Information

Offshore renewable energy: decommissioning guidance for Scottish waters

Guidance to assist developers / owners of offshore renewable energy installations in Scotland to understand their decommissioning obligations under the Energy Act 2004.


Annex C Decommissioning programme template

Version Number: 1

Date issued:

Decommissioning Programme Template

For Offshore Renewable Energy Installations

Document control

Insert tables of document revisions as per example below:

Approvals
Name Signature Date
Prepared by
Reviewed by
Approved by
Revision Control
Revision No Reference Changes Issue Date
0 First draft
1
2
Final Version

Table of contents

1 Executive summary

2 Introduction

3 Background information

3. Removal and disposal methods

4 Description of items to be decommissioned

5 Description of proposed decommissioning measures

6 Environmental impact assessment

7 Consultations and interested party consultations

8 Costs

9 Financial security

10 Schedule

11 Project management and verification

12 Sea-bed clearance

13 Restoration of the site

14 Post-decommissioning monitoring, maintenance and management of the site

15 Supporting studies

Appendix 1 – Consultee responses

Figures and tables

Include a table or list of Figures and Tables used in the document.

Terms and abbreviations

Include a table of the terms and abbreviations used in the document (examples in blue below).

Term / Abbreviation Explanation
CfD Contract for Difference
EIA Report Environmental Impact Assessment Report

Delete options and brackets where appropriate. Remove red help text throughout document and replace blue example text with actual content.

1. Executive summary

A summary should be provided, highlighting the essential features of the proposed decommissioning programme:

This document has been prepared by <insert name of company> and contains the decommissioning programme(s) for <insert overview of what the decommissioning programme covers>.

This decommissioning programme is being submitted for approval in accordance with the requirements of the Energy Act 2004.

In conjunction with public, stakeholder and regulatory consultation, the decommissioning programme(s) is submitted in compliance with national and international regulations and Scottish Government guidelines. The schedule outlined in this document is for a <insert number> year decommissioning project programme due to begin in <insert date that decommissioning is currently envisaged to begin>.

2. Introduction

A brief introduction should be included in the initial programme and updated when the programme is reviewed. The introduction should state the companies that are party to the programme and describe their ownership status.

3. Background information

Relevant background information should be provided, supported by diagrams, including:

  • the layout of the infrastructure to be decommissioned
  • the relative location, type and status of any other adjacent facilities (e.g. telephone cables, pipelines and platforms) which would have to be taken into consideration
  • information on prevailing weather conditions, sea states, currents, sea-bed conditions, water depths relevant to consideration of the proposed decommissioning programme
  • any fishing, shipping and other activity in the area
  • the names and locations of an Special Areas of Conservation ("SAC") or candidate SAC (under the Habitats Directive) and/or Special Protection Areas ("SPA") or proposed SPA (under the Birds Directive) that may be affected by the decommissioning programme
  • any other background information relevant to consideration of the draft decommissioning programme

The <insert development name> wind farm / tidal array / wave device is located at <location>. It was <granted consent under Section 36 of the Electricity Act 1989 / a marine licence in> <month & year>. The development was installed in and was commissioned in <insert dates>. Production of electricity is due to cease in <year>.

<Development name> is a <insert number of devices and maximum capacity or a description of the development> situated in <insert m> water depth. Electricity was exported from the development to <insert location>. <Add a description of any other features of the development>

Following public, stakeholder and regulatory consultation, the decommissioning programme is submitted in full compliance with the Scottish Ministers' guidelines. The decommissioning programme explains the principles of the removal activities and is supported by an environmental impact assessment (and information to inform a habitats regulations appraisal, if required).

4. Description of items to be decommissioned

A full description should be provided, supported by diagrams, of all items associated with the generating station to be decommissioned, including:

a) Renewable Energy Installations

  • renewable energy devices / test devices, including any foundations, support structures, towers, anchor blocks, turbines and ancillary equipment
  • offshore substations, including foundations, support structures, topside structures and ancillary equipment;
  • meteorological masts
  • materials which may have been placed on the sea-bed, for example for scour protection, including rock, grout bags, sandbags and mattresses
Table 4.1: Renewable Energy Installations and Stabilisation Features
Installations* including Stabilisation Features Number Size / Weight (Te) Location(s)** Comments / Status***
<Wind / wave / tidal> Turbine(s) <X> <X> Tonnes each <e.g. All turbines are currently operational but will be… The turbines are attached to X with X>
Meteorological Masts
Foundation(s) - <type – e.g. Jacket, pin pile, gravity base etc.> <X> <structure is piled to seabed by X steel piles>
<Mooring lines and Anchors> <X>
Concrete mattresses <X> <X> Tonnes each
Rock
Grout bags
Sandbags

* turbines / foundations etc.

** location to be given in WGS84 decimal of a minute (3 decimal places) format

*** indicate in comments / status the known status of the installation / object, e.g. are turbines operational or non-operational, how are foundations attached to sea bed, etc.

b) Related lines

  • <List and describe all Electric lines / cables, including inter-turbine cables, inter-substation cables and export cables>
Table 4.2 Subsea Cables
Description Cable Number (as per X) Diameter (inches) Length (km) Description of Component Parts From – To End Points Burial Status Cable Status
Inter-array cable Trenched with 7 m section exposed Operational
Export cable Surface laid Operational
Inter-substation cable Trenched and buried Operational
Table 4.3: Subsea cable stabilisation features
Stabilisation Feature Total Number Weight (Te) Location(s) Exposed / Buried / Condition
Concrete mattresses 5 6 tonnes each buried
Concrete mattresses 20 10 x 6 tonnes 10 x 8 tonnes
Grout bags
Formwork
Frond Mats
Rock Dump
Other (describe briefly)

5. Description of proposed decommissioning measures

This section should set out the proposed measures to be taken for decommissioning the installation. The programme should be sufficiently detailed, from the outset, to demonstrate that the decommissioning has been fully considered and factored into design decisions and that a valuable decommissioning strategy has been developed. The methods of decommissioning should be in line with the best possible methods available at the time of drafting and there should be an assumption that objects will be removed. This section should cover:

  • Any planned phasing integration

Consideration may be given to the potential for beneficial phasing / integration of decommissioning activity between operators in order to realise any economies of scale that may be possible.

  • Proposed method of removal

You must be able to demonstrate how you have taken on board and are in line with:

  • policy considerations
  • Environmental impact assessment requirements
  • safety of surface and subsurface navigation; - other uses of the sea
  • health and safety considerations
  • Proposed waste management solutions

This section should specify:

  • which elements of the installation will be taken back to land for reuse, recycling, other recovery (e.g. incineration with energy recovery) or disposal
  • which (if any) materials from the installation are likely to be reused at sea
  • Details of any items which may be left in situ following decommissioning

Decommissioning programmes should start from the presumption of total removal. Where, in exceptional circumstances, non-removal or partial removal of items is proposed, the programme must state why this is considered to be the best option, through evaluation of the following matters (drawn from the IMO standards as set out in Chapter 7):

Predicted degradation, movement and stability of any remains.

This section should be completed in line with the principles set out in Chapter 7 (Decommissioning Methods) of this guidance

6. Environmental impact assessment

Early iterations of this section should be informed by the EIA report submitted with the original application for consent / marine licence and should be proportionate to the activities proposed. However, this will require to be updated nearer the actual time of decommissioning as appropriate.

Mitigation measures should also be outlined here.

Environmental sensitivities (summary)

Table 6.1 Environmental sensitivities
Environmental Receptor Main Features
Ecosystem impacts
Seabed
Fish
Fisheries
Marine mammals
Birds
Other users of the sea (risks to human health, cultural heritage, accidents and disasters)?
Atmosphere
<add additional rows for site specific issues>

7. Consultations and interested parties

The decommissioning programme should describe the consultation process employed. It should provide a summary table (as per that set out below) of the consultations undertaken with interested parties (the Scottish Ministers would recommend using the same or equivalent consultees used for the marine licence application, some example consultees are listed below in blue) and explain the extent to which their views have been taken into account in the programme or influenced the decision making process (in the action taken column). Relevant correspondence (including copies of the public notice and correspondence from consultees) should be annexed to the programme.

Table 7.1 summary of stakeholder comments
Who Comment Action taken
Scottish Fishermen's Federation
NatureScot
SEPA
Historic Environment Scotland
The Maritime and Coastguard Agency
The Northern Lighthouse Board
Public
Scottish Government departments
Crown Estate Scotland
The Secretary of State*

* where Section 105 (1C) applies

8. Costs

The responsible person will be expected to provide a confidential annex setting out the following:

  • the Scottish Ministers will require financial models as approved via the developer / operators' governance structure, including payments of debt financing / financing structure prior to construction commencing, in order to assess financial security requirements
  • 3 years of accounts for all operators involved in the OREI, including Parent Companies;
  • the business plan for the project
  • full funding model, detailing when the senior lenders will be paid back;
  • a cash flow for the life of the project
  • a robust overall cost estimate in line with Chapter 8, in £ sterling, of the proposed decommissioning measures. It should explain the basis on which the estimate is made, including a breakdown into major component parts

The responsible person must complete the tables below when submitting decommissioning programmes. If decommissioning is assumed to be taking place over multiple years, costs should be set out per individual year.

Work Package Year 20X6 £'000 Year 20X7 £'000 Description of work to be undertaken (including for example vessel day rates, number of turbines etc)
Preparation of Assets      
Removal of generators      
Removal of Foundations      
Removal of offshore substations      
Decommissioning of cables      
Seabed clearance and restoration      
Recycling and Waste Management[13]      
Monitoring      
Other      
VAT*      
Exchange Rate Fluctuation**      
Inflation***      
Optimism Bias****      
Contingency*****      
Total Security per year      
Total Overall Security Fund      

Costs should be reviewed in line with decommissioning review timelines and altered as required. This includes any changes to the VAT rate, exchange rate and inflation.

The responsible person should not offset scrappage value from their total cost assumptions.

*VAT

Unlike the responsible person, the Scottish Government has no exemption from VAT should it fall to them to decommission. Therefore, to allow for the possibility of the Scottish Government having to decommission infrastructure in internal waters and/or the territorial sea, VAT will have to be factored into financial securities.

The VAT regime only applies within territorial waters (i.e. up to 12 nautical miles from the shore baseline). Projects primarily located outside of territorial waters will therefore need to set out how they have calculated VAT for a limited proportion of their decommissioning costs (for example removal of cables within territorial waters, and any on-land recycling or disposal costs).

Costs £'000 Description of costs
Costs within territorial waters    
VAT (20%) Cost    
Costs outwith territorial waters    

** Exchange rate fluctuations

For any decommissioning works to be undertaken outwith the sterling area / paid for in non-sterling currency, exchange rate hedging should be applied. Guidance is included within HM Treasury's 'Managing Public Money'.

Steps taken to manage exchange rate fluctuations

Text here

*** Inflation calculator

The responsible person should ensure that inflation over the lifetime of the project is included within the security. The rate at which inflation should be assessed is the OBR forecast for inflation as measured by the CPI.

Inflation should be forecast until the proposed date for decommissioning. If the current OBR forecast does not go up to the end of the subsidy period then an average inflation figure should be assumed for the years not yet covered by OBR forecasts.

Inflation should be charged against the total cost of decommissioning (excluding optimism bias and contingency).

Year 20XX 20X1 20X2 20X3 20X4 20X5 20X6 20X7 Total
Inflation Rate (%)
Inflation Uplift Per Annum (%)
Total costs to apply to inflation (£'000)
Inflation cost (£'000)

****Optimism bias

HM Treasury 'Green Book' guidance11 should be utilised in the calculation of optimism bias. Optimism bias should be applied to the full cost of security, including exchange rate and inflation rate costs. Varying optimism bias rates can be applied to the different elements of decommissioning, based on the extent to which contributory factors are mitigated.

Work package

Work package cost (£'000)

Optimism bias rate applied (%)

Optimism bias cost £'000

Reason for rate used including mitigation factors

*****Contingency

Contingency percentage applied should reflect the sum of measured risk. The assumptions made in determining the contingency percentage should be included in the reasons for the contingency rate applied.

Contingency applied X%

Reason for rate used

It is recognised that there will be concerns about including commercially sensitive cost and securities data in a decommissioning programme, and placing such data in the public domain. Therefore it is proposed that this section (8) and section 9 on securities are provided as a confidential annex to the Scottish Government only.

9. Financial security

The programme should set out the financial security which the companies that are party to the programme propose to provide. Financial securities should follow the guidelines on cost estimates set out in Chapter 8.

10. Schedule

Details of the proposed decommissioning time scale should be provided, including a schedule (preferably in Gantt chart form) showing the dates at which the various stages of the decommissioning are expected to start and finish. Final details of the timing are only required towards the end of the life of the installation, when a review of the decommissioning programme is undertaken to finalise the decommissioning measures proposed, though must conclude by the end of the marine licence. The original decommissioning programme (prepared prior to construction) should set out, as far as possible, when decommissioning is expected to take place and explain how the decommissioning schedule will eventually be determined.

11. Project management and verification

The programme should provide information on how the Operator will manage the implementation of the decommissioning programme and provide verification to the Scottish Ministers concerning progress and compliance. This should include a commitment to submit a report, detailing how the programme was carried out. As a guideline, this report should generally be submitted within four months of completion of the decommissioning work. This section of the decommissioning programme is only required towards the end of the life of the installation, when a review of the decommissioning programme is undertaken to finalise the decommissioning measures proposed. It need not be included in the original decommissioning programme (prepared prior to construction).

12. Sea-bed clearance

This section should set out proposals for confirming that, following decommissioning, the site has been cleared. Typically this will involve carrying out appropriate surveys, upon completion of decommissioning. See paragraphs 7.17 to 7.19.

13. Restoration of the site

The programme should describe how it is proposed to restore the site, as far as possible and desirable, to the condition that it was in prior to construction of the installation.

14. Post-decommissioning monitoring, maintenance and management of the site

Where any remains are to be left in place, the programme should include a description of the proposed post-decommissioning monitoring, maintenance and management of the site. This should be similar to the example in green below. There should be a commitment to report the outcome of this work to the Scottish Ministers.

15. Supporting studies

Provide a list of supporting documents / studies (and supporting diagrams, graphics or other material) referenced in the programme(s) which are not presented in the Appendices. See examples in blue below.

Table 15.1: Supporting Documents
Document Number Title Electronic copies available at
1 EIA report <insert link>
2 Comparative assessment <insert link>

Contact

Email: oredecom@gov.scot

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