2. Barriers to deployment
This chapter presents an analysis of responses to questions 4 to 9 of the consultation. These address technological and administrative barriers to deploying offshore wind.
Regulatory and cost challenges
Questions 4 and 5 asked respondents to reflect on the regulatory and cost challenges and how these could be overcome. While there was some overlap in responses to the questions, for clarity these have been analysed and reported on separately.
Q4: What are the key regulatory and cost challenges facing the offshore wind sector?
Almost three quarters (35/48) provided substantive responses to this question. A small number referenced, repeated or expanded their responses to questions 2 or 3.
Transmission Network Charging
Transmission Network Charging was the most frequently mentioned challenge facing offshore wind. Under the CfD framework, sites Scotland are seen to be penalised due to being furthest from the centres of demand, putting them at a competitive disadvantage and deterring investment. Comments ranged from brief statements highlighting this issue to a small number of very detailed responses discussing the impacts of this; these have been signposted to the SG for review.
Reform of the existing regulatory regime
The second most common theme was the need to update or reform the existing regulatory regime. A small number made a similar comment that developments in the offshore industry will require regulatory regimes that are fit-for-purpose and designed to deliver the scale required, in a timely manner, and at the lowest cost. Beyond this, respondents made specific points including:
- Calls to review the costs of regulatory requirements e.g. supply chain statements and contributions to a Marine Conservation Fund, ensuring a level playing field.
- Suggestions that more frequent CfD auctions (e.g. annually) would better support 2030 goals and smooth out the delivery pipeline.
- Support for the UK Government's proposals to create a separate definition and administrative strike price for floating offshore wind and to move fixed-bottom projects to a separate pot in an amended CfD framework.
- A reference to the fact that onshore solar and wind projects becoming re-eligible to bid for funding could deter investment in Scotland's offshore wind sector.
- A detailed response around the development of the National Planning Framework 4, which also expressed concerns whether regulatory and planning frameworks ensure national and strategic needs and views are being considered.
- The need for a regulatory framework which considers the social, economic, and environmental impact of investment decisions on grid reinforcements, rather than the current narrow focus of these decisions.
- A regulatory overhaul considering barriers to competitiveness (e.g. Offshore Transmission Owner (OFTO) frameworks) and changed demands such as energy storage and system resilience.
- Increased regulatory burden and executive powers to enforce of existing laws and fines to reduce the impact on birds and bats.
Some respondents highlighted the need for improved grid infrastructure to enable energy generated by offshore wind to be integrated into the network. Again, these comments varied from general calls for improvements to specific points including:
- The need for a clearer vision of grid provision and associated charges.
- Challenges around gaining public support for an expanded network.
- Ensuring that regulation encourages and does not discourage grid strengthening.
- A note that many ScotWind bids may not obtain grid connection agreements until the end of the decade which could delay progress to 2030 targets.
- Support for Ofgem's commitment to work with others to develop a more integrated approach and a call for the development of offshore "transmission hubs".
Role of local supply chains
A variety of comments were provided in relation to supply chains. These included potential conflict between proposals to implement supply chain requirements (as part of ScotWind leases) and the abilty of local supply chains to deliver on these, supply chain competitiveness and the importance of the skills and experience in the existing supply chain around Aberdeen. One commented that the supply chain would be impacted by future projects in Scottish waters requiring fewer UK manufactured vessels.
Another theme in responses was environmental regulations. General comments focussed on balancing developments with environmental regulations. A small number noted challenges around DPOs which are subject to ornithological risk. Two called for a consistent UK approach to the assessment of impacts on ornithology, while two noted a rigorous approach and more evidence is needed to maintain positive perceptions of the industry. One argued for reduced conservatism in assessments.
Delivering cost reductions to meet CfD price commitments
Some highlighted the challenge of delivering cost reductions to achieve the lower costs committed to in CfD. Respondents noted this required cost reductions at all stages of a project, putting pressure on the supply chain to lower costs which may not be sustainable in the longer-term. One reflected this is a particular challenge for supply chains which are furthest from the demand for their expertise.
Another theme related to the cost of overcoming Scotland's location and geography. Respondents discussed increased costs due to the harsher, remoter environments for floating wind, stormier sea conditions, and the smaller working windows these permit – all of which exist throughout project lifespans. Another mentioned more prohibitive planning restrictions in Scotland, while a detailed comment was provided in relation to negative consequences of Crown Estate Scotland setting up ScotWind.
A small number mentioned barriers to the growth and commercialisation of floating wind. One noted the associated costs, another a lack of support and one called for a strong focus on floating wind if Scotland is to maintain its lead in developing it.
Hydrogen was mentioned by a few respondents. One noted developing renewable hydrogen is key to the long-term success of offshore wind, and another that long-term support is needed to realise Scotland's potential in leading hydrogen production. One argued offshore "transmission hubs" could benefit from technologies such as hydrogen.
Q5: What more can the sector and other key stakeholders do to tackle these?
Substantive responses to this question were provided by 36 respondents.
Most frequent across comments was a request to review the cost implications of regulatory commitments and policy mechanisms to create a level playing field for the industry. Some cited supply chain statements and the Marine Conservation Fund as examples of mechanisms having a detrimental impact on Scottish projects which compete on price. A few reiterated calls to reform CfD with separate pots for floating and fixed wind or technology specific CfDs. Other comments included: easing regulatory restrictions to allow further offshore transmission facilities; changes to the OFTO framework; and, a request for monitoring the success of Scottish projects in CfD auctions.
The second most common theme was a variety of suggested improvements to grid infrastructure. Two made a similar comment calling for the SG to work with stakeholders to develop a robust and efficient transmission system and find suitable landing points for future connections. Other requests included the need for an informed, evidence-based approach to interconnection methods. Two organisations responsible for energy distribution provided very detailed submissions which have been signposted to the SG for review, arguing for a more strategic approach to infrastructure development.
Collaboration between marine users
Knowledge sharing, collaboration and co-ordination of advance planning between sectors and different marine users was encouraged. This was seen to reduce potential conflicts of interest and help identify solutions to common problems. Individual comments included support for various forums, such as the fisheries sub-group within SOWEC, and for Government engagement with these. Two highlighted ongoing challenges with the fishing industry, despite attempts to work co-operatively.
Actions to overcome environmental challenges were raised by some. Particular points included: a suggestion that planning and approval processes for offshore and onshore wind should be combined and based on a fuller understanding of public preferences; discussion of Strategic Environmental Assessment and Habitat Regulation Appraisal for the Sectoral Marine Plan; a call for departments and delivery bodies in Scotland to be adequately resourced with experienced staff; and, a proposal for market mechanisms that encourage component reuse. There was also support for project level mitigation and post-construction monitoring data, and for a strategic approach to site surveys of DPOs.
Reform of Transmission Network Charging
In addition to the strength of feeling evident in responses to question 4, some respondents called for reforms of Transmission Network Charging. They encouraged the SG to engage with Ofgem and other stakeholders as part of the review process.
Some made comments focussed on strengthening supply chains. There were requests for projects to use local supply chains and stop awarding work overseas, and for secure investment. One highlighted the Offshore Wind Growth Partnership as an important way to strengthen local supply chains. Another asked for clarification around the local content supply chain requirement compared to the ability of local supply chains to deliver on this.
Reduced lead times alongside robust planning
There were calls from some respondents to ensure that projects progress in a timely manner and that development timescales are reduced, while also ensuring that robust planning processes are maintained. They reflected this was necessary to overcome industry and supply chain concerns and to achieve emissions targets.
Expansion of existing plans
A minor theme was to build on existing plans. Two respondents called on existing sites to be developed, one for new accessible sites to be found and one called for more ambitious grid solutions with hub connections around Scotland to enable expansion.
Licensing and consent
Another minor theme was licensing and consenting processes. One called for transparency in the leasing and licensing process in the National Marine Plan, and one for Marine Scotland to commit to a more streamlined consenting regime. One called for the consenting process to be improved, building on lessons for previous rounds. In a detailed comment, one respondent highlighted the different timeframes for Crown Estate Scotland leases for cables (12 nautical miles) and offshore wind (200 nautical miles).
Improving workforce protection was raised by a few respondents. They called for more collaborative health and safety reporting, for offshore wind clusters to recognise trade unions, and a secure share of the supply chain for indigenous firms. The desire for increased frequency of CfD auction rounds was raised by a small number. One also called for reforms to CfD to ensure it reflects the total added value of Scottish and UK supply chains and the other for increased frequency of Crown Estate Scotland leasing rounds to provide new seabed sites for development.
Q6: What should the key Scottish priorities be in relation to Air Defence Radar, and towards radar mitigation more generally?
One third (16/48) provided explanatory responses to this question.
The need for an overall strategy
Most prevalent in responses to this question were discussions around the need for an overall strategy for air radar. Most respondents argued the existing case-by-case approach to resolve site specific issues is not sustainable, highlighting the need for a long-term solution and calling for an overall strategy with senior ministerial support.
A few respondents made the same specific request, highlighting the need for a national strategic approach which capitalises on opportunities arising from airspace architecture reviews and advances in civil air traffic management (ATM) technologies.
Engagement with MOD and OWIC
The second most common theme was discussions around the need to engage with the strategy development being undertaken by the UK Ministry of Defence (MoD) and OWIC (Offshore Wind Industry Council). Most of these comments urged the SG to remain engaged with, and supportive of, this initiative, with one giving a more detailed response suggesting how the SG could engage.
Some noted the Aviation 2030 task force formed by the Minister for Energy, Connectivity and the Islands and stated this was a positive step towards addressing air radar issues. A few felt this group's outputs could support the SG proposals for a UK wide strategy as part of the MoD/OWIC initiative mentioned above.
Another theme in responses was the potential to take advantage of technological developments. As described above, a few noted the importance of capitalising on advances in air traffic management technologies. In addition, respondents mentioned future Communication, Navigation and Surveillance (CNS) infrastructure and the need for continued funding to develop and test mitigation solutions. There were also calls to further investigate the potential benefits of the Single European Sky programme.
The importance of active dialogue with stakeholders was a minor theme. Respondents noted the need for cooperation between the industry and military and civil aviation authorities, air traffic control, and the value of working with UK bodies.
Work by the UK Department for Transport (DfT) was mentioned by a small number. who argued it has been reluctant to engage or push for surveillance practices to evolve, and that they should now provide greater leadership in supporting strategic mitigation.
A few commented on the role of other stakeholders. These included two calls to transition to self-management by aviation stakeholders, and one suggestion that regulators should make sure that all radar users can easily see turbines and infrastructure, with developers providing any mitigation.
Environmental and planning barriers
Q7: 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?
Just over half (26/48) provided a response to question 7.
Iterative Plan Review of the Sectoral Marine Plan
The most common theme in responses to question 7 related to the two-yearly Iterative Plan Review of the Sectoral Marine Plan. Comments on this theme frequently referred to the Advisory Group which forms part of the review. A few made general comments in support of the Advisory Group. The composition of the group was queried – suggestions for including developers and their consultants, legal advisors, and academics were noted. A small number asked for clarity on the role of the group in identifying knowledge gaps, and on its powers. Two suggested a specific working group to address ornithological constraints to feeds into the Advisory Group.
Some made general comments in support of the Iterative Plan Review, stating it is a suitable vehicle to address environmental constraints. Others noted specific issues around the process, calling for clarity on how the review will identify and address gaps and ensuring the rolling programme does not have a detrimental effect on ongoing projects due to 'changing the goalposts'. One suggested the review should be confined to currently constrained and new DPOs (Draft Plan Options); another asked for clarity over whether individual projects will be autonomous in their decision making.
A collaborative approach
The second most common theme was the need for a collaborative approach with industry to address knowledge gaps and environmental concerns. Responses in this theme varied, but included: calls for industry wide collaboration, including opening up working groups to wider industry representation; for a strategic approach to site surveys which are co-ordinated and delivered centrally; hopes to engage more with the ScotMER workstream; alignment between Crown Estate Scotland and the SG; working with regulators and SCNBs (Statutory Nature Conservation Bodies) to address uncertainty in certain DPOs; and, consulting universities and the supply chain in North East Scotland.
Connections with UK and European Governments and organisations were discussed by some respondents. A few gave a similar response asking the SG to collaborate with UK initiatives which could provide input into Scottish assessments. Others highlighted European knowledge, specifically WindEurope and countries with established or growing offshore wind sectors such as Norway and Germany. There were also calls for clarity on cross-border working given different consenting regimes, especially given potential differences in environmental protection standards between the UK & Europe.
Gaps should not delay developments
Another theme was that knowledge gaps should not hinder development. Most made the same point that, while knowledge of the impact on bird ecology has increased, the need for ongoing research to address continuing gaps should not prevent or stifle development decisions. Related to this, a few commented on the need to identify when the evidence base will be considered sufficient to allow consent to be given to DPOs currently under high ornithological constraint. Another welcomed the opportunity to reduce the level of precaution in assessments through collecting further evidence.
Examples of good practice
Specific examples were shared by some respondents. These included: work by Marine Scotland, specifically the Scottish Marine Energy Research programme (ScotMER) as a source of new learning and Offshore Renewables Joint Industry Programme (ORJIP); the CORPORATES process pulling together stakeholders to share knowledge and identify gaps; the Offshore Wind Sector Deal Barriers to Growth group and SOWEC as useful mechanism to encourage coordination; EOWDC developers committing to environmental research; and the use of the dtbird© system in the Kincardine floating array.
Some called for clarity on the timescales for advice to be required. A few gave a similar response, asking for the development of a timetabled evidence gathering exercise which sets out how and when evidence will be available, and identifies further research gaps. There was also a call for existing working groups to remain focussed to ensure no unnecessary delays to future deployment of offshore wind, and for a statutory timeframe for advice to ensure climate change ambitions are met.
Full and transparent assessments
Some highlighted the importance of full and transparent environmental assessments. These discussed the need for strategic environmental monitoring, full Environmental Impact Assessments and 'solid science', and linking this to UK monitoring. The challenges around ensuring the public have access to environmental data were also highlighted.
A small number of respondents highlighted the importance of developing data depositories to share between marine users and stakeholders. This included a call for the independent collation and analysis of data collected by developers.
Q8: What steps can be taken to improve interactions between offshore wind and other marine sectors?
Thirty one respondents answered this question.
The importance of dialogue between marine users
The most prevalent theme in response to question 8 was the importance of dialogue between all users of the marine environment. Some respondents highlighted this was essential for targets to be delivered, and described the value of this dialogue – particularly early stage disucussions - in establishing connections.
There were calls for the SG to provide greater support in fostering and coordinating this dialogue. This included suggestions for Government and regulators to take a pro-active lead in co-location discussions, for the creation of an Offshore Wind Development Advisory Group, and the convening of a cross-sectoral group where issues could be raised in a collaborative rather than adversarial forum.
Existing bodies and approaches
Some commented on existing bodies and approaches, explaining how these have been effective in establishing connections and encouraging discussions among stakeholders. Examples include: Innology's involvement in the Mersey Maritime cluster; the Seabed User & Developer Group (SUDG); the CORPORATES process; and respondent's own experience of working with the fishing industry. Others highlighted the potential facilitation role for local intermediaries and organisations, and called for the collation of lessons learnt from existing projects.
Effectiveness of marine planning
General comments on the effectiveness of marine planning were made by some. A few gave a similar response stating marine planning in Scotland has started slow and not yet affected decisions around the implementation of marine plans. As such they argued it should be prioritised and implemented to improve interactions. There were also calls for greater clarity of priorities, and for a clearer and streamlined consenting regime.
There were calls from some respondents for a review to understand interactions between marine users and to create a holistic plan and strategy which helped to prioritise the role of marine users. Suggestions included a detailed study to explore interactions between new and legacy marine users and for a Scottish industrial strategy to manage interactions. A few highlighted the need for the SG to prioritise marine users so their environmental ambitions and commitments are met.
Alignment with marine policies and planning
Some highlighted the need to align offshore wind policy with other Scottish Government marine policies. Respondents felt this would assist the transition to greater deployment of offshore wind, and potentially develop more sustainable fishing practices.
Discussion around Carbon Capture
Carbon Capture was raised by a few respondents. These included calls for a more proactive Government role in the decarbonisation strategy, and for greater planning on how offshore wind can co-exist with carbon capture so the economic and decarbonisation benefits of both can be maximised. Two argued specifically for the identification of potential co-location 'sweet spots' for carbon capture, hydrogen and offshore wind.
A few respondents highlighted opportunities for collaboration with the oil and gas industry. In particular they mentioned knowledge sharing, workforce transition, and mapping shared supply-chain services.
Contract for Difference (CfD) Framework and Innovation
Q9: How could a competitive market framework that promotes the development of floating wind be developed whilst still retaining value for money for the consumer?
Twenty eight respondents answered this question.
Reforms to the CfD scheme
The most common theme in response to question 9 was the need for reforms to CfD to allow floating wind to flourish. Four sub-themes were evident within these responses.
Most prevalent were comments arguing CfD needs to be reformed. The language used across responses varied, but there were calls for the creation of a separate 'pot' for floating wind to separate it from fixed-bottom projects, for a floating CfD, or to allow floating wind to compete in the innovation / developing technologies class. Respondents suggested these reforms would allow floating offshore wind to compete successfully against fixed-bottom. Some also argued this separation was necessary to enable cost reductions which would accelerate commercialisation and maximise potential deployment.
Related to these proposed reforms, some specifically referenced their support of the recent UK Government / Business, Energy and Industrial Strategy (BEIS) consultation. Some made general comments in support of the CfD approach. Finally, two stated that changes to CfD should still require environmental obligations to be met.
Support for floating wind
General comments in support of floating wind were the second most prevalent theme, with some providing reasons for their support. These included:
- The larger wind resource available to floating wind and their ability to be deployed flexibly in deeper waters, generating greater potential than fixed wind;
- Opportunities to supply power and green hydrogen to other markets, as well as domestic power supply;
- Being less visually intrusive and with fewer significant environmental impacts;
- Potential to turn floating wind installations into safe havens for marine life;
- One detailed response has been signposted to the SG for review. It outlines the potential opportunities of floating wind, levels of investment to date and the role of niche markets as a spring board for the uptake of these technologies.
Respondents commented that they would expect floating offshore wind to become cost competitive over time. Some reflected that this could be achieved in a relatively short time or by 2030, as experienced with fixed-bottom. They suggested this could be achieved with support and if existing expertise from offshore wind and oil and gas is utilised.
A few referred to Scottish Renewables' 'Floating Wind: The UK Industry Ambition' paper, which highlights how cost reductions in floating offshore wind can be achieved with the right support in place. One mentioned the need for careful management of Administrative Strike Prices and ensuring 'competitive tension' in future allocation rounds.
Supply chain synergies
Another theme was the need to identify and take advantage of existing expertise and supply chain synergies with the oil, gas and tidal sectors. A few made a similar comment encouraging the SG to support mechanisms encouraging these synergies. One highlighted the potential for using the Oil and Gas Technology Centre in Aberdeen to develop technology, and the experience of Equinor in the floating wind field.
Need for a strategic plan
There were calls for the SG and industry stakeholders to develop a strategy or "roadmap to commercialisation" for offshore floating wind. This was seen as important in maximising existing opportunities to increase the development and reduce the cost of offshore wind, as well as helping to protect the consumer.
Benefits to the consumer
Some commented on the benefits to the consumer – that offshore wind could deliver a new source of green electricity at a lower cost than other sources and would help retain value for money for the consumer. One noted the widest possible green energy generation base – including offshore wind – is needed to keep consumer costs down.
A few respondents highlighted other challenges to creating a floating wind sector. These include the lack of a pipeline of offshore floating wind projects, the long timeframe from project inception to deployment, and that direct competition with fixed bottom wind is not feasible in the near term given the comparative immaturity of floating wind.
Subsidies were a minor theme. A small number argued for greater investment or sympathetic financial support to ensure enough work has taken place to enable wide-scale deployment of floating wind when needed. Conversely, one called for a debate on existing subsidies paid to energy companies who are not passing on cost savings to consumers.
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