Scenario mapping for offshore renewable energy development economic benefits: case studies

Report to identify, measure and value the delivered and potential economic impact for Scotland from offshore wind and tidal energy projects.


4. As-is analysis

4.1. Beatrice Offshore Wind Farm

Scottish supply chain used for Beatrice wind farm included the following:

  • A number of activities during the development phase were carried out in Scotland, including SSE’s internal project management, and some of the surveys.
  • Wick was selected as the OMS base, and the port of Nigg was used as an installation port.
  • BiFab supplied 26 of the jacket foundations for the project.

We drew primarily on SSE’s published report by Biggar Economics on the economic impacts of Beatrice[2].

The costs used for the Beatrice project were based on figures for a similar UK project. We adjusted the costs to reflect the differences between this original project and the Beatrice project using BVGA’s experience of cost modelling.

Scottish and content

Our analysis of Beatrice wind farm shows that the overall Scottish content for the project was 29.6%, of which the local content was 11.7%. Figure 1 and Table 1 show these figures broken down by area of supply chain. It includes both generation and dedicated transmission assets. Expenditure on transmission assets ultimately owned by the OFTO is included in balance of plant, installation and commissioning, and OMS, as appropriate.

The highest Scottish content is in project development and management, where 68.5% of the total spend was in Scotland.

The highest local content was in OMS, where 21% of the spend was local.

Figure 1. Scottish and local content in Beatrice Offshore Wind Farm by supply chain category.
A analysis of Beatrice wind farm showing the overall Scottish content figures broken down by area of supply chain in percentages. The pie chart shows that the  overall Scottish content for the project was 29.6% and that 11.7% was local content with the remainder being non-Scottish. As described in table 1.
Table 1 Scottish and local content in Beatrice Offshore Wind Farm by supply chain category.
Level 1 category % of total Territory % of category % of total Territory % of category % of total
Development and project management 6.4% Scotland 68.5% 4.4% Local 1.2% 0.1%
Non-Scotland 31.5% 2% Rest of Scotland 67.4% 4.3%
Turbine supply 16.8% Scotland 0% 0% Local 0% 0%
Non-Scotland 100% 16.8% Rest of Scotland 0% 0%
Balance of plant 14.6% Scotland 13.8% 2% Local 1.6% 0.2%
Non-Scotland 86.2% 12.5% Rest of Scotland 12.1% 1.8%
Installation and commissioning 13.4% Scotland 18.8% 2.5% Local 12.7% 1.7%
Non-Scotland 81.2% 10.9% Rest of Scotland 6.1% 0.8%
Operation, maintenance and service 45.5% Scotland 43.2% 19.7% Local 21% 9.5%
Non-Scotland 56.8% 25.8% Rest of Scotland 22.2% 10.1%
Decommissioning 3.4% Scotland 31% 1.1% Local 5% 0.2%
Non-Scotland 69% 2.4% Rest of Scotland 26% 0.9%
Total 100% Scotland 29.6% 29.6% Local 11.7% 11.7%
Non-Scotland 70.4% 70.4% Rest of Scotland 17.9% 17.9%

GVA, earnings and employment

Table 2 summarises the economic impact on Scotland and locally from the Beatrice project.

Gross value-added

We concluded that Beatrice will generate about £1,300 million direct, indirect and induced GVA in Scotland, of which £444 million is local, over the lifetime of the wind farm. Figure 2 shows that Scottish GVA peaks at £175 million in 2018. The main contributors are balance of plant, mainly from turbine and substation foundations, and installation and commissioning, mainly from the construction of the onshore substation and cable route.

OMS will generate the greatest amount of Scottish GVA at £850 million, comprising 24% direct, 59% indirect and 17% induced GVA (see Figure 3). OMS will create £360 million locally.

Table 2 Summary of direct, indirect and induced economic impacts generated by Beatrice Offshore Wind Farm.
  Scotland Local
Impact Direct Indirect Induced Total Direct Indirect Induced Total
Value-added (millions) £422 £643 £235 £1,300 £309 £113 £22 £444
Earnings (millions) £256 £180 £70 £506 £189 £31 £7 £227
FTE years 4,830 4,980 1,810 11,620 3,970 880 220 5,070
Figure 2. Gross-value added generated in Scotland by Beatrice Offshore wind farm split by supply chain area.
A graph showing the gross-value added generated in Scotland by Beatrice Offshore wind farm split by supply chain area from 2013 to 2044 showing a rise in gross value increasing in 2017 to 2019 and then falling in 2020. The values range from £0 to £200m. As described in table 2.
Figure 3. Gross-value added generated in Scotland by Beatrice Offshore Wind Farm by direct, indirect and induced impact.
A graph showing the gross-value added generated in Scotland by Beatrice Offshore wind farm split by direct, indirect and induced from 2013 to 2044 showing a rise in gross value increasing in 2017 to 2019 and then falling in 2020. The values range from £0 to £200m. As described in table 2.

Employment

Over the lifetime of the wind farm 11,620 FTE years will have been created in Scotland, of which 5,070 will have been local. The number of FTEs created each year between 2014 and 2044, broken down by supply chain, is shown in Figure 4.

Scottish FTEs peaked in the construction and installation phase in 2018, when 1,800 FTE years were created. This comprised 56% direct, 26% indirect and 18% induced FTE years (see Figure 5).

OMS will create around 7,400 FTE years over the lifetime of Beatrice, including the permanent local work force, developer back office functions and periodic work on the wind farm. 4,070 of these OMS jobs will be local.

Figure 4. Full-time equivalent years employment created in Scotland by Beatrice Offshore Wind Farm by supply chain area.
A graph showing the full-time equivalent years employment created in Scotland by Beatrice Offshore Wind Farm by supply chain area from 2013 to 2044 showing a rise in gross value increasing in 2017 to 2019 and then falling in 2020. The values range from £0 to £200m. As described in table 2.
Figure 5. Full-time equivalent years employment created in Scotland by Beatrice Offshore Wind Farm by direct, indirect and induced impact.
A graph showing the full-time equivalent years employment created in Scotland by Beatrice Offshore Wind Farm by direct, indirect and induced impact from 2013 to 2044 showing a rise in gross value increasing in 2017 to 2019 and then falling in 2020. The values range from £0 to £200m. As described in table 2.

4.2. Neart Na Gaoithe Offshore Wind Farm

Scottish supply chain used for NNG offshore wind farm includes the following:

  • The assembly of the turbines will be carried out in Port of Dundee.
  • BiFab will fabricate eight of the jacket foundations.
  • Eyemouth Harbour will be the OMS base.

We drew on publicly available information about contracts placed, which was used to validate the modelling.

The costs used for the NNG project were based on figures for a similar UK project. We adjusted the costs to reflect the differences between this original project and the NNG project using BVGA’s own experience of cost modelling.

Scottish and local content

Our analysis of NNG shows that the overall Scottish content for the project was 29.3% and that 11.9% was local content. Figure 6 and Table 3 show these figures broken down by area of supply chain.

The largest Scottish content by percentage is in project development and management, where 59.6% of the total spend in the category was in Scotland. Although Scottish content is only 44.5% for OMS, the large lifetime spend means OMS delivers the largest total value to the Scottish supply chain. OMS also provide the highest local content, at 21%.

Figure 6. Scottish and local content in Neart Na Gaoithe Offshore Wind Farm by supply chain category.
Figure 6. A pie chart showing the analysis of Scottish and local content in Neart Na Gaoithe Offshore Wind Farm by supply chain category. The pie chart shows that the  overall Scottish content for the project was 29.3% and that 11.9% was local content with the remainder being non-Scottish. As described in table 3.
Table 3 Scottish and local content in Neart Na Gaoithe Offshore Wind Farm by supply chain category.
Level 1 category % of total Territory % of category % of Territory total % of category % of total
Development and project management 6.3% Scotland 59.6% 3.8% Local 0.7% 0%
Non-Scotland 40.4% 2.6% Rest of Scotland 58.8% 3.8%
Turbine supply 12.3% Scotland 0% 0% Local 0% 0%
Non-Scotland 100% 14.8% Rest of Scotland 0% 0%
Balance of plant 14.6% Scotland 11.6% 1.9% Local 1.6% 0.3%
Non-Scotland 88.4% 14.6% Rest of Scotland 10% 1.6%
Installation and commissioning 13.4% Scotland 18.8% 2.5% Local 12.7% 1.7%
Non-Scotland 81.2% 10.9% Rest of Scotland 6.1% 0.8%
Operation, maintenance and service 45.5% Scotland 44.5% 20.2% Local 21% 9.5%
Non-Scotland 55.5% 25.2% Rest of Scotland 23.5% 10.7%
Decommissioning 3.4% Scotland 31% 1.1% Local 10% 0.3%
Non-Scotland 69% 2.4% Rest of Scotland 21% 0.7%
Total 100% Scotland 29.3% 29.3% Local 11.9% 11.9%
Non-Scotland 70.7% 70.7% Rest of Scotland 17.5% 17.5%

GVA, earnings and employment

Table 4 summarises the economic impact locally and on Scotland from the NNG project.

Gross-value added

NNG will generate £980 million direct, indirect and induced GVA in Scotland over the lifetime of the wind farm, of which £342 million will be local.

Figure 7 shows that Scottish GVA peaks during the construction and installation phase in 2021, at around £120 million.

Over the lifetime OMS generates the greatest amount of Scottish and local GVA at £670 million and £275 million respectively, comprising of 25% direct, 58% indirect and 17% induced GVA (see Figure 8).

Table 4 Summary of direct, Indirect and induced economic impact generated by Neart Na Gaoithe Offshore Wind Farm.
Scotland Local
Impact Direct Indirect Induced Total Direct Indirect Induced Total
Value-added (millions) £320 £483 £177 £980 £236 £89 £17 £342
Earnings (millions) £194 £135 £53 £382 £145 £24 £5 £174
FTE years 3,700 3,940 1,400 9,040 3,030 710 170 3,910
Figure 7. Gross-value added generated in Scotland by Neart Na Gaoithe Offshore Wind Farm split by supply chain area.
Figure 7. A graph showing the gross-value added generated in Scotland Neart Na Gaoithe Offshore Wind Farm split by supply chain area from 2013 to 2048 showing a rise in gross value increasing in 2017 to 2019 and then falling in 2020. The values range from £0 to £150m. As described in table 4.
Figure 8 Gross-value added generated in Scotland by Neart Na Gaoithe Offshore Wind Farm by direct, indirect and induced impact.
Figure 8. A graph showing the gross-value added generated in Scotland by Neart Na Gaoithe Offshore Wind Farm split by direct, indirect and induced from 2013 to 2048 showing a rise in gross value increasing in 2017 to 2019 and then falling in 2020. The values range from £0 to £150m. As described in table 2.

Employment

Over the lifetime of the wind farm 9,040 FTE years will be created in Scotland, of which 3,910 will have been local. The number of FTE years created each year between 2017 and 2048, broken down by supply chain, is shown in Figure 9. Scottish FTE years peak in the construction and installation phase in 2021, when 1,270 FTE years will be created. This comprises 56% direct, 26% indirect and 28% induced FTE years (see Figure 10).

OMS will create 6,100 FTE years over the lifetime of NNG in Scotland, and this includes the permanent local work force, developer back office functions and periodic work on the wind farm. OMS will create 3,110 FTE years locally.

Figure 9. Full-time equivalent years employment created in Scotland by Neart Na Gaoithe Offshore Wind Farm by supply chain area.
Figure 9. A graph showing the full-time equivalent years employment created in Scotland by Neart Na Gaoithe Offshore Wind Farm by supply chain area from 2013 to 2044 showing a rise in gross value increasing in 2017 to 2019 and then falling in 2020. The values range from 0 to 1500 FTEs.
Figure 10. Full-time equivalent years employment created in Scotland by Neart Na Gaoithe Offshore Wind Farm by direct, indirect and induced impact.
Figure 10. A graph showing the gross-value added generated in Scotland by Neart Na Gaoithe Offshore Wind Farm split by direct, indirect and induced from 2013 to 2044 showing a rise in gross value increasing in 2020 to 2022 and then falling in 2023. The values range from 0 to 1500 FTEs.

4.3 Hywind Scotland

Scottish supply chain used for Hywind Scotland offshore wind farm included the following:

  • The suction anchors were fabricated by Isleburn.
  • The trenching for the export cable was undertaken by Fugro UK from Aberdeen.
  • The offshore cable installation engineering was undertaken by Subsea 7 from Aberdeen.

Equinor provided us with some information about suppliers used and contracts placed, as well as some information around costs.

The costs used for the Hywind Scotland project were based on a percentage breakdown of cost provided by Equinor for the project and adjusted and validated using BVGA’s own experience of offshore wind farm cost modelling.

Hywind Scotland is a demonstration project. It is unlikely that a commercial scale project would be delivered in the same way and this would have implications for the selection of Scottish suppliers.

Scottish and local content

The overall Scottish content for the project was 19.9%. The local content was 9%. Figure 11 and Table 5 show these figures broken down by area of supply chain. It includes both generation and transmission assets.

The largest Scottish content by percentage is in OMS, where 42.4% of the total spend in the category was in Scotland.

Figure 11. Scottish and local content in Hywind Scotland by supply chain category.
Figure 11. A pie chart showing the analysis of Scottish and local content in Hywind Scotland Offshore Wind Farm by supply chain category. The pie chart shows that the  overall Scottish content for the project was 19.9% and that 9% was local content with the remainder being non-Scottish.
Table 5 Scottish and local content in Hywind Scotland by supply chain category.
Level 1 category % of total Territory % of category % of total Territory % of category % of total
Development and project management 11.1% Scotland 0% 0% Local 0% 0%
Non-Scotland 100% 11.1% Rest of Scotland 0% 0%
Turbine supply 15.0% Scotland 0% 0% Local 0% 0%
Non-Scotland 100% 15% Rest of Scotland 0% 0%
Balance of plant 21.0% Scotland 18.3% 3.9% Local 0.9% 0.2%
Non-Scotland 81.7% 17.2% Rest of Scotland 17.4% 3.7%
Installation and commissioning 17.6% Scotland 12.7% 2.2% Local 11.9% 2.1%
Non-Scotland 87.3% 15.3% Rest of Scotland 0.7% 0.1%
Operation, maintenance and service 31.0% Scotland 42.4% 13.1% Local 20.2% 6.3%
Non-Scotland 57.6% 17.9% Rest of Scotland 22.2% 6.9%
Decommissioning 4.4% Scotland 16% 0.7% Local 10% 0.4%
Non-Scotland 84% 3.7% Rest of Scotland 6.0% 0.3%
Total 100% Scotland 19.9% 19.9% Local 9% 9%
Non-Scotland 80.1% 80.1% Rest of Scotland 10.9% 10.9%

GVA, earnings and employment

The economic impacts have been assessed between 2015 and 2038, which is the projected decommissioning date for Hywind Scotland. Table 6 summarises the impact of the wind farm over Hywind Scotland’s lifetime.

Gross-value added

Hywind Scotland will generate £68 million direct, indirect and induced GVA in Scotland over the lifetime of the wind farm, of which £26 million will be generated locally. GVA peaked during the construction and installation phase in 2016, at around £13 million (see Figure 12).

Over the lifetime OMS generates the greatest amount of GVA at £41 million, comprising of 25% direct, 58% indirect and 17% induced GVA (see Figure 13). Locally this would generate £17 million.

Table 6 Summary of direct, Indirect and induced economic impact generated by Hywind Scotland.
  Scotland Local
Impact Direct Indirect Induced Total Direct Indirect Induced Total
Value-added (millions) £24 £31 £13 £68 £15 £10 £1 £26
Earnings (millions) £14 £9 £4 £27 £9 £3 £0.5 £12.5
FTE years 310 270 110 690 185 95 15 295
Figure 12. Gross-value added split generated by Hywind Scotland by supply chain area.
Figure 12. A graph showing the gross-value added generated in Hywind Scotland Offshore Wind Farm split by supply chain area from 2015 to 2038 showing a rise in gross value increasing in 2016 to 2017 and then falling in 2019. The values range from £0 to £150m. As described in table 6.
Figure 13. Gross-value added generated in Scotland by Hywind Scotland by direct, indirect and induced impact
Figure 13. A graph showing the gross-value added generated by Hywind Scotland Offshore Wind Farm split by direct, indirect and induced from 2013 to 2038 showing a rise in gross value increasing in 2016 to 2017 and then falling in 2019. The values range from £0 to £15m. As described in table 6.

Employment

Over the lifetime of the wind farm 690 FTE years will have been created in Scotland, of which 295 are local. The number of FTEs created in Scotland each year between 2014 and 2038, broken down by supply chain, is shown in Figure 14.

FTE years in Scotland peak in the construction and installation phase in 2016, when 152 FTE years were created. This comprises 64% direct, 18% indirect and 18% induced FTE years (see Figure 15).

OMS will create 375 FTE years in Scotland over the lifetime of the wind farm, and this includes the permanent local work force, developer back office functions and periodic work on the wind farm. Of these, 190 will be local.

Figure 14. Full-time equivalent years employment created in Scotland by Hywind Scotland by supply chain area.
Figure 14. A graph showing the full-time equivalent years employment created by Hywind Scotland Offshore Wind Farm by supply chain area from 2013 to 2038 showing a rise in gross value increasing in 2017 to 2019 and then falling in 2020. The values range from 0 to 200 FTEs. As described in table 6.
Figure 15. Full-time equivalent years employment created in Scotland by Hywind Scotland by direct, indirect and induced impact
Figure 15. A graph showing the gross-value added generated by Hywind Scotland Offshore Wind Farm split by direct, indirect and induced from 2013 to 2038 showing a rise in gross value increasing in 2020 to 2022 and then falling in 2023. The values range from 0 to 1500 FTEs. As described in table 6.

4.4. MeyGen Phase 1A

Scottish supply chain used for MeyGen Phase 1A includes:

  • A large part of the fabrication of the turbine support structure work was undertaken by Global Energy Group.
  • The fabrication of the ballast blocks for the turbine support structure was mainly carried out by JGC.
  • Fabrication and assembly of the one of the turbines was performed in Scotland.
  • More than half of the project delivery work by MeyGen was carried out in Scotland.
  • SHEPD installed 15km of 33kV onshore cable.

We had access to cost data and content information used in a previous study for HIE, which was used to inform and validate our modelling. The costs used for the MeyGen Phase 1A project were based on costs provided by the developer of the project.

MeyGen Phase 1A is a demonstration project, and therefore procurement decisions might not be representative of a commercial scale tidal project.

Scottish and local content

Our analysis of MeyGen shows that the overall Scottish content for the project was 40%, of which the local content was 14.5%. Figure 16 and Table 7 show these figures broken down by area of supply chain. It includes both generation and transmission assets.

The largest Scottish content by percentage is in development and project management, where 70.7% of the total spend in the category was in Scotland. Although Scottish content is only 44.6% for OMS, the large lifetime spend means OMS delivers the largest total value to the Scottish supply chain.

Figure 16 Scottish and local content in MeyGen Phase 1A by supply chain category.
Figure 16. A pie chart showing the analysis of Scottish and local content in MeyGen Phase 1 by supply chain category. The pie chart shows that the  overall Scottish content for the project was 40% and that 14.5% was local content with the remainder being non-Scottish.
Table 7 Scottish and local content in MeyGen Phase 1A by supply chain category.
Level 1 category % of total Territory % of category % of total Territory % of category % of total
Development and project management 5.7% Scotland 70.7% 4% Local 1.7% 0.1%
Non-Scotland 29.3% 1.7% Rest of Scotland 69% 3.9%
Turbine supply 21.1% Scotland 5% 1.1% Local 3.7% 0.8%
Non-Scotland 95% 20.1% Rest of Scotland 1.3% 0.3%
Balance of plant 11.2% Scotland 55.5% 6.2% Local 2.1% 0.2%
Non-Scotland 44.5% 5% Rest of Scotland 53.4% 6%
Installation and commissioning 20.8% Scotland 46.2% 9.6% Local 30.9% 6.4%
Non-Scotland 53.8% 11.2% Rest of Scotland 15.3% 3.2%
Operation, maintenance and service 27.7% Scotland 44.6% 12.4% Local 22.8% 6.3%
Non-Scotland 55.4% 15.3% Rest of Scotland 21.8% 6%
Decommissioning 13.5% Scotland 50.2% 6.8% Local 5% 0.7%
Non-Scotland 49.8% 6.7% Rest of Scotland 45.2% 6.1%
Total 100% Scotland 40% 40% Local 14.5% 14.5%
Non-Scotland 60% 60% Rest of Scotland 25.5% 25.5%

GVA, earnings and employment

Table 8 summarises the economic impact of MeyGen Phase 1A locally and in Scotland.

Gross-value added

MeyGen will generate £41 million direct, indirect and induced GVA in Scotland over the lifetime of the project, of which £13.5 million will be generated locally. GVA in Scotland peaked during the construction and installation phase in 2016, at around £11 million (see Figure 17)

Over the lifetime OMS generates the greatest amount of GVA in Scotland at £13 million, comprising of 42% direct, 39% indirect and 19% induced GVA (see Figure 18). OMS would create £4 million locally.

Table 8 Summary of direct, Indirect and induced economic impact generated by MeyGen Phase 1A.
Scotland Local
Impact Direct Indirect Induced Total Direct Indirect Induced Total
Value-added (millions) £17 £16 £8 £41 £6 £7 £0.5 £13
Earnings (millions) £5 £9 £2 £16 £2 £4 £0.5 £6.5
FTE years 170 260 90 520 60 110 5 175
Figure 17. Gross-value added split generated by MeyGen Phase 1A by supply chain area.
Figure 17. A graph showing the gross-value added generated in MeyGen Phase split by supply chain area from 2013 to 2048 showing a rise in gross value increasing in 2016 to 2017 and then falling in 2018. The values range from £0 to £12m. As described in table 8.
Figure 18. Gross-value added generated in Scotland by MeyGen Phase 1A by direct, indirect and induced impact
Figure 18. A graph showing the gross-value added generated by MeyGen Phase split by direct, indirect and induced from 2013 to 2043 showing a rise in gross value increasing in 2016 to 2017 and then falling in 2018. The values range from £0 to £12m. As described in table 8.

Employment

Over the lifetime of the project 520 FTE years will have been created in Scotland, of which 175 are local. The number of FTE years created in Scotland each year between 2013 and 2043, broken down by supply chain, is shown in Figure 19.

FTEs peak in the construction and installation phase in 2016, when 130 FTEs were created. This comprises 27% direct, 56% indirect and 17% induced FTEs (see Figure 20).

OMS will create 180 FTE years over the lifetime of project in Scotland, and this includes the permanent local work force, developer back office functions and periodic work on the project. Of those, 75 FTE years will be local.

Figure 19. Full-time equivalent years employment created in Scotland by MeyGen Phase 1A by supply chain area.
Figure 19. A graph showing the full-time equivalent years employment created by MeyGen Phase by supply chain area from 2013 to 2043 showing a rise in gross value increasing in 2016 to 2017 and then falling in 2018. The values range from 0 to 1500 FTEs. As described in table 8.
Figure 20. Full-time equivalent years employment created in Scotland by MeyGen Phase 1A by direct, indirect and induced impact.
Figure 20. A graph showing the gross-value added generated by MeyGen Phase split by direct, indirect and induced from 2013 to 2043 showing a rise in gross value increasing in 2016 to 2017 and then falling in 2018. The values range from 0 to 1500 FTEs. As described in table 8.

Contact

Email: ScotMER@gov.scot

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