Crown Estate woos offshore wind investors
Wind farms such as the giant London Array rely heavily on investor confidence. Photo: Peter Barker
The Crown Estate (TCE) has published an introduction to the UK’s offshore wind programme.
It is aimed at increasing the attractiveness of the industry for potential investors, identifying examples of where developers and government are addressing the challenge of de-risking offshore wind.
The government, along with the developer community, are currently engaging with the financial sector, adopting a two-way approach of communicating UK opportunities while at the same time understanding potential investors’ key concerns. Confidence to invest in low-carbon infrastructure is expected to be boosted by the Green Investment Bank. The government’s capitalisation of £3bn in the bank will help in achieving the unprecedented level of investment offshore wind will demand over the next decade.
Improving workforce skills and the development of safety manuals, along with incident monitoring, and the sharing of information through various industry forums, are among the measures being taken to mitigate health and safety risks resultant from the utilisation of new technologies.
The target of a one third reduction of levelised costs is seen as key for offshore wind to become competitive with other forms of energy generation. The Cost Reduction Taskforce, involving influential supply chain companies, has been established by the government with a remit that includes production of an action plan for reducing costs. Due to report to government ministers in the spring of 2012, it will include input from a similar cost reduction analysis from TCE.
The scale of proposed projects brings particular planning and consent challenges. Stakeholder groups are again sharing information to shorten the planning cycle, including addressing environmental and conservation concerns. The Infrastructure Planning Commission in particular, is issuing guidance to developers on, for example, trans-boundary impact issues.
The capacity of the supply chain market to cope with the scale of growth, along with early investor confidence is another challenge. Innovation is seen as key to cost reduction here, and a number of government initiatives are producing support programmes, including early research and testing facilities and regional development partnerships. Around £130m has been allocated for the development of port sites and infrastructure projects in English Assisted Areas and in Scotland.
The challenge of energy distribution, along with coordination of the offshore network is being addressed from a number of directions including the introduction of an offshore transmission regime to stimulate competition. A generator build option is expected to further remove much of the risk of grid connection.
The word innovation appears again, with the requirement to make the transition from adapting onshore wind technology, to development of a more marine based system, suitable for a wider geographical basis. Lower risks and costs are anticipated from attracting manufacturing to the UK, along with more standardisation of design of, for example offshore substations and turbine foundations.
By Peter Barker
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