1 UK Offshore Wind update David Charlesworth Senior Stakeholder Manager ALL-ISLAND CONFERENCE & EXHIBITION Offshore wind: Exploring the supply chain opportunities Thursday 24th November • Fairways Hotel, Dundalk
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UK Offshore Wind update
David Charlesworth
Senior Stakeholder Manager
ALL-ISLAND CONFERENCE & EXHIBITION
Offshore wind: Exploring the supply chain opportunities
Thursday 24th November • Fairways Hotel, Dundalk
** Delegate fee only €50 ex VAT **
Sponsored by: Supported by: Host local authority:
The Crown Estate Is a landowner
Is not a regulator
Is a public body – The Crown Estate Act 1961
Is not part of Government – but works closely with Government, statutory bodies etc.
Annual surplus is passed to the UK Government
Urban Estate
Marine Estate
Rural Estate
Windsor Estate
The Marine Estate • Approx. 17,250km of foreshore (land between mean high
and mean low water), around half of UK total
• Approx. half of UK estuaries and tidal river beds
• Ownership of the territorial seabed (out to 12 nautical miles)
• Rights to explore and exploit the natural resources of the Continental Shelf (<200 nautical miles)
• The Renewable Energy Zone – rights vested in us by the Energy Act 2004
• Rights of carbon dioxide and methane gas storage – vested in us by the Energy Act 2008
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Previous offshore renewables activities • Round 1 (Launched 2001, developer led site selection, 13 sites)
• Round 2 (Launched 2003 within 3 strategic areas, 17 sites)
• Round 3 (Launched June 2008, 9 areas around Great Britain)
• Scottish Territorial Waters (Launched 2008, 23 bids)
• Extension projects (Launched 2009, 4 sites)
• Offshore wind demonstration sites (4 projects)
• Wave and tidal demonstration sites Pentland Firth, Shetland Island, Orkney, Scottish West Coast waters (20+ projects)
• Saltire prize
• Other tidal projects including MCT at Strangford Lough, Ramsey Sound in Wales and on the Humber in England
UK Offshore Wind Programme Rounds 1&2 including Extensions and Demo’s
• 1.5 GW operational
• 2.7 GW under construction (8 projects)
• 3 projects consented, pre-construction (up to 1 GW )
• 4 projects awaiting consent (up to 1.3 GW)
• 8 projects pre-application (up to 2.9 GW)
Scottish Territorial Waters (STW)
• 5 projects active in pre-application (up to 5 GW)
Round 3
• 32 GW in development
R3 focus is
Renewable energy targets
Jobs
Scale and programme
Northern Ireland • Only part of the UK where there are no active development rights
granted by The Crown Estate for offshore wind farm development.
• Wave and tidal - Marine Current Technologies tidal stream development in Strangford Lough, innovative and successful example of the pursuit of tidal opportunities in NI waters that we would wish to see repeated.
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Background
• DETI vision through its Strategic Energy Framework for renewable sources, including offshore opportunities.
• DETI’s target of 40% of NI electricity consumption in 2020 derived from renewable energy sources.
• ORESAP and SEA identified 8 possible Resource Zones covering offshore wind, wave and tidal.
• Four zones highlighted as affording commercial development opportunities, two for wind and two for tidal resources.
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Northern Ireland Waters: Resource Zones
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Northern Ireland Waters: The Industry Design Consultation
The industry design consultation document was on our web site from 1 April 2011 to 31 May 2011, aimed at renewable energy project developers.
Seeking to confirm:
•the level of interest in offshore wind and tidal projects in the waters off Northern Ireland; and
•understand how best a leasing round might be structured to achieve the best results for industry and Northern Ireland.
Responses - Overview • Positive statement from several developers: “very pleased that
developer opinion is being sought before moving towards tendering seabed licences for potential offshore wind farms within NI territorial waters”
• 20 responses received, 18 positive, 2 confirmed no interest in NI opportunity
• International coverage – responses from UK, ROI and rest of Europe
• 10 responses from wind developers
• 7 from tidal developers
• 1 from public body
• 2 from trade organisations
Issues Highlighted By Developers
• DETI and The Crown Estate to provide clear market signals to encourage the development of projects in NI.
• Clarity on Marine Jurisdiction.
• Clear consenting process with unambiguous timelines and requirements.
• Grid Investment and interface.
• Continue enabling actions work.
• Open communication between leasing round applicants, regulators, DETI and The Crown Estate.
• Importance of stakeholder engagement at all stages of the process
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NI CONCLUSION • Design Discussion has confirmed a good level of market interest in
both offshore wind and tidal opportunities in NI waters.
• There is an appetite for competitive leasing rounds.
• DETI and The Crown Estate working collaboratively on the key issues.
• The Crown Estate is looking forward to successful tender rounds for Northern Ireland to achieve its renewable energy targets.
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Scottish Territorial Waters: Medium Term Options
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Strategic Environmental Assessment
(SEA) of Draft Plan
for Offshore Wind Energy in Scottish
Territorial Waters:
•“Do maximum” Option
•2221 sq.km
•Marine Scotland Consultation closed
evaluation ongoing
UK Offshore Wind Market
0
10,000
20,000
30,000
40,000
50,000
60,000
0
2,000
4,000
6,000
8,000
10,000
12,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Round 3
Scottish Territorial Waters
Demo Sites
Round 1 and 2 (including extensions)
Cumulative Installed MW
Opportunity for generating capacity from all current leasing rounds
Year
Cu
mu
lati
ve(M
W)
An
nu
al(M
W)
Future Rounds
Information taken from Developers updated Dec 2010 forward plans and projected capacity
0
1000
2000
3000
4000
5000
6000
7000
8000
SSE
RW
E n
po
we
r
Ce
ntr
ica
Ibe
rdro
la (
Sco
ttis
hP
ow
er)
E.O
n
EDF
Vat
ten
fall
Do
ng
Stad
tkra
ft
Stat
oil
EDP
Re
no
vave
is
Ene
co
Stad
we
rke
Mu
nch
en
Mai
nst
ream
War
wic
k En
erg
y
SeaE
ne
rgy
Re
ne
wab
les
Sie
me
ns
Pro
ject
Ve
ntu
res
Flu
or
Mas
dar
TCW
PG
GM
& D
utc
h A
mp
ere
JP M
org
an II
F
Pru
de
nti
al M
&G
UK "Big 6" Integrated Suppliers Other Energy Companies SpecialistDeveloper
OEM EPC Infrastructure Fund/Institutional/ Sovereign
Pre- planning application
Awaiting planning consent
Consented
Under Construction
In Operation
MW
UK Pipeline Market Shares
April 2011
Round 3 Programme Update
17
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Cap
acit
y (M
W)
Round 3 programme delivery curves
MW of Grid Connection Offers
AcceptedMW of project approvals
MW of Draft ES issued for consultationMW of Planning Applications
MW of KPC granted
MW of Leases Signed
MW of Project Construction startedMW of Projects Commissioned
Year
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Information taken from Developers updated Dec 2010 forward plans and projected capacity
The Round 3 Approach • Development in partnership with The Crown Estate to consent
Shared development risk. Pre-consent co-funding > £100m. Contract obligations on programme and budget to consent. Competition criteria based on confidence in end-to-end delivery.
• A zonal approach (exclusivity for development partner/consortium)
Assess cumulative impact, engage holistically with stakeholders, supply chain confidence, strategic supply chain development.
• Direct intervention by The Crown Estate to promote and de-risk
Investment in enabling actions on national issues, master planning, workstreams on key risks, forums of developers and politicians.
Partnerships
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• Strategic workstreams in support of zone wide issues
• Positive programme of relationship management
• R3 ZDA feedback and workstream coordination between
partners.
• Six monthly programme updates
• Annual reports
Strategic Challenges to Programme Delivery
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Health & Safety Planning & Consents
Grid & Technology
Supply Chain & Skills
Project Economics & Financing
Rapid sector growth, further
from shore
New Planning Act, revisit IPC and
NPS’s, untested new processes
and teams, funding aviation
solutions, MCZ uncertainty
Coordinated offshore devt,
OFTO regime, charging,
technical standardisation, risk
and perception
Competing markets,
capacity, early investor
confidence, delivering
infrastructure investment
and OEMs, leadership on
skills
Consented projects reaching investment hurdle rates, access to
construction finance, facilitating refinancing when operational
Levelised
Cost of
Energy
Supply Chain Progress
Turbine supply
22
0
2
4
6
8
10
12
2000 2005 2010 2015
Turb
ine
Size
MW
Year
Progressing Offshore Wind Turbine Design
Geared Drive
Products by OEM
Direct Drive Products by OEM
Data from BTM Consult ApS Offshore Report Nov. 2010 and The Crown Estate
2 years
operational
experience
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MPI: Adventure
Swire Blue Ocean MPI: Discovery
Beluga Hochtief
RWE: 2 vessels
FOW: Bold Tern (X2) Van Ord
A2SEA: Sea Installer Seajacks: Zaratan
Turbine Installation Vessels
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Infrastructure
Belfast
Sheerness, Kent Humber
Dundee
25
39 54
436
36
6307
861
150
Publically stated investment intent in supply chain 2010
Towers
Substructures
Turbine
HVDC/Cables
Ports
Generators/Blades
Vessels
Demonstration Sites
Source The Crown Estate: Figures in £M
Investment
40
45
50
55
60
65
70
75
80
85
Q3-2008 Mar-09 May-09 Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11
E&Y Country Attractiveness Index: Offshore Wind China
UK
US
Germany
Italy
France
Ireland
Sweden
Netherlands
Belgium
S Korea
Denmark
26
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Thank you
http://www.thecrownestate.co.uk/energy/offshore-wind-energy/