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Significant Opportunities for Irish Companies in the UK Offshore Wind Industry

To promote Irish capability in the space, Enterprise Ireland has established an Offshore Wind Cluster, currently consisting of 30 companies. 

 

Ambitious plans by the UK government mean that the country’s offshore wind industry is one of the most exciting and vibrant energy sectors in Europe, translating into exciting opportunities for Irish companies.

The UK offshore wind sector received a boost in March 2019. Under the government’s offshore wind sector deal, the country plans to generate 30 Gigawatts (GW) of offshore wind power by 2030 (approximately one third of the UK’s electricity needs), up from a current operational capacity of 7GW.

This ambitious plan requires a significant infrastructural investment of over £40 billion (€46 billion) and will require substantial collaboration with international supply chain partners. What’s more, the UK government has made a strong commitment to the investment, regardless of the outcome of Brexit. Given Ireland’s strong marine heritage and aptitude for innovation, the deal creates significant opportunities for Irish companies to collaborate with the UK offshore wind industry.

To promote Irish capability in the space, Enterprise Ireland has established an Offshore Wind Cluster, currently consisting of 30 companies. The cluster will promote communication and collaboration between cluster members and act as a primary vehicle for interaction with UK industry stakeholders and key buyers. The cluster will also provide members with the market insights required to maximise the potential for success.

 

Building on offshore wind success

The levelized cost of energy (LCOE) of offshore wind in the UK has dropped at pace over the last 10 years or so, and is now regarded as the cheapest form of clean large-scale new-generation energy relative to nuclear and gas.

This new deal looks set to build on that success, with several important aims for the UK economy. These include creating 27,000 skilled jobs, decreasing the cost of electricity to UK consumers by £2.4 billion (€2.8 billion), and transforming rural coastal communities into thriving hubs of economic activity and technological innovation. Part of the plan focuses on developing a new accreditation framework for apprentices and workers, which will equip the latter in particular with transferable and exportable skills.

As part of the deal, the UK government has committed to holding biannual Contracts for Difference (CfD) rounds, with 14GW confirmed capacity likely to be supplemented by four to five further CfD rounds releasing a further 16GW. Approximately 3-4GW is likely to be released each round, with 1.5-2GW build out per annum. To put this into an Irish perspective, Ireland’s largest single power station is Moneypoint, which has a 900MW capacity – almost 25% of total Irish generating capacity. This means the UK is aiming to have an annual build out of the equivalent of two Moneypoint power stations.

These are ambitious aims for the industry, and although one objective of the UK government is to create local, regionally dispersed employment (the deal aims for 60% local content), the offshore wind industry is a global one, and the UK must compete in the global marketplace.

Offshore wind is now also a key part of energy strategies in Germany, Belgium, Denmark and France, and deployment in Europe is likely to exceed 67GW by 2030 – a huge jump from the 16GW recorded in 2017. Each country is now looking for innovative solutions to key challenges and to drive down costs, creating substantial global opportunities for companies working across the sector.

 

Key challenges

The industry’s expansion has created challenges, and opportunities for the Irish supply chain lie in the provision of cost-effective and innovative solutions. With floating offshore wind also a rapidly developing technology, deeper waters and more difficult environmental conditions create additional and more unique innovation challenges.

Ireland has strong capabilities in several areas important in helping to meet these challenges, including survey provision and geotechnical services, maintenance and data collection. Innovation is integral in all of these areas, and with our strong IT, Internet of Things (IoT) and marine industries, Irish companies are increasingly at the cutting edge when it comes to bringing effective solutions to market.

The UK offshore wind industry is also increasingly aware of the strengths of Irish companies and innovators, as evidenced by the number of major offshore wind developers and top-level contracting companies who travelled to Dublin to attend the Enterprise Ireland Offshore Wind Forum in late March 2019.

Among the visiting companies to present were SSE, who has over 15 years’ experience in offshore wind, counting such projects as Beatrice, Seagreen, Dogger Bank and Greater Gabbard Walney among their development portfolio. SSE is also currently developing the Seagreen Zone; Phase One within the Zone includes the development of two offshore wind farms, Seagreen Alpha and Seagreen Bravo, located around 27km from the Angus coastline in Scotland, which have a potential combined capacity of up to 1.5GW. The company is aiming to start construction in 2021, with first exports in 2023. Phase Two and Phase Three will follow, with billions of pounds invested in each one.

Also presenting at the event was EDF Renewables. The organisation’s Head of UK Development, Sarah Pirie, spoke about the Neart na Gaoithe project, a £3 billion (€3.5 billion) capital project over its lifetime. Another major developer to present was EDP Renewables. The company highlighted opportunities in the Moray East and Moray West projects, both of which are looking for supply chain partners.

With UK developers and their top tier contracting partners eager to engage with the Irish offshore wind supply chain, it is clear that increased interaction and dialogue is key to collaboration between the industries in both countries.

For further information on Irish capability in the space, and to learn more about future Enterprise Ireland offshore wind cluster plans, please contact Darragh Cotter in Enterprise Ireland’s London office at: darragh.cotter@enterprise-ireland.com.

 

Initial Publication Date: 
Tuesday, 30 April, 2019