OSW0007

Written submission by SSE Renewables

 

About SSE Renewables

 

SSE Renewables (SSER) is a leading developer, owner and operator of renewable energy across the UK and Ireland, with an operational portfolio of around 4GW of onshore wind, offshore wind and hydro. Part of the FTSE-listed SSE plc, SSER’s strategy is to drive the transition to a zero-carbon

future through the world class development, construction and operation of renewable energy assets.

 

SSER’s operational offshore wind portfolio consists of 580MW across three offshore sites, two of which it operates on behalf of its joint venture partners. SSER has the largest offshore wind development pipeline in the UK and Ireland at over 7GW. Currently SSER is constructing two offshore wind farms in the UK, Seagreen 1 in the Firth of Forth which is just over 1GW; and Dogger Bank, a 50:50 joint venture between SSER and Equinor to build the world’s largest offshore wind farm at 3.6GW across three phases.

 

Introduction

 

SSE Renewables welcomes the Environmental Audit Select Committee’s inquiry into technological innovation and climate change with an initial focus on offshore wind. As one of the leading offshore wind developers, SSE Renewables has witnessed the transformation of the sector underpinned by innovation, investment and a stable policy framework. Due to the incredible cost reductions achieved in recent years and the ability to deliver reliable low carbon on time and at scale, it is now clear that offshore wind will provide the backbone of the future power system underpinning the move to net zero. The offshore wind sector’s achievements provide a useful example for Government to follow as it looks to develop other key technologies needed to deliver on net zero emissions by 2050.

 

Summary of key points:

 

 

 

 

 

How effective has the Government’s offshore wind Sector Deal been in moving the sector towards becoming an integral part of a low-cost, low-carbon, flexible grid system and boosting the productivity and competitiveness of the UK supply chain?

 

  1. The Offshore Wind Sector Deal between the UK Government and the Offshore Wind Industry Council (OWIC) was a significant milestone and a result of huge effort put in by all parties. The Sector Deal process brought the offshore wind industry together under the auspices of OWIC and reflected the maturity of the sector from one developing a nascent technology to one which is now expected to play a key role in the decarbonisation and development of the UK economy.

 

  1. The agreement of the Sector Deal kickstarted a joint industry-Government work programme to support the scale up of the offshore wind industry to provide a third of the UK’s power needs by 2030 whilst also delivering jobs, skills and economic opportunities up and down the country. Some of these workstreams are looking to address barriers to deployment, including consenting challenges; onshore and offshore grid development; and aviation radar issues. SSER is involved in all these workstreams.

 

  1. There are also important workstreams to develop UK supply chain and innovation. The Offshore Wind Growth Partnership (OWGP) has been established by the industry to identify and support the development of technology and supply chain opportunities. This is funded by developers successful in the CfD auctions. SSER’s project successful in AR3 will be paying several million pounds into the OWGP in coming years to support this work.

 

What level of output can the sector deliver in the UK, and what Government support would be needed to achieve this?

 

  1. The Offshore Wind Sector Deal was framed around a target of 30GW of offshore wind to be deployed by 2030. Whilst ambitious, this was never designed to be an upper limit of what the industry could deliver. Therefore, SSE Renewables supported increasing the target to 40GW by 2030. The Committee on Climate Change has helpfully set out that at least 75GW of offshore will be needed by 2050 to meet the UK’s net zero target. The results of CfD Allocation Round 3 with record-breaking low clearing prices provided further confidence that this can be done cost-effectively.

 

  1. SSE Renewables believes that delivering 40GW by 2030 is only feasible provided enabling actions are taken by governments, regulators and stakeholders. Such a significant ramp up in deployment requires a corresponding increase in capabilities and cooperation across government departments, regulators, Statutory Nature Bodies (SNCBs) as well as within the offshore wind industry. In short, a much more strategic approach to the build out of the UK’s offshore wind resource is needed to ensure it is done most cost-effectively and with minimum negative social and environmental impact.

 

  1. SSER recently published a high-level roadmap highlighting the nine main issues which need to be addressed[2]:

 

1)      Removing barriers to the consenting process

2)      Reform of electricity market design

3)      Promote deeper cross-departmental collaboration and resource to mitigate aviation radar constraints

4)      Develop a more efficient approach to development of the grid infrastructure needed to integrate offshore wind into the electricity system

5)      Annual CfD auctions

6)      More regular and increased seabed leasing volumes

7)      Strategic investment to support development of UK supply chain

8)      Strategy for floating wind

9)      Ensuring geographical diversity of the wind fleet

 

This submission elaborates on what SSER believes to be the main issues of interest to the Select Committee.

 

Improving the consenting process for offshore wind development

  1. The current process for developing an offshore wind farm project starting with seabed leasing from The Crown Estate and Crown Estate Scotland, to the DCO process for acquiring planning permission (and S36 in Scotland) continues to broadly work well. It provides for consultation with local communities, Statutory Nature Conservation Bodies and other stakeholders to ensure that offshore wind projects are developed in the most sensitive way. The DCO process is well designed because it provides statutory timelines to which developers, Local Authorities, PINs and BEIS work to.

 

  1. However, we are starting to see much more complex consenting issues, particularly with regards to cumulative impact issues on protected species under European Designations of Specially Protected Areas and Special Areas of Conservation (SPAs and SACs). The challenge is not made easier by the fact that different government departments are responsible for different parts of the process, although we note some recent improvements in coordination between departments. For example, DEFRA is legally responsible for designating SPAs and SACs. These designations then trigger a Review of Consents by the BEIS.

 

  1. The development of strategic studies for baseline characterisation and post consent monitoring will improve the evidence base to the sector and ultimately lead to better applications. In assessing the impacts of offshore wind projects, it is important that the latest scientific evidence is used and that cumulative impacts are assessed accurately. The impact of offshore wind projects should not be assessed in isolation and the impact of other industries should also be factored in e.g. fisheries.

 

  1. In some cases, a detrimental impact on some habitats will be unavoidable and a case for derogation to the Habitats Directive may need to be made. It is then important to have a coordinated approach across stakeholders to the compensatory measures which are required.

 

  1. Overall, SSER believes that a more strategic approach to marine spatial planning is needed with emphasis on the need for clear decisions to be made on allocation of use of sea space. SSER believes that prioritisation should be given to measures which can help combat climate change as well as protect biodiversity and conservation. For example, offshore wind development should be prioritised compared to other commercial users of the marine environment which do not have similarly positive impacts.

 

  1. Furthermore, SSER believes that it is vital that additional resource and expertise should be allocated to the various government departments and delivery bodies to ensure timely and cost-effective consenting of the volume of projects needed to deliver 40GW of offshore wind by 2030.

 

  1. In summary, the consenting regime needs to reflect that we are in a climate and ecological emergency and needs to enable action, such as appropriately sited offshore wind development.

 

Addressing aviation radar issues

 

  1. Some offshore wind farms have the potential to interfere with civilian or military aviation radar (air traffic control and air defence). The offshore wind industry has worked with DfT and MoD (supported by BEIS) to address these issues by putting in technical and non-technical mitigations on a project by project basis. However, due to extremely limited specialist MOD resource, the timeline for obtaining the necessary formal agreements is extremely protracted and results in additional financial risk to these projects.

 

  1. The industry is now working jointly with BEIS, DfT and MoD via a Sector Deal workstream to find an enduring industry-wide technical solution to address interreference. This is focused primarily on air defence radars but will have read-across to air traffic control. Good progress has been made in recent months but SSER would encourage all governments department involved to make sure that focus and commitment to finding this enduring solution is not lost; and that the same focus is given to ensuring that nearer-term offshore wind projects, such as those successful in AR3, can find sustainable, cost effective and reasonable mitigation.

 

More efficient development of the onshore and offshore grid

 

  1. The current regulatory approach to the development of the grid needed to bring offshore wind power back to the mainland and to demand centres has broadly worked efficiently. However, this was predicated on much more modest build out of offshore wind with point-to-point connections from each wind farm connecting to the National Grid. We are now seeing the step up in deployment of offshore wind which requires a new approach to the planning, coordination and execution of the grid, both onshore and offshore. SSER is involved in a Sector Deal work stream on the issue which is has informed work now underway by BEIS, Ofgem and National Grid ESO to identify what the improvements needed are and what regulatory changes it will require. It is important that this work is undertaken urgently given the lead time for implementing the changes and seeing benefits on the ground.

 

  1. The offshore wind sector is working to two time horizons. Firstly, there is consideration of what can be done to support deployment of 40GW of offshore wind by 2030 in the most efficient way. Secondly, there is build out to 75-100GW by 2050. SSER believes that a regulatory framework enabling transmission operators to make anticipatory investments in the grid infrastructure required to support future offshore wind developments will be key to both.

 

  1. The ESO, informed by policy requirements from Government, should identify the strategic grid needs and how offshore wind can be connected in the most cost-efficient and timely way. Currently we are seeing grid connection dates being offered for future offshore wind projects well into the 2030s which will mean that the volume of offshore wind needed to meet targets will not be met unless there is reform.

 

  1. The UK should also work closely with its North Sea neighbours to ensure that the build out of a North Sea grid, which could see hybrid offshore wind/interconnectors developed, is coordinated to unlock wind resource in the most efficient way to benefit energy consumers.

 

 

 

 

Ensuring geographical diversity of the wind fleet

 

  1. Most of the existing offshore wind fleet has been developed off the East coast of England, where many of the most cost-effective sites are located (shallow waters and near to shore). However, SSER believes that there will need to be more geographical diversity of the UK’s offshore wind fleet. As we move to much higher levels of offshore wind deployment, ensuring geographical diversity of the fleet will improve security of supply; avoid some of the environmental constraints seen in areas of high concentration; and see industrial and economic benefits spread more widely.

 

  1. A joined up and strategic approach to the development of the UK’s seabed is needed to ensure geographical diversity. Currently, offshore wind projects not located near to the South East of England, and particularly those in Scotland, are at a significant competitive disadvantage because they face much higher transmission charges. This is due to GB transmission charges being partly based on location, so the further a wind farm is from the largest geographical area of electricity demand (London and South East of England), the higher charges become. SSER believes that this locational element of transmission charging should be reviewed and reformed by Ofgem to ensure a levelling up between the South East of England and the rest of GB.

 

Boosting UK Supply chain

 

  1. Offshore wind developers, including SSER, are committed to increasing UK content in the supply chain by 2030 in line with the Sector Deal commitments. This builds on the huge success to date. For example, the Beatrice Offshore Wind Farm which was completed in 2019 is expected to generate £2.4bn of value for the UK economy from initial development to the end of its operational life. Of this around £1bn is expected to be created in Scotland.[3] Beatrice provides an excellent example of using local supply chain companies where possible. During development and construction, supply contracts were placed with local supply chain firms such as Global Energy Group at Nigg for turbine marshalling, CS Wind at Machrahanish for turbine towers, BiFab for jacket fabrication, Babcock for transformer platforms, RJ McLeod for onshore civil work, and GMR Henderson in Wick for a new Operations Base at the town’s harbour.

 

  1. Whilst there is a lot of focus on the capex investment of an offshore wind farm, the jobs and economic benefits of operations and maintenance shouldn’t be forgotten given they last 20+ years. For example, SSE Renewables and its Joint Venture partner Equinor recently announced that the Port of Tyne would host the O&M base for Dogger Bank Wind Farm, creating 200 jobs and lasting economic benefits for the north east of England.[4]

 

  1. The competitive nature of offshore wind development via CfD auctions, which focuses solely on delivering lowest cost, makes this very challenging. The challenge that UK companies face in competing within a rapidly growing global supply chain in component manufacturing where costs are significantly less than those in the UK cannot be underestimated. In some areas of the supply chain there is not currently the UK facilities or capability to bid cost competitively, particularly to support the next generation of offshore wind technology, such as turbines or HVDC transmission technology.

 

  1. It will be easier for the UK to improve its capability and competitiveness if the right strategic investment is made by Governments and the industry, particularly into key enabling infrastructure, such as ports and some manufacturing facilities. SSER and fellow developers provide information to inform this approach based on their efforts to use the domestic supply chain to date.

 

  1. Lastly, UK suppliers need to be in a position where they are competing for global contracts as offshore wind grows, rather than relying solely on contracts related to UK offshore wind projects. Government plays an important role, primarily via the support provided by the Department for International Trade.

 

 

How might the UK take advantage of further technological advances in offshore wind technology, particularly in relation to floating arrays?

 

  1. The current and near-term offshore wind projects are fixed to the seabed either with monopiles or jackets in deeper waters, which is a lot more cost-effective than floating wind technology. However, developing floating technology will be vital to meeting the scale of volume needed and improving the geographical diversity of the wind fleet. Floating technology is also key to making offshore wind globally significant as it will be deployable in deeper waters which are a feature of most coastlines in key markets. It means the export potential is greater for technology developed for the floating wind market in the UK.

 

  1. A floating wind strategy is needed from Government to ensure that the technology is developed and that UK supply chain opportunities are maximised. The recent consultation from BEIS on changes to the CfD scheme indicates a positive first step by setting out that floating wind will be able to bid separately from fixed bottom projects in future auctions. However, SSER would like to see BEIS set out the volume ambition for floating wind in the coming years to provide more certainty about the size of the market. This should be in line with industry projections e.g. Renewable UK and Scottish Renewables foresee 1-2GW by 2030.[5] A blend of grant funding and revenue support via CfDs is needed to enable investment in early floating projects and small arrays of up to 100MWs.

 

What support does the sector require to keep pace with the most cutting-edge innovations, such as in blade technology?

 

  1. One of the most impactful technology innovations seen has been in scaling up of offshore wind technology which has rapidly driven down costs.  The UK supply chain, supporting infrastructure and the sector’s capabilities need to scale up to accommodate future innovations and ensure that the UK can be a leader.  The UK needs to invest and future proof the industry.  Some examples of this:

 

-          Foundations supply chain - increased physical size of monopolies and jackets is leaving the UK supply chain stranded as they don’t have the tooling/capability/capacity. A recent OREC report – set out that investment is needed to equip the supply chain for next generation of projects.[6] 

 

-          Turbines – As offshore wind farms start using next generation turbines (12MW+), the UK must ensure that it has sufficiently sized manufacturing and port facilities to service this technology.

-          HVDC transmission technology – this will improve the efficiency of transporting offshore wind power to the national grid by minimising losses. Whilst HVDC technology is widely used globally for interconnectors and some offshore wind projects, it has not been used yet in the UK. Dogger Bank Wind Farm will be the first offshore wind farm in the UK to utilise HVDC. Currently there is no HVDC manufacturing capability in the UK. The UK needs to build capability and competitiveness in HVDC technology manufacturing as many future offshore wind projects will use this technology.

 

-          O&M – with the largest operating offshore wind fleet in the world, the UK has built up extensive O&M expertise. This area offers significant potential for automation, exploitation of digital technologies and leveraging UK academic expertise to allow the UK to have the most efficiently operated wind farms in the world, whilst offering the UK’s supply chain significant and valuable opportunities to export capabilities developed to other markets. Support of innovation in O&M, would deliver benefits for both the domestic offshore wind market and for the UK supply chain on a global stage.

 

  1. More granular innovation needs across all offshore wind technologies (fixed and floating) are well managed though forums such as the Offshore Wind Innovation Hub's (OWIH) Innovation Roadmaps and with programmes such as the Offshore Wind Accelerator managed by the Carbon Trust, and the Offshore Renewable Energy Catapult. These programmes have benefited from underpinning Government funding to enable their success and this should continue.

 

What is the UK industry doing to promote the sustainability of offshore wind arrays throughout their entire life-cycle from development through to decommissioning, and to improve maintenance and end-of-life repair?

 

  1. The overall lifetime sustainability of offshore wind arrays is incredibly important from supply chain through to end of life decommissioning. SSE’s environmental priorities are aligned with three UN Sustainable Development Goals on 1) climate action; 2) responsible consumption and production; and 3) the natural environment. SSER recently made the following commitments to:

 

 

  1. With regards to waste fibreglass and end of life components/materials, SSER recognises that there are currently limited opportunities within the UK market for responsible disposal, repurposing or re-use at scale.  In order to drive sustainability within the offshore industry, strategic 3rd party investment is required in order to deliver on these aspirations on a commercial scale.

 

  1. SSER is also engaged in developing a sustainable procurement strategy aligned to ISO 26000 (guidance on social responsibility) which will aim to drive improvements through its supply chain and contracting partners.

 

  1. In terms of maintenance, there is a lot of innovation taking place to ensure more efficient monitoring and repair, for instance through the use of Unmanned Aerial Vehicles (UAVs) which also improves safety and reduces emissions associated with boats having to take personnel out to sea.

 

  1. SSER supports better mapping of emissions associated with the supply chain of offshore wind farms with an initial step by BEIS and industry to find an appropriate methodology. This will improve transparency and efforts to improve the carbon footprint of the supply chain.

 

  1. SSER is undertaking a carbon footprint baseline assessment of Crew Transfer Vessel (CTV) usage across its operational portfolio and is keen to explore viable mechanisms for reducing the CO2 emissions associated with its activities.

 

How well is the UK industry managing the environmental and social impacts of offshore wind installations, particularly on coastal communities with transmission-cable landing sites?

 

  1. SSE Renewables, as a responsible developer, works to ensure that measures are put in place to minimise adverse environmental and social impacts of its developments. This is informed by consultation with communities and Statutory Nature Conservation Bodies.

 

  1. SSE Renewables also recently made several commitments related to the impact of its projects on ecology and biodiversity, moving from simply protection to enhancement of the natural environments. These commitments are:

 

 

  1. SSER recognises that there are challenges in order to deliver on these commitments owing to the range of environments in which its assets are situated, including marine and intertidal.  Whilst SSER are committed to working with external agencies and regulators in order successfully realise these ambitions, significant consultation and engagement will be required in order to deliver.

 

  1. In terms of transmission cable landing sites, SSER does its part to ensure that disruption on communities is minimised. It is the role of National Grid ESO to identify the best options for ensuring offshore wind farms are connected to the grid in the best place and that the necessary reinforcements can be undertaken onshore. As covered earlier in this submission, SSER believes that reform to the regulatory regime for offshore wind transmission development is needed and that this will also help to minimise disruption to communities and provide earlier clarity or where and when grid development will take place.

 

Looking to the future, what can the onshore wind sector learn from the offshore success story?

 

  1. The onshore wind sector can learn from the coordination which the offshore wind sector has undertaken via the Sector Deal process. However, it is worth noting that the onshore wind sector has developed a successful approach to community engagement and supply chain development over many years. This was undermined by a period of political uncertainty, but SSER is now hopeful that following BEIS confirmation of access to future CfD auctions the onshore wind sector and the benefits it brings will be reignited and will play a vital role in national, devolved and regional efforts to deliver net zero. We have learned from the offshore wind sector that a stable policy and market framework has enabled billions pounds of investment in to low carbon infrastructure which has delivered thousands of jobs and regeneration in coastal communities.

May 2020

 

[1] https://sse.com/media/669511/Delivering-40GW-of-offshore-wind-by-2030.pdf

[2] https://sse.com/media/669511/Delivering-40GW-of-offshore-wind-by-2030.pdf

[3] https://sse.com/media/624688/Beatrice-Economic-Report_FINAL_WEB.pdf

[4] https://doggerbank.com/downloads/Port-of-Tyne-to-become-base-for-worlds-largest-offshore-wind-farm-Dogger-Bank.pdf

[5] https://www.renewableuk.com/store/ViewProduct.aspx?id=15079206

[6] https://s3-eu-west-1.amazonaws.com/media.newore.catapult/app/uploads/2020/01/14164357/UK-OSW-Foundations-Strategic-Capability-Assessment-2019-v04.03.pdf