Generating renewable energy from the UK’s offshore wind farms

The initiative

‘Directive 2009/28/EC of 23 April 2009 on the promotion of the use of energy from renewable sources' sets clear targets for EU members:  “a target of at least a 20% share of energy from renewable sources in the Community's gross final consumption of energy in 2020.” [1] The UK coalition government “has consistently made clear that it is committed to achieving the UK's legally binding target of 15% renewables by 2020 in the most cost effective way, minimising the impact on consumer bills.” [2]

In order to achieve the 2020 target, the government promoted investment in clean energy. “Between January 2010 and September this year, the Department of Energy and Climate Change (DECC) announced £31 billion of private sector investment in renewable electricity generation. This investment could support over 35,000 jobs.” [3]

One of the main types of power generation was offshore wind. “The offshore wind part of the plan/programme aims to enable further offshore wind farm leasing in the relevant parts of the UK Exclusive Economic Zone and the territorial waters of England and Wales." In August 2013, DECC launched the joint industry and Government Offshore Wind Industrial Strategy. It provides “a long-term framework to promote innovation, investment and growth in the UK-based supply chain.” [4]

The challenge

The 2010 coalition government faced a challenge of underinvestment in energy, especially electricity generation. A fifth of the existing power stations were scheduled to close by 2020 because they were old, inefficient or causing pollution. It also had to respond to the 2009 EC directive, which set clear and ambitious targets for clean energy.

The public impact

There is clear evidence that offshore wind power can make a major contribution to the country's renewable energy. There are two aspects to this - falling costs and the UK's own commitment to the policy:

• "The lifetime cost of energy from offshore wind has come down from £136/MWh in 2011 to £121/MWh for projects moving to construction between 2012 and 2014.” [5]
• “The UK is the world leader in offshore wind and has more installed capacity (3.8GW) than any other country, supporting 18,300 jobs. By 2020 we could see capacity reach 10GW, enough to power almost 7 million homes." [6]

Stakeholder engagement

There is a strong support from the stakeholders. The main internal stakeholders are DECC and the other government agencies involved, such as UK Trade & Investment (UKTI). There are two main offshore wind bodies: the Offshore Wind Industry Council (OWIC) and Offshore Wind Programme Board (OWPB). Nature protection bodies, such as the Royal Society for the Protection of Birds (RSPB), are also engaged to ensure that wind farms do not harm the habitats of marine and coastal animals.

There are also a number of private sector organisations involved in the offshore wind industry, for example:

• Siemens - "with its stable offshore wind policy environment, secure project pipeline and robust infrastructure, Siemens Wind Power clearly believes the UK to be the best location in Europe for their first dedicated offshore wind manufacturing facility.” [7]
• Dong - “Dong Energy, the biggest operator of offshore wind farms in Britain, has said it plans to spend a further £6bn in the UK by 2020, convinced that the government is serious about supporting wind power.” [8]
• Vattenfall - “Vattenfall has for years being trying to build a European offshore wind deployment centre off the Scottish coast in Aberdeenshire, but has faced legal opposition from ... Donald Trump. The UK's Supreme Court has now ruled the project can go ahead. The centre would allow the Swedish-based company behind wind farms in Thanet and Kentish Flats to experiment with different kinds of turbines to see which are the most cost-effective.”

Political commitment

There has been strong support from the coalition and current governments, so that the UK can meet its 2020 targets, with the government seeing itself as “the global market leader in offshore wind:

• The UK has 5.7GW installed or under construction, and is on track to deliver 10GW by 2020, representing the largest expansion in any class of renewable energy technology.” [9]
• "The government reached agreement on the Levy Control Framework (the total subsidy available for low carbon technologies) to 2020/21 is a huge step forward that has made a significant impact in the sector. The Levy Control Framework will be set at £7.6bn total in 2020/21 (2011/12 prices). This will enable the UK to meet our 2020 renewable and low carbon goals." [10]
• "The government strongly supports renewable energy as part of a diverse, low carbon and secure energy mix." [11]

Public confidence

Surveys conducted to examine public confidence in wind farms have demonstrated that majority of the general public is in favour. “Public attitudes ... consistently demonstrate that ... between 70 and 80% of the general public are in favour of wind energy. [12] This positive feeling is reflected by those living near a wind farm ... In many cases, people with negative views prior to the building of a wind farm changed their mind once the wind farms were built. Research by the RSPB revealed that only 3% of the UK public are opposed to building onshore wind farms in Britain over the next ten years, and only 14% do not want onshore wind farms within 3 miles of their home. Wind and hydroelectricity were the most popular means of generating electricity favoured by the survey sample.”

Clarity of objectives

The UK aims to provide 15% of its energy through renewable sources by 2020. Within that overall target for renewables: “the UK is already the world leader in offshore wind, and the sector is on track to deliver 10GW by 2020, representing the largest expansion in any class of renewable energy technology.” [13]

Strength of evidence

In 2012 and 2013, DECC engaged with stakeholders to explore what should be done to ensure that local communities see benefits from, onshore wind development. “The Government intends to introduce compulsory pre-application consultation for onshore wind projects, requiring developers to engage with local communities before they submit a planning application." [14]

The government was also concerned to establish the technical and logistical challenges facing the industry. “The OWIC and OWPB, together with government, identified the challenges facing the sector and developed [a] programme of actions ... The OWPB was established following the recommendations in the Offshore Wind Cost Reduction Task Force report. [15] It brings together representatives from developers and the supply chain, UK and Scottish Government, The Crown Estate and Statutory Nature Conservation Bodies.” The conclusions were set out in the Offshore Wind Industrial Strategy of August 2013.

Feasibility

In August 2013, the government launched its Offshore Wind Industrial Strategy, “which provides a long-term framework to promote innovation, investment and growth in the UK-based supply chain”. One aspect is to make the power generated affordable for consumers.

The reduction in the cost of offshore wind power generation (see Public impact above) has made it economically more feasible. The financial feasibility has been addressed by significant investment in renewable energy, of which offshore wind is a major component: “since 2010, an average of £7 billion has been invested each year in UK based renewable energy [and] in April 2014, eight renewable energy projects were awarded an Investment Contract, providing up to £12 billion of private sector investment.” [16]

Management

The OWPB, which is a body within DECC, has oversight of offshore wind projects. A cost reduction taskforce and investment organisation were also set up to manage the cost and investment respectively:

• "The UK Offshore Wind Cost Reduction Task Force is a joint collaboration between Government and industry to deliver cost reduction.” [17]
• “The Offshore Wind Investment Organisation (OWIO) works to increase investment in the UK's offshore wind supply chain. OWIO works with DECC and the Department for Business, Innovation and Skills (BIS)”. [18]

Individual projects are managed by the relevant business, e.g. Dong, Siemens and Vattenfall.

Measurement

The energy produced from wind farms can be easily measured while other parameters relating to the cost of the initiative can also  be quantified:

• "The OWIC approved the Cost Reduction Monitoring Framework on 24 February 2014. The OWIC identified the need for the progress being made on cost reduction to be tracked against scheduled milestones and for an average Levelised Cost of Energy (LCoE)  to be published for the most recent projects.” [19]
• “The Crown Estate and ORE Catapult have developed a framework for monitoring and reporting progress on reducing LCoE.” [20]
• “Measuring UK content in the supply chain for all UK offshore wind projects would enable both industry and Government to track progress towards the OWDF vision of over 50% UK content in offshore wind farm projects and gather hard data on where the UK is delivering a strong competitive supply chain and where it is not." [21]

Alignment

There is significant cooperation between government bodies, principally DECC, UKTI and agencies such as the OWIC, and private sector actors in developing the offshore wind industry:

• “In Hull, Siemens and ABP Ports are investing £310 million in offshore wind turbine factories.” [22]
• "Two leading international suppliers of offshore wind foundations, EEW SPC of Germany and Bladt Industries of Denmark, have acquired the former TAG Energy facility in Teesside in the north east of England.” [23]
• "UKTI's support for companies includes facilitating partnerships between new investors and existing UK companies where appropriate [and building] strong relationships with key UK businesses able to deliver against these opportunities." [24]
• The UK Green Investment Bank invested £1.3 billion in offshore wind sector, backing eight projects with a capacity of [about] 2.9 GW of renewable power.
• “At a local level, Centres for Offshore Renewable Engineering (COREs) [create] a partnership between Government and six key locations for offshore wind in England.” [25]

There is also strong support from the majority of UK citizens for renewables in general and offshore wind in particular.

Bibliography

Offshore Wind Industrial Strategy Business and Government Action, August 2013, HM Government

Delivering UK Energy Investment, July 2014, DECC

DIRECTIVE 2009/28/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL, 23 April 2009, Official Journal of the European Union

UK Renewable Energy Roadmap Update 2013, November 2013, DECC

DECC Assessing Future Offshore Wind Leasing, offshoreWind.biz

Cost of offshore wind energy falls sharply, 26 February 2015, Catapult

Major offshore wind operator plans £6bn UK investment by 2020, 3 January 2016, Terry Macalister, The Guardian

UK Offshore Wind: Opportunities for trade and investment, June 2015, UKTI

The factors affecting investment in the wind power generation market in the EU, British Library