Barriers to Deployment
The Scottish Government is aware of the continuing technological and administrative barriers to the deployment of offshore wind. Addressing the climate emergency and achieving our net-zero emission goals will mean that Scotland must find – and implement at reasonable cost – practical solutions to these issues. This needs to happen within timeframes that keep us on course for Scotland’s 2045 and interim targets, and meeting our 2030 target of meeting at least 50% of Scotland’s total energy needs from renewable sources, in a manner consistent with the timescales for building out large-scale offshore wind projects.
From project inception to full deployment can currently take up to 10 years; we need to work together, across industry and government, to reduce these timeframes, while maintaining the rigour of our planning and environmental impact assessment regime.
In order to do this, we must take a holistic approach. The excellent work and achievements to date have been driven by necessity and innovation, with site-by-site considerations requiring and eliciting bespoke solutions. The Scottish Government believes that a more universal and collaborative approach, capable of looking beyond individual sites and issues wherever possible, can help fully realise the potential of sustainable energy production within Scotland’s seas.
This will mean finding approaches and solutions which can be delivered at an affordable cost, thereby helping prevent these costs from deterring smaller companies from entering the market, and reducing Scotland’s wider attractiveness to the offshore wind sector, despite our tremendous resource. Doing so successfully can mean getting the most from our potential, and maximising renewable generation in line with both Scottish and UK Government ambitions, while with due regard to both the marine environment and other economic users of Scotland’s seas.
There is an established regulatory regime in the UK which requires the separation of offshore wind generation and transmission. Offshore Wind Transmission Owners (OFTOs), licensed by Ofgem following a competitive process, are responsible for the finance, maintenance, operation and ownership of an offshore development’s transmission assets.
Some studies have suggested that transmission tariffs have remained relatively steady, due to increases in turbine efficiency and capacity factors, as well as upgrades in cable capacity. However, the dramatic reduction in overall project costs achieved by offshore wind at the last two CfD allocation rounds places more pressure than ever on the costs attributable to the transmission assets and charges.
The Scottish Government has long argued that the transmission charging model was developed to deal with a different landscape; our increasingly decentralised electricity generation system, as well as the context of a climate emergency and the anticipated growth of electricity demand arising from decarbonisation, strengthen the case for its reform.
This context makes it all the more important to recognise and tackle the challenges associated with offshore wind connection and system costs in Scotland, to ensure fairness and a level playing field.
The Scottish Government is already taking steps to help tackle these costs. Part of our current £2 million offshore wind innovation and skill funding package, confirmed in September 2019, will be used to help Offshore Renewable Energy Catapult (OREC) and its partners deliver a project aimed at these issues.
This project aims to identify the constraints imposed on Scottish offshore wind deployment by existing grid infrastructure, and to quantify the benefits of grid upgrades – highlighting the potential for off-grid applications for Scottish offshore wind in general, and for floating wind in particular. It will also map future leasing areas to suitable grid connections and quantify grid constraints in terms of connection and transmission capacity, taking into account planned upgrades.
The pressure to achieve reductions in these areas is more acute in Scotland due to the higher transmission use of system (TnUOS) costs faced by generators here, as a result of their greater distance from GB’s main centres of demand in the south and south east of England. This means that processes such as Ofgem’s Targeted Charging Review must take fully into account their effects on renewables project costs, ensuring that these do not present barriers to investment and progress in Scotland – key to us addressing the climate emergency and delivering ‘net zero’.
Another challenge, as well as an opportunity, for the offshore wind sector will be the extent to which technological and regulatory innovation can enable generators to contribute to the supply of ancillary and other system operability and balancing services.
The potential impact on radar (defence radar in particular) is a significant constraint to offshore developments, and may, if unresolved, restrict the sector’s ability to contribute to our energy and delivery of our greenhouse gas emissions targets.
The Offshore Wind Sector Deal builds on the UK’s global leadership in offshore wind and aims to maximise the advantages for industry from the global shift to clean growth. It contains the following wording and commitment:
“..the UK is able to meet its national security obligations, and that its radars can operate effectively as the offshore wind sector expands in the coming years. This will include working in partnership with the sector on innovation activity and development of a technical solution”.
This is a positive move towards collaborative working, intended to deliver effective and enduring solutions. We aim to ensure that Scottish interests, including radar issues which affect developments both offshore and onshore, are considered fully and in a way which fits with Scotland’s timescales and ambitions.
The Scottish Government remains committed to continuing our strong working relationship with counterparts within the UK Government, Department for Transport, the Ministry of Defence, and with the developer community to establish and develop the enduring solutions that will be necessary. However, we recognise that short-term and/or temporary solutions may still be necessary to deploy projects in the short term.
Environmental and Planning Barriers
There are several environmental and planning barriers to future development, which will need to be addressed strategically as well as at a project level.
The Sustainability Appraisal process for Sectoral Marine Plans will identify plan-level mitigation measures to reduce, avoid or offset potential negative impacts arising from development. For example, this may include spatial planning within individual Plan Options to avoid areas of highest sensitivity, or directing that further project-level assessment is completed, once further details of individual project proposals are available to inform a meaningful assessment of the potential impacts.
The most recent licence and consent decisions for projects in the Moray Firth, Firth of Tay and Firth of Forth highlight concerns regarding the modelled in-combination impacts on key seabird species and highlight that the environmental carrying capacity in this region is highly constrained, based on current understanding of potential impacts. These concerns have also been raised and reflected in the Sustainability Appraisal for the 2019 draft Plan.
Marine Scotland and its advisors recognise that further work is required to address scientific uncertainty surrounding these potential biodiversity impacts before further development can progress in these regions. Stakeholders are now working together to identify the necessary steps and key actions required to address potential ‘knowledge gaps’ to allow advancement of our understanding of carrying capacity and other issues.
Environmental concerns may be identified during project-level assessment, and addressed at a project level by applying mitigation measures in areas including construction scheduling, installation/construction methods or adherence to best practice guidance. Implementation of these mitigation measures may be required via section 36 consent and/or marine licence conditions.
These conditions may require that the company and/or licence holder collects and submits post-consent monitoring data to Marine Scotland during the lifespan of the project. These monitoring requirements are usually articulated in the Project Environmental Monitoring Plan (“PEMP”) or similar document, which is developed in consultation with key stakeholders (such as SNH) and submitted for approval by Scottish Ministers prior to construction commencing.
These post-consent monitoring data can be used to inform future assessments and licence/consent decisions. For example, such data can provide further scientific certainty regarding the scale and type of potential environmental impacts.
As further offshore wind farm projects are constructed and become operational in the next few years, we expect further post-consent monitoring data to become available; for example, the European Offshore Wind Deployment Centre (EOWDC) and Beatrice Offshore Windfarm Limited (BOWL) are both fully operational, and construction activities are underway in the Moray Firth and Firth of Forth.
This type of post-consent monitoring, as well as considerations such as emerging assessment methodologies and best practice guidance, will be used to review and revise Sectoral Marine Plans. The Consenting and Licensing Manual for Offshore Wind, Wave and Tidal Energy Applications provides guidance on the application process, including pre-application engagement, which may help to identify and overcome potential barriers to development.
Interactions with other marine sectors/users
As the offshore wind industry grows, the potential competition for access to the Scottish Marine Area may cause conflict with other marine users. The sectoral marine planning process seeks to minimise these potential adverse impacts between sectors and identify opportunities for cooperation or increased alignment. However, there may still be competition for space with sectors such as commercial fishing, commercial shipping, and oil and gas (infrastructure and exploration).
The commercial fishing sector in particular is an important part of Scotland’s economy and cultural identity. These two sectors may often compete for access to areas, given the likely overlap between fishing activity and areas suitable for offshore wind development. The National Marine Plan sets out our policy to deliver sustainable development and to minimise impact on other users of the sea.
The views of local communities must also be considered and addressed. These can be linked to concerns over potential or perceived adverse seascape, landscape and visual impacts, and potential regional/local socio-economic impacts, depending on the location, nature and scale of the proposed development.
Dealing with these issues requires effective planning and detailed impact assessments, but also good communication and engagement from all sectors. Working together to resolve issues early will help to achieve our goals for renewable energy and minimise any impact on other sectors.
Contract for Difference (CfD) Framework and Innovation
The CfD auctions, run on behalf of the UK Government, have undoubtedly proved hugely successful in reducing costs in fixed-bottom offshore wind. However, the mechanism does little to support the supply chain or to help reduce the higher costs facing less developed technologies, including floating offshore wind.
The benefits of innovation reach far beyond cost reduction alone – continued research and development can improve health and safety standards and widen educational opportunities in offshore wind. There is also huge economic potential in developing our supply chain around new and innovative technologies, and creating first mover advantages, inward and export opportunities.
Scottish Ministers will continue to lobby the UK Government for an amended CfD regime which meaningfully and effectively targets and supports innovative technologies, including floating wind – exploiting the advantage and resource which Scotland has in these areas – and that supports supply chain development.
4. What are the key regulatory and cost challenges facing the offshore wind sector?
5. What more can the sector and other key stakeholders do to tackle these?
6. What should the key Scottish priorities be in relation to Air Defence Radar, and towards radar mitigation more generally?
7. What more can the Scottish Government do, working with industry and other stakeholders, to address ‘knowledge gaps’ in environmental assessments for potential offshore wind developments?
8. What steps can be taken to improve interactions between offshore wind and other marine sectors?
9. How could a competitive market framework that promotes the development of floating wind be developed whilst still retaining value for money for the consumer?