03 March 2021

The UK offshore wind sector has recently received a furore of publicity after taking centre stage in both the government’s Ten Point Plan and Energy White Paper. With increasing pressure for the country to 'build back greener' when recovering from the COVID-19 pandemic and in order to achieve the UK’s target of reaching Net Zero by 2050, there are many new opportunities for the UK offshore wind market.

In this series of articles we will explore a range of new technologies and innovations which may be required to harness the true power of offshore wind and some opportunities and challenges which may be faced along the way. We will look at issues facing the supply chain, the rise of floating wind, the exciting role hydrogen integration may have as well as considering the increasing need for greater co-ordination between offshore projects and the potential for developing a shared grid infrastructure. 

A brief history of offshore wind

It was back in 2000 that the UK’s first offshore windfarm, Blyth windfarm, consisting of two Vestas 2MW turbines, was erected 1km off the coast of Northumberland. Over the next 20 years the capacity of UK offshore wind increased at a rapid pace with significant innovations in construction, operation and the wider technology from 4MW to 10.4GW and in October 2020 the UK Government pledged a commitment to quadruple the UK offshore capacity by 2030 to 40GW. There are now 38 operational windfarms off the coast of the UK with four currently under construction, five in development and a further six projects have recently been successful in the Crown Estate Round 4 lease auction, subject to the outcome of a Habitats Regulation Assessment. The industry also awaits the announcement of the Scotwind auction (which is currently delayed to allow for the option structure to be reviewed) later this year.

Although initial development in offshore wind was slow, the last 10 years has seen triple the amount of offshore windfarms being commissioned than the previous decade, and there is now a strong pipeline of further projects. Much of this growth can be attributed to economies of scale and the development of technology required to build the windfarms, driven by the pressure to reduce costs from the competitive contract for difference system introduced from 2014. The latest projects are significantly upsized from their early ancestors, with the latest wind farm, Hornsea One, boasting 174 turbines with a rotor diameter of 178m and capacity of over 1GW, compared to Blyth’s humble 2 turbines with a 66m rotor diameter generating just 4MW. The engineering and construction innovations required to achieve this have been significant and it is this continued drive towards innovation that puts floating offshore wind and hydrogen on the forefront of the technologies’ capabilities.

Opportunities and challenges to the industry

1. Supply chain issues

Whilst offshore wind is a green energy provider, the construction and operation of an offshore wind project has a substantial carbon footprint. In the pursuit for a net zero industry, a decarbonised supply chain has a significant role to play.

Supply chain availability has long been an issue for a sector with comparatively limited technology providers. Ensuring that the preferred contractor has sufficient construction capacity to deliver any key technology in line with the required programme is vital to a successful project. The advent of longer blades and larger turbines will help lower the cost of energy to the consumer as they can capture more wind and run at higher capacity. However, as turbines increase in size so must the ports in which they are constructed and the vessels on which they are transported. We are already seeing contractors preparing for the next generation of turbines with Jan De Nul ordering the construction of bigger jack up vessels to handle ever increasing turbine sizes. 

Availability of supply is not only a capacity issue but can be integral as to whether a project can proceed or not. The UK’s increasing focus for localised supply chains and jobs to be used/created can be a real challenge for the sector and international contractors particularly where there is completion of components in other jurisdictions. There is currently encouragement from the UK Government and local authorities for investment in and permanent staffing of industrial clusters in the UK by sector participants that can help to facilitate the needs of UK offshore wind. 

2. New technology

The popularity of offshore windfarms as a key source of renewable energy and the development of larger and stronger technology presents its own challenges to the sector. Traditional bottom-fixed windfarms can usually only be built in water depths of up to 60m and therefore this limits the scope of the area for building fixed offshore windfarms. Floating Wind provides a solution to this problem as floating windfarms can be constructed on-shore and floated out to much greater depths as well as accessing areas with greater wind speeds.

Renewables are a great source of energy but they provide intermittent generation. The UK electricity system is having and will have to deal with this going forwards as even more wind and solar is built. Flexibility in terms of generation and storage is going to be crucial in years to come and thus far, in terms of storage, batteries have dominated the market. Recently, energy companies have started to look closely at the role that hydrogen electrolysis units can play converting the surplus generation or indeed the day to day generation into 'green' hydrogen which can either be used for transport, heat or gas and industrial fuel or can later be converted back into electricity when required. In early 2021, a consortium of ITM Power, Ørsted, Siemens Gamesa and Element Energy were awarded €5,000,000 in funding to demonstrate a combined wind turbine and electrolyser system to operate in a marine setting, CIP is also looking to develop into the space having recently signed an MoU with Arla, Danish Crown and DNG to build a power-to-x facility to convert power from offshore turbines to green ammonia. The advent of this technology could revolutionise the use of offshore wind, the way it is constructed and the way that power is produced if with green hydrogen being exported rather than transmitting power to the grid directly as well as assisting with decarbonising the industry.

3. Transmission infrastructure upgrades

Traditional windfarms each connect into their own substations and export cables a 'point to point' connection. As more windfarms are constructed and commissioned the number of cables and off-shore and on-shore substations has also increased, and resulting in clusters of wind farms being constructed with their own cable route, and relating grid infrastructure. With the increasing number of projects, this old method of construction has presented issues on space, impact on the mainland landscape and the potential issue of overlapping cables. The industry and government are increasingly aware of this issue with the creation of an improved (localised) offshore transmission network being considered. The increased focus on how projects can be most efficiently constructed is reflected in Ofgem’s recent consultation on levels of coordination in the development of the offshore transmission network, with the outcome of such consultation due to be announced in the coming months. This of course will have its own challenges for the OFTO market and how future divestment of transmission assets could be divested if they are shared between projects.

The coming years look to be an exciting time of innovation for the industry which comes with its own challenges and opportunities. Given the progress to date it is clear that participants within the sector are well placed to harness the harness the challenges. Over this series of articles we will consider in more detail each of the points raised in this article, starting with an exploration of the challenges facing the supply chain, including decarbonisation and availability.

In the meantime we would be happy to discuss any queries or thoughts you may have on any points raised above. Our construction team and wider offshore wind team is well placed to advise on all aspects of a project from cradle to grave. Please get in touch with Lloyd James or your usual Burges Salmon contact.

This article was written by Lloyd James and Craig Bruce.

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Lloyd James

Lloyd James Partner

  • Construction and Engineering
  • Energy and Utilities 
  • Infrastructure

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