UK offshore wind – dodging the cuts

For over ten years MJ has featured news from the world of marine renewables (offshore wind and marine), initially on an occasional basis. Such was the pace of development, the subject soon earned its own regular monthly column and with offshore wind now the dominant sector one can wonder if in the industry’s embryonic stages anyone could envisage the influence it would have on the small (and not so small ) workboat industry which MJ reaches out to.

Regular visitors to Seawork will have seen how the support sector of the industry has developed year on year and while there have been setbacks with some earlier proposed projects falling by the wayside, current and forthcoming offshore activity is sufficient to send the message of continuing opportunity for both installation and longer term O&M phases of upcoming projects throughout European waters.

DOMINANT UK
Denmark pioneered offshore wind energy but the UK now dominates with operational wind farms along with progress of Round 2 still in build and Round 2 extension projects, not to mention the Round 3 programme, now fast approaching construction stages.

A picture of the current European scene is painted by The European Wind Energy Association’s recent key trends and statistics for 2015. Installed grid-connected capacity increased by 108% in 2015 over the previous year now standing at 3,019MW with 754 new turbines at 15 wind farms grid-connected during 2015. In a sign of the passage of time, seven turbines were decommissioned in the UK and Sweden. Cumulative numbers are impressive, 3,230 turbines now installed and grid-connected throughout Europe making a cumulative total of 11,027MW.

Assessing countries individually, over 75% of net capacity brought online during 2015 was in German waters. The UK dominates however with 45.9% of the cumulative capacity followed by Germany (29.9%) and Denmark (11.5%). The North Sea dominates by region with 69.4% of capacity, Irish Sea 17.6% and the Baltic Sea 12.0%. The Netherlands and France are two countries coming up fast on the outside, the former seeing a near 20% increase in its share of electricity generated by wind turbines during 2015, including onshore.

UK PROGRESS
Space precludes a detailed look at the wider European picture but as this column has followed the ups and downs with the UK programme for some years the opportunity is being taken to provide an update to coincide with this Seawork edition of MJ as the industry gathers at what has become an annual shop window for the offshore wind support sector.

The Crown Estate (TCE) is the landlord of the UK seabed and a look at its map of existing and proposed developments presents a graphic illustration of the scale of Round 3 compared with the two leasing rounds which opened with Round 1 in December 2000 followed by Round 2 in July 2003. Thirteen Round 1 projects are now operational generating 1.2GW and licences for 16 Round 2 projects have been awarded totalling almost 6GW. In January 2009 the UK Offshore Energy Strategic Environmental Assessment (SEA) identified up to 33GW potential offshore wind capacity, forming the basis of Round 3. Before checking on progress let’s first consider the state of what was to become known as Round 2.5.

There was concern that momentum gradually building with the first two rounds would be lost in the gap before Round 3 projects entered actual supply chain manufacturing and construction phases. In 2010 therefore, development rights were awarded to four Round 1 and 2 sites to extend their geographical areas, producing an additional 1.4GW. The four sites were at the existing Kentish Flats, Greater Gabbard, Burbo Bank and Walney wind farms.

Vattenfall’s Kentish Flats Offshore Wind Farm, off the north Kent coast is one of the earliest Round 1 sites, operational since 2005 with 30 Vestas 3MW turbines. At the time it held the dual record of largest offshore wind farm in UK waters with the largest turbines. The extension involved an additional fifteen 3.3MW MHI Vestas turbines along the south and southwest side of the existing site. The location, in relatively shallow and sheltered waters meant construction progressed speedily and work was completed in summer 2015, the additional turbines identifiable by being taller than the originals.

The extension to the Greater Gabbard Wind Farm has had something of an on-off history. Original plans were substantial involving around 140 extra turbines producing up to 504MW; during 2014 however developers SSE and RWE Innogy announced they were pulling out of the project. It was later resurrected as a separate venture known as Galloper Wind Farm Ltd, an equal partnership between RWE Innogy, Siemens Financial Services, UK Green Investment Bank and Macquarie Capital. Revised plans anticipate 56 Siemens 6MW turbines producing up to 336MW, operational by March 2018 with a number of key announcements now having been made including awarding of a contract for construction of the substation at Heerema Fabrication Group’s Hartlepool facility.

In the Irish Sea, Burbo Bank Extension is being built by Dong Energy with a firm and unconditional order for 32 V154-8.0MW turbines for the project now awarded to MHI Vestas. Other key contracts awarded include foundation installation by Van Oord and the timeline envisages offshore construction commencing this year with final commissioning in 2017.

Still in the Irish Sea, Dong Energy has confirmed the Final Investment Decision (FID) for Walney Extension Offshore Wind Farm which at 660MW will (just) take the title of world’s largest offshore wind farm from London Array. It will be operated under the UK’s FID-enabling regime with a fixed price for the first 15 years of production.

Walney Extension is a significant project when considering its scale. A contributory factor in continuing cost reductions with offshore wind is economy of scale as new generation larger turbines gain maturity and enter service. Dong Energy has selected two different turbines for the project namely 40 MHI Vestas 8MW turbines and 47 Siemens 7MW turbines. It is worth reflecting here that just 87 turbines will produce the same output that would have required over 180 earlier generation 3.5MW models.

Development consent for Walney Extension was granted in November 2014, onshore construction starting in December 2015 and offshore construction is due to start imminently. Transfer of the project to the O&M team is scheduled between December 2017 and December 2019.

ROUND 3
Attention is now focussing on Round 3 along with Scottish and Northern Ireland territorial waters projects. Of the original nine zones three have fallen by the wayside. Celtic Array and Atlantic Array zones in the Irish Sea and Bristol Channel respectively terminated their agreements with TCE after concluding technical challenges made the projects economically unviable. Off the UK south coast Navitus Bay faced strong local opposition from the beginning and despite revising the proposed layout, planning consent was refused in September 2015. The developer chose not to challenge the decision and also terminated its agreement with TCE.

For the remaining Round 3 zones it has been a different story with projects now making progress. The scale of the ambitions are substantial and it has been a changing picture as the make-up of the various owners of some of the zones has changed over time.

The three geographically largest zones are Dogger Bank, Hornsea and East Anglia, all in the North Sea. The potential scale meant development of various wind farms within each zone would be staggered. It is a complex picture and activity to date has mainly involved appraisal work and planning groundwork for onshore elements of the various projects. A notable milestone was recorded in February when Dong Energy announced that the FID had been made for its 1.2GW Hornsea Project One development.

With appraisal work underway along with the reorganising of options by the various developers an important announcement was made in March with TCE reporting it had reached agreements with developers ScottishPower Renewables, Vattenfall and Dong Energy which reconfigured or identified new projects within their respective Round 3 zones. The move follows the shift to development and delivery of projects following earlier phases.

The agreements include Dong Energy concluding reconfiguration of its Hornsea projects following acquisition of the remainder of the zone from Mainstream Renewable Power and Siemens Financial Services in 2015. Resulting projects are Hornsea Two, Three and Four with the previously identified Project Three split into two.

In August 2015 ScottishPower Renewables and Vattenfall announced they were to independently take forward projects within the East Anglia Zone, both now concluding joint zone related activities. One of ScottishPower Renewables’ projects, East Anglia ONE with a capacity of 714MW reached the all-important FID stage earlier this year; meanwhile its 1.2GW East Anglia THREE project is also in development. TCE also announced that East Anglia TWO and East Anglia ONE North (each up to 800MW) were also to be taken forward by ScottishPower Renewables.

Vattenfall is progressing with two projects in the northern part of the previous East Anglia Zone each with a capacity of 1.8GW. One of these, known as Tranche 1 includes parts of the seabed previously identified as East Anglia FOUR.

This leaves three other Round 3 sites to reflect on. Further north, the Forewind consortium is progressing with development of Dogger Bank Zone. Three tranches with a number of projects sites were identified, each with capacity of up to 1.2GW. Forewind has received development consent for an agreed target installed capacity of 4.8GW, the second of the two 2.4GW consents received in August 2015.

The three Scottish territorial waters projects are Beatrice (SSE Renewables), Inch Cape (Repsol Neuvas Energias UK Ltd) and Neart na Gaoithe (Mainstream Renewable Power Ltd) with a total award capacity of 2.97GW. Final Investment Decision for the 588MW Beatrice site is expected in 2016 while Inch Cape received Scottish Government consent for construction and operation late in 2014, Repsol continuing development of this project. Mainstream will deploy larger 6MW to 7MW turbines at Neart na Gaoithe with maximum capacity limited to 450MW, again the project is currently going through the various planning and consent stages.

Finally, reflection on Round 3 would not be complete without mention of smallest of the zones, and the one which is most advanced, E.ON’s Rampion Offshore Wind Farm off the Sussex coast. Similar to other projects, consultation resulted in reduction of the planned number of turbines from 195 to 116, with MHI Vestas V112-3.45MW turbines being selected. Earlier this year the first foundation was installed with actual turbine installation due to commence towards the end of this year. Potentially therefore after less than ten years since Round 3 was identified by TCE, first electricity could be produced from the very first site at Rampion during 2017.

By Peter Barker