FloatingOffshoreWind #ReadyForTomorrow #NetZero