Innovation and Cost Reduction
Scotland’s Energy Strategy set out a commitment to continue our support for offshore wind innovation in Scotland. Since then, we have committed up to £4 million in this area, including £2 million in 2019/20 aimed specifically at reducing costs in the floating wind sector.
Innovation is a key priority in achieving sustainable growth. Scotland is already a world renowned hub for innovation in offshore wind. We are home to the world’s first floating offshore wind farm, Equinor’s 30 MW Hywind Scotland, with a second, the 50 MW Kincardine project, currently under construction.
The most powerful turbines in commercial operation in the world are located in waters off Aberdeen, at Vattenfall’s 93 MW European Offshore Wind Deployment Centre. The site demonstrates innovative foundations such as suction buckets – one of which was installed in a record breaking two hours and forty minutes.
The developments referred to above were made possible by unique legislation and support introduced by the Scottish Government in 2013. These changes supported offshore wind test and demonstration sites deploying innovative, new to market turbines, and pilot projects consisting of non-fixed turbines.
The legislation in question, which enabled Scotland to use Renewable Obligation Certificates to deliver demonstration projects, has since been closed by the UK Government. The higher costs of floating wind mean that without similar intervention or additional support (e.g. through changes to the successor CfD mechanism), this technology is unlikely to develop at the rate or scale required to retain early mover advantages and to exploit supply chain growth opportunities. A recent report by Strathclyde University underlines Scotland’s lead, but also the challenges facing the sector.
The Offshore Wind Sector Deal includes commitments from industry to support grid transformation, co-fund investment into research and development alongside UK Government, and to drive innovation in the UK supply chain. Scotland’s potential – for floating offshore wind in particular (see below) – depends on these ambitions being delivered successfully.
Floating Offshore Wind
Floating wind pilot projects and test and demonstration sites are beginning to grow across the world. Indeed, Scotland has led the way here, hosting the first such project, Hywind Scotland, near Peterhead. Floating wind’s ability to become cost competitive with fixed bottom structures will require continued effort and innovation.
Scotland’s unique deep water profile and high, consistent wind resource means that our waters are ideally suited to floating wind. The Committee on Climate Change (CCC) report in May 2019, which includes a scenario requiring 75 GW of offshore wind in UK waters by 2050 to achieve net zero, suggests that we are likely to need floating wind in our energy system earlier than previously anticipated.
The Oil and Gas industry drive to decarbonise production, via Oil and Gas UK’s ‘Route Map 2035’, seeks to eliminate more than 15 MtCO2e of emissions associated. The sector is looking closely at Equinor’s Project Tampen, which will deploy 11 floating turbines to decarbonise the production of two adjacent oil and gas fields. The drive to make the UKCS the World’s first ‘net zero basin’ by 2035 offers potential to drive new investment into floating wind innovation in Scotland’s waters.
Scotland’s Programme for Government 2019 announced Scottish Government funding of £1 million for the Floating Wind Technology Acceleration Competition, in partnership with Carbon Trust. This will invite companies to propose innovative solutions to some of the key technical challenges facing the sector.
The Scottish Government is also funding OREC to deliver a number of floating wind focused projects, such as the recently announced Scottish Floating Centre of Excellence. The Centre will bring together industry, Governments and academia to host a range of projects, including innovation challenges, to maximise the economic benefit of floating wind to Scotland and we understand it to be attracting strong industry interest.
Fixed Offshore Wind
Fixed-bottom offshore wind has seen incredible cost reduction in recent years, and increase in turbine sizes – helped in part by Scottish Government support for the Carbon Trust Offshore Wind Accelerator programme. This underlines the effectiveness of strategic government intervention during a time when the sector was less mature.
However, scope for innovation in fixed offshore wind remains, particularly in key areas such as turbines, operations and maintenance – balancing the development potential alongside the needs of the marine environment and other users of the sea.
Although Sectoral Marine Plans will seek only to identify sites suitable for projects with a generating capacity greater than 100 MW, the Scottish Government remains committed to considering opportunities for local, small-scale and innovative offshore wind development within Scottish waters. We recommend early and proactive engagement with Crown Estate Scotland, Marine Scotland and other stakeholders (as appropriate) to discuss any such development proposals.
Future rounds of offshore wind development also present the opportunity to explore options for ‘hybrid projects’ – i.e. sharing transmission infrastructure and assets between projects. This approach may offer potential cost and space savings, as well as potential reductions in environmental impacts.
However, there are legal and regulatory barriers that would need to be addressed prior to deployment. We would encourage developers to consider this approach early in their project planning stages, and discuss with Marine Scotland and other developers and operators as early as possible.
Synergies with other Sectors
Developers are becoming increasingly interested in the concept of using electricity generated from offshore wind resources to produce large scale green hydrogen via electrolysis. This technology is also referred to as ‘power-to-gas’.
We are assessing our policy response to this opportunity as part of a wider hydrogen assessment project, which will inform the publication of a Hydrogen Action Plan for Scotland during 2020.
Oil and Gas
Our oil and gas industry and heritage can provide much of the expertise and skills to support our transition to a different energy future. Scotland’s oil and gas sector has 40 years’ experience of operating in the North Sea, and possesses vital subsea skills which can help overcome the engineering and innovation challenges presented by the move to a low carbon future.
For example, Scotland’s oil and gas industry has developed a cluster of companies with world class expertise in underwater engineering – approximately half of the subsea installations in the world today are in the North Sea, a strength that can be developed even further. Scotland has the necessary competitive advantage and the building blocks – a skilled, committed workforce, excellent port infrastructure and a strong innovation hub.
The sector also has extensive experience in heavy steel and concrete fabrication, the movement and placing of large structures on the sea bed, sub-sea engineering, trenching and cabling, marinisation of offshore plant and working in a hazardous environment within health and safety (HSE) guidelines. It also has access to onshore infrastructure which could be shared – including general service vessels, jack-up rigs and accommodation vessels, as well as geophysical survey kit and sea trenching plant.
The sector’s considerable experience in the operation and maintenance of offshore structures, both above and below the sea surface, is also valuable. There is vast specialist knowledge in such matters as corrosion protection, remote monitoring, transfer and support of personnel, mitigation of adverse weather and sea conditions, and diving operations.
The sector has huge experience of managing large complex projects, surmounting planning and consenting hurdles, undertaking environmental audits and site assessments, managing logistics, training and so on. There are experts in business models and operational methods, reliability and availability enhancement, contractual arrangements, compliance procedures, safety management, cost and pricing structures, funding mechanisms, etc. which could be utilised for the continued development and growth of offshore wind.
There is also scope to reduce the offshore wind sector’s development and operational costs. The oil and gas sector has made great progress in managing costs and improving efficiencies, and its experience could benefit the offshore wind sector in terms of managing costs and delivery of considerable project benefits.
As the floating wind example demonstrates, the energy transition also creates opportunities to more closely connect all forms of offshore energy production. The Oil and Gas Authority (OGA) has started an Energy Integration Project to explore the potential for a more integrated offshore energy sector, including innovative and closer links between oil and gas production and offshore renewables. This encompasses offshore hydrogen production and transportation, as well as carbon capture, transport and storage.
20. What can the Scottish Government most usefully and feasibly do to build on the innovation support previously and currently available?
21. How can we support technologies and developments which reach a viable stage between leasing rounds and CfD auctions?
22. Where respondents believe that scope remains for innovation in fixed offshore wind, what areas should be prioritised?
23. What actions should be taken to address the key challenges facing the uptake of commercial scale floating in Scotland?
24. What can be done, on the part of government and / or others, to strengthen and benefit from the synergies with a) hydrogen and b) the oil and gas sector?
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