Aberdeenshire has a new energy industry and it’s green. From being the dream of a few individuals probably written off as slightly barmy, offshore wind has become a major part of the energy transition, for the UK as a whole, but also for north-east Scotland. Just take a look off the beach at Balmedie where the piles for the Aberdeen Bay Offshore Wind Farm are being installed as I write. Work is also continuing apace in the Moray Firth where the last 12 months have seen installation of all the offshore piles and a third of the jackets for the 84-turbine, £2.6billion Beatrice Offshore Windfarm. The first electricity could be generated as early as July and the operator, SSE, expects the farm to generate up to 588MW of power – enough for about 450,000 homes – once it is fully operational, which is expected in 2019.
I remember being told by sceptics that wind power would never be capable of contributing significantly to the UK’s power mix. Well, I hope some hats are being eaten as renewables’ share of electricity generation in the UK as a whole was 25% in 2017, and the trend is increasing. This is due to the rapid increase in renewable capacity, a lot of it in the form of offshore wind. According to statistics published by the trade body Wind Europe, the UK installed more than half of new offshore wind capacity in Europe in 2017, amounting to 1.7GW of new installations. Crown Estate Scotland is in the early stages of planning new leasing rounds for fixed and floating offshore wind projects in Scottish waters. More details are expected later this year with a potential round taking place in 2019.
To date, offshore turbines have been installed on towers fixed to the seabed but one future trend may be for floating turbines, anchored to the seabed by cables, which can be deployed much farther offshore in deeper water (perhaps up to 800m) where there is more wind. It’s been widely reported that the first floating windfarm, Statoil’s 30MW Hywind project, also off Aberdeenshire, has been achieving impressive results since it opened last October. No wind turbine generates 100% of its potential maximum capacity 24 hours a day because the wind is intermittent. Fixed offshore windfarms are expected to generate on average at around 45-60% of their capacity. However, during November, December, and January, Hywind is reported to have generated at an average of 65%, despite having to contend with some storm force winds which required a temporary shutdown for safety.
Three more floating windfarms are under development but two of these — the 60MW Forthwind and 10MW Dounreay Tri projects — have been in the news as it seems they will miss an October deadline to qualify for Renewables Obligation Certificates (ROCs), a form of government subsidy which is crucial to their funding. Industry has been lobbying for an extension to the deadline to ensure these projects go ahead.
For some this will be further evidence that renewable energy has only succeeded due to massive public subsidy which ends up pushing up consumers’ bills. The so called “energy trilemma” (security of energy supply; low energy costs; and sustainability) has proven extremely hard to reconcile and even more so in the current political and economic climate. However, we need more renewable energy if we are to achieve our national targets for reducing greenhouse gas emissions and onshore opportunities are increasingly limited. Support for various forms of renewable energy in their early stages has allowed them to achieve economies of scale that bring costs down in the long run. Both onshore wind and solar are now broadly competitive with fossil fuel generation while the most recent government auction for generating capacity shows that fixed offshore wind generators expect their prices to fall dramatically also.
Maf Smith, of trade body RenewableUK, has argued that floating offshore wind is a particularly attractive prospect because it uses similar skills to offshore oil and gas – potentially preserving jobs and expertise as UKCS production declines. Indeed, in 2016, the number of people employed in Scotland’s offshore wind sector trebled to 2000, according to data from the Office of National Statistics and that figure will certainly rise when figures for 2017 are released. (Another 8,000 were employed in the onshore wind sector.) There is also an export opportunity for those same engineering skills, since 80% of offshore wind resources globally are in deepwater and therefore unsuitable for conventional turbines. Just as Scotland and Scots have played a massive role in global oil and gas development, the hope is that this can be replicated in the global renewables market, especially offshore wind.
CMS is delighted to have played a part in the development of Scotland’s and GB’s offshore wind sector. CMS lawyers have, to date, advised in relation to 33 offshore windfarm projects in GB waters (with an aggregate installed and planned capacity of over 17GW). CMS lawyers have also advised on every single OFTO project (transmission cables connecting the offshore turbines to the mainland grid) tendered to date. CMS is also delighted to be at the forefront of floating offshore wind having advised Statoil on its Hywind project and Kincardine Offshore Wind on its project off Aberdeen.
Of course, we will still need to use fossil fuel resources for many years to come, as demonstrated by BP’s Energy Outlook for 2018 which shows global consumption of oil and gas in 2040 as fairly similar to today (despite a significant increase in energy use over that period, especially in Asia). But the truth is that there is room for both in our energy mix and in the North Sea. Soon, workers will begin moving into Beatrice Wind Farm’s operations and maintenance base in Wick, housed in buildings originally built in 1807 by Thomas Telford, the famous Scottish engineer. I think he would be fascinated to see the new offshore marvels being built with Scottish engineering talent.
Penelope Warne is the senior partner and head of energy
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