OSW0035

Written response from UK Research and Innovation

1. UK Research and Innovation (UKRI) works in partnership with universities, research organisations, businesses, charities, and government to create the best possible environment for research and innovation to flourish. We aim to maximise the contribution of each of our component parts, working individually and collectively. We work with our many partners to benefit everyone through knowledge, talent and ideas.

2. Operating across the whole of the UK with a combined budget of more than £7 billion, UKRI brings together the seven research councils, Innovate UK and Research England.

Q1. 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?

3. The Sector Deal has played a critical role in giving industry confidence at a time when it was looking to government for policy support to continue investment in large-scale deployment. Industry has been particularly encouraged by the government’s commitment, within the Sector Deal, to run regular Contracts for Difference auctions - the primary mechanism for supporting low carbon generation - using up to £557 million for this purpose. This commitment will help strengthen the UK’s position as a world leader by providing long-term certainty to business.

4. Acting upon the Sector Deal’s recommendations, in June 2019, the Offshore Wind Industry Council launched the Offshore Wind Growth Partnership. The Partnership is a long-term business transformation programme to encourage closer collaboration across the supply chain, to implement structured productivity improvement programmes and to facilitate shared growth opportunities between developers and the supply chain[1]. The government and the sector have also worked closely together to develop Regional Clusters and to appoint a Diversity Champion[2]. These initiatives are in their early days and the impact and success of these is not yet known.

5. Cost reductions continue apace with 2019 CfD prices below £40/MWh. The sector has exceeded the expectations of the 2012 Offshore Wind Cost Reduction Task Force Report of bringing the cost of energy down to £100 per MWh by 2020. These cost reductions have been brought about mainly by measures introduced before the Sector Deal was agreed, for instance the Renewables Obligation Certificates issued to accredited renewable generators and more recently Contracts for Difference.

Q2. What level of output can the sector deliver in the UK, and what Government support would be needed to achieve this?

6. The 2017 Future UK Employment in the Offshore Wind Industry Report found that by 2032, the total amount of direct employment in the UK offshore wind sector could be in the region of 21,000 full-time equivalent jobs, with an additional 37,000 FTE jobs in indirect employment relating to the industry. The report estimated that the sector had the potential to grow to around 60,000 FTE jobs in the UK by 2032, as against an estimated 10,000 at that time[3].

7. At present, approximately 50% of the value of a UK offshore wind farm is retained within the UK. This is achieved primarily through the c.20 years of operations over the lifespan of the wind farm. Large capital items such as the turbines and foundations, however, are typically imported from overseas. The Sector Deal has committed to increasing lifetime UK content to 60% by 2030, including increases in the capital expenditure phase. Encouraging new UK businesses to enter the offshore wind supply chain, and helping existing players to grow can help deliver this target. The growth of the sector in the UK over the past two decades has been driven by innovation. Future operational improvements and cost reductions rely on continued investment in R&D to new technologies, including digital and robotic technologies for surveying and operations and maintenance.

8. The sector has been tasked with delivering 50GW of installed capacity by 2050 and has ambitions to achieve this target before then. Continued policy signals that support this target will enable continued investment.

Q3. How might the UK take advantage of further technological advances in offshore wind technology, particularly in relation to floating arrays?

9. In terms of its benefits in domestic power supply, commercially competitive floating wind would allow for the development new sites in deeper water closer to shore. This would open up more areas of the seabed, while limiting the current operational challenges and health and safety risks associated with people working far from shore.

10. Many countries around the world do not benefit, as the UK does, from an area of relatively shallow sea around its coast. Becoming a world-leader on floating wind technology and know-how will unlock opportunities in new global markets as other countries seek to maximise the opportunities presented by offshore wind.

11. The UK currently has the largest installed capacity of offshore wind in the world, and has amassed significant operational experience and expertise. We are seeing significant amounts of innovation in technologies that improve operations and maintenance practices, including autonomous and robotics systems that reduce cost and the time needed to operate offshore. This is exemplified by the successes of companies such as Rovco, a Bristol-based firm supported by Innovate UK and the Offshore Renewable Energy Catapult that is creating 70 high-skilled jobs and has accessed a £20 million market after developing its subsea autonomous inspection technology coupled with machine learning[4]. The technology being developed by Rovco has the potential to lower the cost of subsea inspections by 80%.

Q4. What support does the sector require to keep pace with the most cutting-edge innovations, such as in blade technology?

12. The Offshore Wind Innovation Hub, jointly set up by BEIS and Innovate UK and delivered by ORE Catapult, has developed a series of technical roadmaps that are reviewed and updated regularly. These roadmaps, which have been developed with the support of industry, provide both government and industry with a single, validated source of information on the key challenges and innovation priorities within the UK offshore wind sector. They help identify to innovators and the supply chain where there are potential market opportunities within the UK offshore wind sector, and provide funders and potential applicants with an evidence base for demonstrating the areas of the UK offshore wind sector that have a demand for innovation[5].

13. The cost reductions seen through the CfD auction prices is for wind farms that will be built in the middle of this decade. The bids were developed in the expectation of further cost reductions from future innovation. Continued support of innovation in offshore wind technologies will ensure that these prices can be offered and will enable UK businesses to grow.

14. The Offshore Renewable Energy Catapult continues to have an important role to play in connecting the industry with government, helping to draw out the best innovations from SMEs and academia, operating world class test facilities and acting as a trusted partner to the sector.

Q5. 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?

15. To understand how to make offshore wind arrays more sustainable through their entire lifecycle, we need to know what happens to these structures when emplaced into the marine environment. Through the ‘Influence of Man-made Structures In The Ecosystem’ programme[6], NERC and the Centre for Environment, Fisheries & Aquaculture Science (Cefas) are investing £5 million to address critical gaps in scientific understanding of the role man-made structures play in the North Sea ecosystem structure and function, providing evidence to support the most suitable environmental management for decommissioning energy infrastructure. Projects will work in partnership and with support from industry and government agency partners, taking advantage of raw data available from industry through the industry-funded Data Initiative. The outcomes will be directly relevant to off-shore wind businesses in the planning, installation and decommissioning of offshore wind infrastructure.

16. UK industry was integral to the £1.5M NERC Marine Renewable Energy Knowledge Exchange Programme[7], which catalysed the development of partnerships between the research base and businesses, regulators and policymakers to accelerate the uptake of research to inform the sector in five focus areas relevant to environmental sustainability: uncertainty and risk; cumulative impact assessment; underwater noise; cost effective monitoring; and data access and management.

17. Innovate UK has received a number of applications for funding to support blade recycling innovation. This remains an area of opportunity as limited innovation has taken place in this field to date. Industry has also begun exploring innovation opportunities around life extension and repowering of offshore wind farms coming to the end of their lives, although such ambitions are inherently challenging due to the increase in the size of turbines since the first offshore wind farms were installed.

Q6. 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?

18. Environmental and social impacts are key aspects of Environmental Impact Assessment planning application documentation. Onshore impacts are one of the categories examined. Impacts can be positive and include the regeneration of port facilities, the creation of jobs in the local area, local economic growth and strengthened grid infrastructure.

19. Industry and the research base continue to collaborate on projects that seek to improve understanding of the environmental impacts of offshore wind installations. For example, a number of innovation projects funded through NERC’s ‘Innovative Monitoring Approaches’ funding call include several projects related to renewables, including one exploring how to forecast avian collision risks at offshore wind farms[8].

20. Industry is also closely engaged with current UKRI efforts to boost skills and capability in engineering and environmental sciences to address these issues. The Aura Centre for Doctoral Training in Offshore Wind Energy and the Environment, led by the University of Hull, is working closely with over 20 industry partners to create PhD scholarships in offshore wind energy and the environment[9]. Research themes are informed by the needs of industry and include the research theme “environmental interactions, seabed dynamics and benthic habitat”.

Q7. How well is Government policy supporting innovation in transmission technology to improve the efficiency of electricity transmission?

21. As the UK transitions to becoming a net-zero emissions economy by 2050, having the power transmission infrastructure capable of delivering energy safely while meeting growing demand is vital. This challenge of upgrading this infrastructure presents a window of opportunity for UK businesses seeking to develop innovative technologies that help bring about efficiencies and operational improvements domestically with the potential to be exported globally. To this end, the government should seek to cultivate links with leading UK-based cables suppliers and to encourage them to engage more proactively with the funding opportunities available, including those offered by UKRI, to help de-risk this activity.

22. Wind farm developers will typically carry out an options analysis of whether to use high-voltage direct current (HVDC) over more conventional AC transmission lines. Any such assessment will take into account the distance of the site from the shore (for wind farms located further out to sea, HVDC transmission may be seen as a more suitable option) as well as factor such as cable capacity and wind farm design. Some overseas wind farms have been innovating with aluminium core array cables, and the industry as a whole is pushing the boundaries of transmission voltage. This, however, is more of an economic options analysis rather than an assessment of whether or not to deploy innovative technology.

Q8. Looking to the future, what can the onshore wind sector learn from the offshore success story?

23. Offshore wind is built on the successful demonstration and commercialisation of onshore wind technology. It allows for turbine and farm sizes to be scaled in a way that is not possible onshore. It also does not suffer from the same planning challenges as onshore wind. However, offshore wind is more complex and costly than onshore wind and has only been able to become competitive because of the sustained political and financial support the sector has received from government. Working in partnership with industry, sustained public investment in the sector has been critical in leveraging equally substantial private investment.

24. Onshore wind in the UK has suffered setbacks from the changes to planning policy introduced by the government in June 2015, the effect of which has been to impede onshore wind in favour of other technologies.

25. It is important that policy makers are reminded of the substantial technological differences between offshore and onshore wind, which – despite some superficial similarities – are in fact two distinct categories of energy production, each with a different set of future projections and each requiring its own, specific set of policy interventions.

May 2020

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