WHERE WE COULD BE - 4 Scenarios of Offshore Wind Development
Scottish Renewables and Scottish Enterprise commissioned work from IPA Economics 14 to consider the potential scale of development in Scotland and assess the associated impacts of each. OWIG and Scottish Ministers are committed to maximising the returns to Scotland from offshore wind.
The following 4 scenarios were explored:
IPA Economics calculated Gross Value Added ( GVA) and employment ( FTE) effects for the 4 scenarios. The calculation used forecasts for offshore wind development to 2025, and it took into account learning rates of 9%.
Scenario A delivering Energy + Economic benefits + Export ( energy and knowledge) capability
Scotland develops the proposed Scottish offshore wind sites, grows an industrial and knowledge base capable of installing much of its own offshore wind capacity and builds global companies of scale to capture a significant proportion of the investment in Scottish, UK and international waters. Under Scenario A, the industry is worth a cumulative £7.1bn by 2020 and an additional 28,377 jobs are created.
Scenario B delivering Energy + Economic benefits
Despite slower delivery of Scottish offshore wind projects, Scenario B still generates significant benefits for the economy. In 2020, more than 19,000 people can be employed directly in the offshore wind sector in Scotland. The industry is worth a cumulative value of £4.5bn over the coming decade.
Scenario C - low delivery of Energy + Economic benefits
Scotland does not see much of the economic benefits. Just over 6,000 full-time equivalent jobs exist in the offshore wind sector in 2020. A total cumulative value added of £1.6bn between 2011 and 2020 is the result.
Scenario D - low delivery of Energy only
With so much activity across the UK and Europe, supply chain resources are drawn to near-shore sites first, leaving the bulk of Scottish generation undeveloped or lagging to post-2020. Much of the equipment and installation resource is brought in from outside of Scotland and economic benefits are largely unrealised. The industry only grows to £224m in value by 2020 and additional jobs created fail to reach 1,000.
The tables below show the GVA and the full-time equivalent ( FTE) jobs that will be created directly by the Scottish Offshore Wind Industry under each of the four scenarios.
Achieving the higher of the illustrative scenarios will depend on tackling a number of variables which are addressed in greater detail within this document. It is notable, however, that the conclusions of the Strategic Environmental Assessment ( SEA) for Offshore Wind in Scottish Territorial Waters concluded that not only were the short term plans realisable for the sites identified in Scottish Territorial Waters, twenty five further zones have been identified where future development may be possible in the medium term ( i.e. 2020-2030). Whilst this is not an indication that all of these zones will be developed, it is clear there is ongoing potential in Scotland for continued sector expansion over the coming decades that positively impacts on such scenario consideration and provides stable economic potential for Scotland's economy.
Scenario A would deliver the greatest benefits in terms of renewable energy generation and economic benefit. It would realise Scotland's vision of positioning Scotland as a European hub of expertise for offshore wind development, enjoying the export benefits which stem from this. It is this top scenario which this Route Map aspires to reach.
The Top Scenario A - the following gives a theoretical ideal case for what the Scottish offshore wind industry could look like by 2020:
Scotland's high wind regimes encourage developers to complete the full 10.6 GW of capacity currently available for commissioning by 2020, with Scottish Territorial Water sites developed first (earliest sites commissioned in 2014), and the larger Round 3 sites following.
This requires significant grid reinforcement and results in over 2,000 additional 5 MW offshore wind turbines installed by 2020. Beyond 2020, the capacity development will continue at a rate of 2 to 3 GW/year. Simultaneously, Scotland develops a full supply chain for all three phases of the project lifecycle, including consenting & development, construction & commissioning, and operations. This exploits all opportunities that Scotland offers: a turbine manufacturer sets up a manufacturing base in Scotland; significant skills and expertise are developed; port infrastructure is developed, upgraded and adapted to the needs of the offshore wind industry; Scottish-based companies with relevant manufacturing and service skills move into the offshore wind sector and existing suppliers scale up significantly to meet domestic (and growing UK, European and international) demand for equipment and services. The overall sector activity develops over the decade to its full potential, resembling the automotive industry in its level of coordination and density. By 2020, an industry of the scale of the oil & gas sector has developed.
This adds significant value to the Scottish economy: IPA calculated that the value retained in Scotland directly from the offshore wind industry is £1.3bn in 2020 and £7.1bn over the decade. In 2020, this creates more than 28,000 full-time equivalent jobs directly in the offshore wind sector. This compares to the current Scottish energy sector with a total value of £5.5bn in 2007 15 and 41,900 direct jobs 16 in 2008.
2020 - A Bright Future for Scotland
Full capacity of offshore wind installed in Scotland
Embedded marine spatial planning practices managing activity in Scotland's seas
Grid is available and cost is reasonable
Grid interconnection with Europe allowing Scotland to export renewable electricity
Project development process has reduced in cost by 30%
Successful globally competitive supply chain in Scotland, active in Scottish, UK and international markets
Sufficiently trained and skilled workers to service the offshore wind industry
Further offshore wind projects planned for construction in 2020s and 2030s
Offshore wind developments considered attractive investment propositions - relatively low risk, attractive to pension/infrastructure investments
Public acceptance and awareness of offshore renewables as an important source of renewable energy and economic powerhouse for Scotland
Offshore wind sector accepted as a powerful, influential player within Scottish, UK and European economies.
To do what is necessary to secure this top scenario, it is important to consider the key elements that need to be in place (and by when) to make this top scenario a reality rather than an aspiration. Discussions across the industry and with public partners have projected the following timeline of development that is needed for Scotland to secure this top scenario.
Milestones for Offshore Wind Development in Scotland
To achieve this top scenario, this document sets out each of the issues which could create a barrier to development and the actions that need to be taken to overcome these issues. These actions are set out in a series of recommendations to be taken forward in the short-term from 2010-2012. The future work plan of OWIG will be influenced by doing what it can to realise these short-term recommendations. The Offshore Energy Programme Board will oversee the work of OWIG and provide support where necessary. In addition, OWIG will undertake a fundamental review of progress against these recommendations at the end of 2012. At this stage the Route Map's recommendations will be revised with a view to developing new recommendations for actions based on the subsequent two year period, 2013-2015.
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