Relaxation of the constraints that dictate where offshore windfarms can be built could cut £16billion from the overall cost of developing UK offshore wind, the Carbon Trust claims.
Calling for an endeavour as big as the “dash for gas” in the 1990s, the organisation says that applying all current constraints would require the UK’s next round of offshore windfarms to be built at great expense 70 miles from the shore and in deep waters.
Indeed, the trust believes that allowing windfarms to be built nearer to the shore and in shallower waters is the key cost-saving measure that will enable 29GW of offshore windfarms to be built by 2020. This, in turn, will help the UK meet renewable energy targets, cut carbon emissions by 14%, create 70,000 new jobs and bolster energy security.
However, without urgent action from Government to reduce the costs and risks and increase returns to developers, the UK will only build a quarter of the 29GW of offshore windfarms needed to reach the 2020 target, the Carbon Trust warns.
But the trust says it will be necessary for Government and industry to work together to reduce the required investment to deploy 29GW of offshore wind by up to £30billion (40%) by 2020.
A just-published Carbon Trust study advocates “two key actions” to reduce cost:
Make the most economic windfarm sites available, without negatively impacting economic and environmental concerns, to reduce the investment required.
Catalyse a reduction in the technology costs with up to £600million of public and £1.2billion of private UK research, development and deployment (RD&D) funding with a view to leveraging up to £14billion of savings on total investment.
Despite pushing for such a huge RD&D spend, the Carbon Trust wants the UK to allow Germany to get ahead in the deepwater projects race so that British interests don’t have to bear the cost of developing suitable foundation systems, despite having the huge experience of the North Sea oil&gas industry at their elbow, if they so wish.
Tom Delay, CEO of the trust, said in a statement: “If we are to meet our 2020 renewable targets, we need a dash for wind on a comparable scale to the dash for gas of the 1990s. Slashing the costs of offshore wind must now be a priority for UK energy policy.
“The Government must use the upcoming consultation on this important issue to unlock the most economically attractive sites for development. This would dramatically reduce the cost of development – essential if we are going to meet our 2020 renewable targets and deliver significant reductions in our carbon emissions.
“We have laid out a series of measures to ensure the offshore wind industry delivers at scale over the next 12 years. What’s more, the benefits of fast-tracking the commercialisation of this new industry are far-reaching in terms of employment, energy security and the economy as a whole”
Besides the two key actions, the trust is calling for a co-ordinated and well defined process for bringing developers and other relevant parties together in a way that ensures that the right trade-offs are negotiated, and at a regional or national level rather than on a site-by-site basis.
Two events in June, 2008, suggest that this could be achieved in the very near future: the BWEA signed a Memorandum of Understanding with BERR, the MoD and CAA to address radar issues, and the Crown Estate announced plans to co-invest in planning applications for Round Three.
These negotiations need to be successfully completed over the next few months, in time for the secretary of state’s decision in spring 2009 on the acceptable level of impact of offshore wind development and to dovetail into the Crown Estate’s decisions on bids for Zone Development Partners by the first quarter of 2009.
The quango also wants grid and planning regulatory reform and claims that this will deliver big savings and make deployment easier.
“Adding 40GW of onshore and offshore wind will require grid network transmission upgrade costs of circa £2billion unless the current capacity is shared,” says the report.
“The Government’s proposed ‘connect and manage’ approach in its Transmission Access Review (TAR) would address these issues. However, some generators have a vested interested in the status quo. “The Government will need to show strong leadership in implementing its proposed policies.”
The Carbon Trust does not name the companies, but Energy understands Scotland would be particularly affected should reforms not be brought about.
“The report continues: “To deliver the grid connections for 40GW of onshore and offshore wind by 2020 will also require significant improvements to grid regulations. As well as ‘connect and manage’, network criteria for reinforcement will need to be updated and transmission licensees will need to be allowed to undertake network investment in anticipation of demand from wind generators.
“The biggest regulatory barrier to delivery by 2020 is the current planning regulations, which have historically created delays of seven to 10 years, and which would result in the UK missing its 2020 renewable energy targets by a wide margin.
“The proposed Infrastructure Planning Commission (IPC) and associated National Policy Statements (NPS) processes will theoretically cut this time to under three years (including application, pre-consents and consents).
“However, strong leadership will again be required from the Government to implement these recommendations without compromising the underlying efficiency of their proposals.”
The Carbon Trust warns that the “nimby” (not in my back yard) brigade could hijack offshore wind, as they did onshore, with the result that many projects have been seriously delayed or cancelled.
“Although offshore wind is likely to provoke fewer nimby concerns, especially given the proposed seaward buffer zone, there is still a small, but significant, risk that negative perception may act as a barrier to growth.
“Visual impact, the need for environmental trade-offs and the high costs of offshore wind may all be used as arguments against offshore wind.
“The Government should tackle this proactively rather than reactively, ensuring that communities see the benefits of offshore wind at a local level and communicating to the public the trade-offs that have been made.”
The trust calls for the setting up of test facilities and demonstration sites. It suggests that the UK Government, the Crown Estate, developers and manufacturers should make test facilities and demonstrations sites available for developing new offshore wind technology, particularly new foundation designs and advances in turbine technology such as direct-drive generators and new blade designs.
These testing facilities and demonstration sites will be particularly useful to new market entrants, who will need to prove their technology’s reliability if they are to be able to scale up to mass deployment.
There is already one such project in gestation that should comprehensively answer the Carbon Trust’s concern in this regard. It also wants ports around the UK coastline to play their part in the offshore wind revolution, and there is a warning that, if they don’t grasp the nettle, foreign competitors will. Further, the trust advocates that public money be made available for improvements.
“While offshore windfarms could conceivably be installed from continental ports, UK ports will be required for operations and maintenance.
“Improved port facilities would catalyse UK-based installation companies, who could gain a competitive advantage by developing lower-cost, faster installation techniques to complement new foundation designs.
“A combination of public and private funding will be required to support UK port development, similar to the East of England Development Agency’s £8.7million funding for the £50million new outer harbour at Great Yarmouth (Eastport).
“Catalysing the installation and O&M market in the UK could create 25,000-30,000 jobs and £4billion in revenues (equal to half the current North Sea oil&gas employment).”
Energy hopes that similar action will be taken in Scotland to encourage and underpin key offshore-industry ports to engage – or risk being bypassed.
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