Offshore wind energy - draft sectoral marine plan: social and economic impact assessment

B Scenarios

B.1 Storylines

Table 49 Storylines

Activity	Storyline
Region: East
Development and project management	Much of project management is done outside the region, although there is some retention related to survey work and local planning. 20% of development and project management spend is retained locally at the start of the appraisal period. The potential for a pipeline of development suggests that the supply chain may increase over time such that local retention increases to 70% by the end of the timeframe for the assessment.
Wind turbine supply	The majority of turbine manufacture is undertaken outside of the region (in Humberside). Some assembly work is undertaken, building on the supply chain development associated with development in the Forth & Tay (e.g. Seagreen) enabling 3% of spend to be retained locally. Over time, it is expected that there would be an increase in the amount spend that is retained locally, with this increasing to 25% by the end of the timeframe for assessment.
Balance of plant	Around 4% of spend is retained locally, building on the growing supply chain associated with development in the Forth & Tay. This is expected to grow to 42% by the end of the assessment timeframe as supply chain capacity increases.
Installation and commissioning	Installation activities may be higher than suggested by the LQs due to recent development in the Forth & Tay so retention is increased to 2% (rather than 1%). Growth across the assessment timeframe is expected to result in retention of 12% by the end of the timeframe for the assessment.
Operation, maintenance and service	Most of the minor service work can be undertaken using local supplied resulting in 30% retention of spend. There may be some growth over time, increasing retention to 70% by the end of the assessment timeframe.
Region: North East
Development and project management	Retention of spend at the outset of the appraisal timeframe is low at just 0.1. The potential for a pipeline of development suggests that the supply chain may increase over time such that local retention increases to 5% by the end of the timeframe for the assessment.
Wind turbine supply	Wind turbine manufacture is undertaken outside of the region, assembly activities and some component manufacture is local resulting in retention of just 2% of spend. The amount retained locally is expected to increase over time reaching 22% by 2050.
Balance of plant	Cables, foundations and substation work can draw on the local supply chain with growth of the supply chain due to recent development giving a retention rate of 50%. This is expected to grow slightly into the future up to 70% by the end of the assessment timescale.
Installation and commissioning	Installation and commissioning activities enable good use of the local supply chain with 40% of spend being retained. Growth is expected to result in retention reaching 80% by the end of the appraisal timeframe.
Operation, maintenance and service	Growth of the supply chain due to developments, e.g. Beatrice, means there is increasing supply chain capacity to undertake both minor and major servicing and maintenance. As a result, retention of spend is assumed to be 14% increasing to 18% by the end of the assessment timescale.
Region: North
Development and project management	Local retention is assumed at 0.1% for spend in the North region. The potential for a pipeline of development suggests that the supply chain may increase over time such that local retention increases to 5% by the end of the timeframe for the assessment.
Wind turbine supply	Manufacturing is limited with 2% retention of spend in the North. The amount retained locally is expected to increase slightly over time to 22% by the end of the appraisal timeframe.
Balance of plant	Investment in cables, substations and foundations results in 4% retention in the North. This is expected to increase to 42% as the supply chain develops due to local spend.
Installation and commissioning	Retention of 2% of spend due to development in the North. Supply chain growth results in this increasing over time to 12% by the end of the assessment timeframe.
Operation, maintenance and service	Retention of 10% of spend in operation, maintenance and service in the North. This is expected to grow to 12% by the end of the assessment timeframe.
Region: West
Development and project management	Retention in the West for development and project management is assumed to be 1% in the short-term. The potential for a pipeline of development suggests that the supply chain may increase over time such that local retention increases to 40% by the end of the timeframe for the assessment.
Wind turbine supply	Wind turbine manufacture is undertaken outside of the region, but some assembly activities and component manufacture is local resulting in retention of 2% of spend. The amount retained locally is expected to increase over time up to 22% by the end of the appraisal timeframe.
Balance of plant	Spend on cables, substations and foundations is expected to result in a 3% local retention rate. Some growth may occur over time but this is expected to be limited to 15%.
Installation and commissioning	Installation activities are likely to be sourced locally with a high level of 1% retention of spend. It is expected that retention rates would grow over the assessment timeframe to 11%.
Operation, maintenance and service	Retention of 10% of spend in operation, maintenance and service in the West region. This is expected to grow to 12% by the end of the assessment timeframe.
Region: South West
Development and project management	Retention of spend in the South West is expected to be limited due to supply chain capacity. Overall, is it expected that 0.1% of spend is retained in the South West, increasing to 5% by the end of the assessment timeframe.
Wind turbine supply	It is expected that 3% of spend will be retained in the South West, due to current limitations in the supply chain. The amount retained locally is expected to increase over time to 25% by the end of the appraisal timeframe.
Balance of plant	Capacity issues in the South West are expected to limit the amount of spend that is retained to 3%, potentially increasing to 15% by the end of the assessment timeframe.
Installation and commissioning	The supply chain in the South West is again assumed to be limited in its current capacity such that 1% of spend is retained. Some growth is expected over time, with retention increasing to 11% by the end of the assessment timeframe.
Operation, maintenance and service	Retention of spend in the South West is assumed to be 10%. Some growth is expected in the supply chain in the South West such that retention increases to 12% by the end of the assessment timeframe.

B.2 Review of references informing assessment of supply chain impacts

B.2.1 CH2M (2016): The Economic Benefits of Offshore Wind Energy in the east and North East regions of Scotland, Final Report for Marine Scotland, East Coast Renewables and The Crown Estate, April 2016.

Individual project characteristics of five offshore wind projects, based on each project's Environment Statement are provided in Table 50.

Table 50 Percentage of local content for different stages for five offshore wind projects

Offshore wind project	Percentage local content
	Development	Construction	Operation
Neart Na Gaoithe	70	6–73	61–92
Seagreen Alpha & Bravo	20–50	8–33	33–45
Inch Cape	n/a	10–32	35–65
Moray: Telford, Stevenson & Macoll	40	10–30	30–60
Beatrice	30–50	20–30	30–60

Factors experienced in relation to the supply chain include:

• Sourcing difficulties;
• A gap between the infrastructure available and that required by industry;
• Finding appropriate port-side locations for construction and installation that are generally suitable in most weather conditions;
• Making O&M activities more efficient by having on-site or near-site teams, as well as increased preventative and predictive maintenance;
• Continued dependency on a limited number of manufacturers, which may have sufficient capacity but could lead to less competitive conditions and bottlenecks;
• Increase in turbine sizes increasing pressure on infrastructure capability and capacity;
• Increased levels of onshore assembly of wind turbines components to virtually complete units leading to more challenging transhipment to offshore sites; and
• Shortages in export cable manufacturing;
• Limited availability of installation vessels (to 2018).

It is highly unlikely that manufacturers will express interest developing turbine manufacturing and/or assembly plant or related facilities in Scotland or elsewhere in the UK (beyond the Humberside plant).

Requirements for piling strategies for deep water projects will rely on suppliers of jacket structures with pin piles. Scottish suppliers include BiFab at Methil, Burnitsland and Arnish; Global Energy Group at Nigg, and FoundOcean in Livingston.

Highland and North East based ports and supply chain businesses could be well-placed to provide the necessary capability and capacity to serve construction and deployment for test and demonstration projects.

Offshore Wind Vision identified UK content levels to be about 43% in 2014 and expected to reach a target of 50% local content by 2030.

Scottish Enterprise and Highlands and Islands Enterprise Offshore Wind Energy Supply Chain Database contain information on 500 companies that have offices or facilities located in Scotland.

The analysis of the supply chain current state and opportunities (from C2HM, 2016) is reproduced in Table 51.

Table 51 Analysis of supply chain current state and opportunities

Component	Current state	Opportunities
Turbines (No/Minor existing presence)	No WTG manufacturing presence Presence in turbine components: Artemis Intelligent Power (part of Mitsubishi–Vestas) Moventas (David Brown Gears)	Interest from OEMs – Areva / Gamesa (now rebranded as Adwen), Mitsubishi-Vestas Components such as gearbox transmission systems including valves, electronics and control software
Blades (No/Minor existing presence)	No existing presence	Interest from OEMs – Areva / Gamesa (now rebranded as Adwen), Vestas to construct in Isle of Wight, Siemens constructing in Humberside.
Towers (Limited existing presence)	Presence in onshore wind tower fabrications: Wind Towers Ltd (now acquired by CS Wind)	Diversification and transferable skills from current steel fabrication experience Potential re-location/new facilities required on East coast Inward investment now secured by the £14 million acquisition of Wind Towers Ltd by South Korean CS Wind who intend to expand into the offshore wind turbine towers market increasing employee numbers by 50%.
Foundations (Existing presence)	Presence in jacket substructures: BiFab	Global Energy Group (future potential fabrication & as-assembly) Steel Engineering (Samsung test turbine supplier) Concrete Gravity Bases: BAM Nuttall, Aggregate Industries
Substation (Limited existing presence)	Presence in onshore and offshore substation fabrication: Babcock International BiFab	Range of supply chain with growth or diversification potential Substation fabrication and related services: Global Energy Group, Petrofac
Other balance of plant (Limited existing presence)	Limited presence	Diversification and transferable skills Requires inward investment
Vessels (No/Minor existing presence)	Installation - no existing presence Inspection, O&M – limited presence ROV systems/expertise – strong presence	Diversification and transferable skills from parallel experience Inspection / O&M services – strong oil & gas transferrable expertise
Operation & Maintenance (O&M) (Existing presence)	Presence in oil & gas sector O&M activity Range of companies engaged in offshore wind O&M: MCS Clyde Ltd – crew transfer Briggs Marine – repair and maintenance Buckie Shipyard - Aluminium twin hulled workboats	O&M host ports - potential at various locations (see Section 5) Existing vessel & heli-services Diversification of oil & gas services Training and Safety Innovation – monitoring and predictive maintenance

The report also includes an analysis of regional baseline linked to ability to meet project demand from the current market and in the context of a rapidly evolving market. Moray Firth cluster site assessment (from C2HM, 2016) is shown in Table 52.

Table 52 Moray Firth cluster site assessment

Cluster role	Site	Traffic light assessment
Integrated hub	Nigg	High ability
Integrated hub	Ardesier	Medium ability
Distributed manufacturing and O&M	Buckie	High ability
O&M	Invergordon	High ability
O&M	Wick	High ability
O&M	Fraserburgh	Medium ability
O&M	MacDuff	Medium ability

Labour market assessment shows this to be above average in Aberdeenshire and Aberdeen City, and average in Moray and Highland.

Forth & Tay cluster site assessment (from C2HM, 2016) is shown in Table 53.

Table 53 Firth & Tay cluster site assessment

Cluster role	Site	Traffic light assessment
Integrated hub (partial)	Dundee	High ability
Distributed manufacturing	Leith	High ability
Distributed manufacturing	EPF Methil	High ability
Distributed manufacturing	Rosyth	High ability
Support – O&M	Montrose	Medium ability
O&M	Eyemouth	Medium ability
O&M	Dunbar	Medium ability

Labour market shown as below average in Midlothian, East Lothian, Clackmannanshire and Angus, average in City of Edinburgh, West Lothian and Falkirk, and above average in Dundee City and Fife.

Scottish retention rates from the five offshore wind projects (either stated explicitly or calculated from the Environmental Statements) are shown in Table 54. The high rates are considered to be optimistic.

Only Inch Cape provided labour retention rates during manufacturing and construction phases with a low case of 10% and high case of 33%. In the O&M phase, Scottish retention rates gave an average of 60% for the low case and 100% for the high case.

Table 54 Scottish retention rates from offshore wind projects

Offshore wind project	By case		By phase
	Low/ base	High	Manufacturing	O&M	Construction
Neart Na Gaoithe	31	82	3–84	64–97	22
Seagreen	15	40		Not available
Inch Cape	21	47		90
Moray	15	40		60–100
Beatrice	30	50	15	58–100	20–60

Spend is generally based on £3 million per MW multiplier (from BVG Associates for Renewables in 2011). Further breakdown is available as follows:

• Develop and consent: 4%
• Project management: 6%
• WTG: 35%:
• Blades: 7%
• Rotor subassembly: 4%
• Nacelle: 18%
• Tower: 6%
• Foundations: 20%
• Electrical and BoP: 15%
• Cables: 5%
• Substation: 7%
• BoP: 3%
• Installation: 20%:
• Turbine install: 6%
• Foundation install: 10%
• Cable install: 4%

The Oxford multipliers (developed by Oxford Economics) are used to estimate direct O&M labour requirements and indirect economic impacts. These estimate that 19 full-time equivalents (FTEs) will be required to operate and maintain 1 GW of offshore wind. Inch Cape estimated labour force using a bottom-up analysis with 11 FTEs per GW of deployment.

B.2.2 Scottish Government (2017): Scottish Energy Strategy: The Future of Energy in Scotland, December 2017.

Target to reach 50% of energy to be provided by renewable sources by 2030.

B.2.3 National Grid (2017): Future Energy Scenarios, July 2017.

Electricity demand by 2050 expected to be between 321 TWh (Steady State) and 383 TWh (Consumer Power).

B.2.4 National Grid (2017): Electricity Ten Year Statement 2017, UK electricity transmission, November 2017.

By 2035, scenarios suggest a total Scottish generating capacity of between 13 and 25 GW.

B.2.5 Marine Scotland (2011): Blue Seas – Green Energy: A Sectoral Marine Plan for Offshore Wind Energy in Scottish Territorial Waters, Part A, The Plan.

Ports and harbours present viable locations to service the associated construction and maintenance activities. Scotland well placed to capture on-third of the total UK Supply chain market, potentially securing £100 billion of investment.

B.2.6 Smart G & Noonan M (2018): Tidal Stream and Wave Energy Cost Reduction and Industrial Benefit: Summary Analysis

Tidal stream industry could generate net cumulative benefit to UK of £1,400 million by 2030, consisting of £1,600 million from GVA from the domestic market and £1,100 million GVA from exports, offset by £1,300 of revenue support. This would support a total of almost 4,000 jobs by 2030 and 14,500 by 2050.

Assuming a 10 year lag behind tidal stream, wave energy could add a net cumulative positive impact to the UK of £4,000 million by 2040, consisting of £1,500 million GVA from the domestic market and £3,700 million GVA from exports, offset by £1,200 million of revenue support. This could support 8,100 jobs by 2040.

50-60% of the economic impacts in terms of GVA and jobs are expected to be generated in coastal areas.

The UK marine energy supply chain is world-leading. Many companies offer site development services, offshore operations services and bespoke engineering. Some companies have diversified or reverted to other sectors but capability remains strong in several sectors.

The Marine Energy Supply Chain Gateway (MESCG)^[51] lists more than 850 companies, spread across the UK, currently active or able to participate in the sector. However, other countries have identified wave and tidal stream energy as a major opportunity for energy supply and economic growth.

A 2016 analysis by economic development agencies in the South West, Wales and Scotland estimated that around 1,700 people currently work in the UK wave and tidal sectors with roughly £445 million spent to date in the UK supply chain.

The UK has existing skills in:

• Subsea engineering
• Offshore foundation design
• Manufacture and marine operations

There are also crossover skills in electrical grid connections.

UK companies are expected to retain a majority of the domestic supply chain activity. There is export potential in some segments of the supply chain:

• Small, high-value easily transportable electrical components
• Wave and tidal device design
• Expertise in installation techniques
• O&M strategies
• Environmental surveying
• Project development and management

New jobs will be supported and will continue to be concentrated in distinct regions and will grow primarily from existing UK industries where there is strong absorptive capacity, especially offshore wind, oil & gas, steel and maritime, through companies diversifying into marine energy.

Supply chain clusters are forming in the UK, primarily in areas local to deployment. These include Shetland, Orkney, and North-West Scotland (also South West England, Solent/Isle of Wight, Wales and Northern Ireland).

Percentage of UK content by type of project for tidal stream are:

• Tidal platform: 65%
• Foundations/moorings: 80%
• Electrical: 70%
• Installation: 60%
• Other capex: 72%
• O&M: 75%
• Development: 75%
• Total: 70%

Percentage of UK content by type of project for wave energy are:

• Wave energy converter: 65%
• Foundations/moorings: 80%
• Electrical: 70%
• Installation: 60%
• Other capex: 72%
• O&M: 75%
• Development: 75%
• Total: 70%

Tidal industry participants need visibility of a steady project pipeline of an estimated 100 MW per year from 2022 up to at least 2 GW to mobilise the supply chain investment required.

B.2.7 Ironside Farrar (2018): Tiree Onshore Scenario Mapping, Executive Summary and Ironside Farrar (2018): Tiree Onshore Scenario Mapping, Final Report

Four potential O&M scenarios relating to operations and maintenance activity:

1. Onshore O&M base: an onshore base on the island with up to five workboats and one helicopter accessing the array. Requires a harbour or breakwater;

2. Offshore O&M base (platform): an offshore platform located within the array with workboats and one helicopter stationed on the platform;

3. Offshore O&M base (mothership operating from mainland port): two motherships, stationed within the array, with daughter workboats and one helicopter stationed on the mothership working from a mainland port;

4. Onshore O&M base/mothership (operating from Tiree): a combination of scenarios 1 and 3 with an arrangement based on motherships/daughter workboats working within the array, with the motherships and helicopter working from a Tiree base. Requires a harbour or breakwater.

Scenario 1: direct employment 150 array jobs (50% increase in current jobs base of island) and 50 net additional jobs from indirect employment. Estimated population increase of c 140 with 26 to 33 new homes and other refurbished. 7 to 12 return flights per day from the helipad. Additional 9 primary and 7 secondary school pupils. Around 30-50 existing jobs would need to be back-filled as a result of residents choosing to work on the proposed array. Of the 150 FTE jobs, 38 would be available to local people with 112 for people relocating to the island.

Scenario 2: direct employment 5 array jobs (2% increase in current jobs base of Tiree), very limited additional jobs from indirect employment. Population increase of c5, with 2-3 new homes. Helipad for emergency use although may be opportunity for fortnightly flights for Tiree based employees. No requirements for additional school places; school leaver/adult skills will be advanced. No substitution issues over existing jobs with none of the jobs being based on Tiree.

Scenario 3: direct employment of 25 array jobs (8% increase in current jobs base of island), 5 net additional jobs from indirect employment on Tiree. Estimated population increase of c24 with 4-6 new homes. Helipad limited to emergency use although may be opportunity for fortnightly flights for Tiree based employees. Helipad 1-5 flights per days. Additional 2 primary and 1 secondary pupils. 5-10 existing jobs would have to be back-filled. Around 25 FTE jobs would be generated on Tiree with 6 for local people and 19 for those relocating to the island.

Scenario 4: direct employment of 59 array jobs (19% increase in current jobs base of island) and 30 net additional jobs from indirect employment. Estimated population increase of c56 with 10-13 new homes and others refurbished. Helipad 1-5 flights per day and additional 4 primary and 3 secondary school pupils.

A critical requirement in delivering positive impacts to the Argyll & Bute economy and to local communities is the development of community capacity and advance programmes associated with skills development and training. 10-15 jobs would have to be back-filled with 59 FTE jobs generated, of which 15 would be available to local people and 44 for people relocating to the island.

B.2.8 BVG Associates (2014): UK Offshore Wind Supply Chain: Capabilities and Opportunities, report prepared by BVG Associates for the Department for Business, Innovation and Skills, January 2014.

Breakdown of undiscounted capital and operational costs of a typical offshore wind farm (based on a 500 MW farm using 6 MW wind turbines and jacket foundations using a combination of real project and modelled data).

• Development and project management: 2%
• Wind farm design: 1%
• Surveys: 0.3%
• Project other: 1.6%
• Wind turbine supply: 26%
• Turbine assembly: 1%
• Blades: 7%
• Castings and forgings: 2%
• Drive train: 8%
• Tower: 4%
• Turbine other: 4%
• Balance of plant: 19%
• Subsea export cables: 2%
• Subsea array cables: 1%
• Substations: 7%
• Foundations: 8%
• Balance of plant other: 1%
• Installation and commissioning: 14%
• Installation ports: 0.5%
• Turbine installation: 2%
• Foundation installation: 4.5%
• Subsea cable installation: 4%
• Installation other: 3%
• Operation, maintenance and service: 39%
• Operation, maintenance and minor service: 20%
• Major service: 7%
• OMS other: 12%

B.2.9 Highlands and Islands Enterprise (2017): Offshore Wind, www.hi-energy.org.uk, May 2017.

Region supports and strong and expanding supply chain.

B.2.10 Highlands and Islands Enterprise (2017): Infrastructure, www.hi-energy.org.uk, May 2017.

£163 million in investments made in infrastructure sites across Highlands and Islands since 2010. Ports and harbours in the Highlands and Islands have been resilient in adapting their offering to cover growing demand for inspection, repair and maintenance of offshore assets.

B.2.11 Wind Europe (2018): Financing and investment trends, The European Wind Industry in 2017, April 2018.

Germany and UK accounted for half of new Final Investment Decisions (FIDs) announced in 2017. This amounted to €5 billion in the UK (22% of the total). Offshore wind has seen an uptake in corporate finance transactions over the past two years, but offshore wind project finance has declined for new FIDs.

B.2.12 Wind Europe (2017): Wind Energy in Europe: Scenarios for 2030, September 2017.

Medium scenario: EU achieves a 27% renewable energy target.

Low scenario: failure to deliver the 27% target. Offshore wind energy pipeline is below 4 GW/year.

High scenario: EU-wide renewable energy target is increased to 35%. Deployment rate of 7 GW/year

In the UK, offshore wind power cumulative capacity is 22.5 GW (medium) with a range of 18 (low) to 30 GW (high).

B.2.13 Wind Europe (2018): Offshore Wind in Europe, Key Trends and Statistics 2017, February 2018.

The UK’s annual offshore wind capacity installations were 1,679 MW across 10 windfarms with 281 turbines connected (compared with Germany at 1,247 MW, Belgium at 165 MW, Finland at 60 MW and France at 2 MW).

Total installed capacity in the UK is 6,835 MW across 31 farms with 1,753 connected turbines. This is equivalent to 43% of all installations in Europe.

B.2.14 BVG Associates (2018): Scottish Offshore Wind Supply Chain, Gap Analysis Refresh, Update Report for Scottish Enterprise, September 2018.

Expenditure broken down into the following categories with figures for a nominal 500MW wind farm using 7MW turbines and jacket foundations (average installed turbine size has increased from 3.5MW in 2010-14 to 5.8MW in 2014-18). Project capex costs have been squeezed since previous study creating an increase in percentage of spending on opex from 38% to 42.6%. Total undiscounted cost of a 500MW wind farm is around £3 billion:

• Development and project management (6.2% or £185 million):
  • Wind farm design: 0.3% total expenditure, with potential opportunity for Scotland also of <1%
  • Surveys: 0.4%, opportunity of <1%
  • Project other, 5.5% (no data on opportunity)
• Turbine supply (16.3% or £490 million):
  • Turbine assembly: 0.7%, opportunity of <1%
  • Blades: 4.6% and opportunity of 3%
  • Casting and forgings: 1.1%, opportunity of <1%
  • Drive train (gearbox, generator and converters: 5%, opportunity of 3%
  • Towers: 2.2%, opportunity of 2%
  • Turbine other: 2.7% (no data on opportunity)
• Balance of plant (16% or £480 million):
  • Subsea export cables: 1.6%, opportunity of <1%
  • Subsea array cables: 0.8%, opportunity of <1%
  • HVAC/HVDC substations: 5.7%, opportunity of 4%
  • Foundations: 7.2%, opportunity of 4% (monopile), opportunity of 7% (non-monopile steel foundations) and opportunity of 7% (concrete foundations)
  • Balance of plant other: 0.7% (no data on opportunity)
• Installation and commissioning (15.6% or £470 million):
  • Installation ports: 0.5%, opportunity of <1%
  • Turbine installation: 2.2%, opportunity of 1%
  • Foundation installation: 4.5%, opportunity of 2%
  • Subsea cable installation: 4.2%, opportunity of 2%
  • Installation other: 3% (no data on opportunity)
• Operation, maintenance and service (42.6% or £1.3 billion):
  • Operation, maintenance and minor service: 20%, opportunity of 19%
  • Major service: 7%, opportunity of 5%
  • OMS other: 12.7% (no data on opportunity)
• Decommissioning (3.3%)

The report assesses the proportion of total available expenditure that could be potentially spent in Scotland and then the realistic amount of expenditure that could be expected to be retained in Scotland for a selection of the above activities:

• Development and project management:
  • Wind farm design and surveys: Scottish supply chain has an opportunity to capture around 20% of the UK expenditure. The size of the Scottish opportunity is limited due to the low spend on project development in comparison with other supply chain areas.
• Turbine supply:
  • Turbine nacelle assembly: negligible opportunity for the Scottish supply chain with no current of likely perspective supply chain capability. Turbine manufacturers have invested in Germany, Denmark and France.
  • Blades: Scottish supply chain has an opportunity to capture around 20% of the UK expenditure. Currently there is no Scottish blade manufacturing. Potential to establish a supply chain will be highly sensitive to the volume of installed UK offshore wind capacity.
  • Castings and forgings: not expected that Scotland will supply casting and forgings for future UK projects.
  • Gearbox, generator and converters: not expected that Scotland will supply drive trains for future UK projects. Turbine manufacturers are likely to use a single supplier who will be closely involved in design.
  • Towers: Scottish supply chain has an opportunity to capture around 40% of the UK expenditure. Scotland has capability to supply tower components but will face competition from non-Scottish steel production companies. There is also strong competition from cheaper and more established non-UK suppliers.
• Balance of plant supply:
  • Subsea array cables: not expected that Scotland will supply subsea array cables for future UK projects. Continued transition to larger turbines means reduced array cable lengths are required so there is no case for investment in UK supply. The opportunity remains for supply of lower tier cable components but there is strong competition from the existing UK supply chain.
  • Subsea export cables: Scottish supply chain has an opportunity to capture around 20% of the UK expenditure. Move to further offshore and a step change to higher export voltages means there is upward pressure on demand. There is currently no UK-based export cable manufacturing facility so any new infrastructure could be based in Scotland (potential investment from Asia).
  • HVAC substations: Scottish supply chain has an opportunity to capture around 20% of the UK expenditure. Very large and complex projects with supply very similar to offshore oil and gas platforms with demand expected to remain steady.
  • HVDC substations: Scottish supply chain has an opportunity to capture around 25% of the UK expenditure. Current demand is low but future offshore wind projects will be larger and located further offshore so will create a growing market. Up to four HVDC stations could be installed in the UK up to 2030. HVDC substations can be up to 5 times the mass of HVAC sub-stations.
  • Monopile steel foundations: not expected that Scotland will supply steel monopile foundations for future UK projects. Non-UK competition is well-established.
  • Non-monopile steel foundations: Scottish supply chain has an opportunity to capture around 30% of the UK expenditure. There is the potential to make use of existing Scottish supply chain associated with jacket foundations. Strong competition from other UK fabrication yards as well as from elsewhere in Europe.
  • Concrete foundations: not expected that Scotland will supply concrete foundations for future UK projects. The UK has moved away from use of concrete foundations and the market is not expected to materialise with negligible potential for the supply chain.
• Installation and commissioning:
  • Installation ports: Scottish supply chain has an opportunity to capture around 20% of the UK expenditure. Scotland has several port locations suitable for support installation but some components may be installed directly from manufacturing facilities outside Scotland.
  • Foundation installation: Scottish supply chain has an opportunity to capture around 5% of the UK expenditure. There remains little economic capacity for large vessel construction in Western Europe and none in the UK.
  • Subsea cable installation: Scottish supply chain has an opportunity to capture around 8% of the UK expenditure. No change in outlook with Scottish expertise maintained from historical strengths in offshore telecoms and oil and gas industries.
  • Turbine installation: Scottish supply chain has an opportunity to capture around 10% of the UK expenditure. Oil and gas industries are origin of UK expertise and there is no change in outlook.
• Operation, maintenance and service:
  • Operation, maintenance and minor service: Scottish supply chain has an opportunity to capture around 20% of the UK expenditure. Opportunities exist for monitoring the performance of the wind farm, planning maintenance schedules, responding to liability issues, spare part supply, project management and various maintenance tasks. Strong supply chain synergies with oil and gas sector. Increased use of autonomous vehicles, remote operation, drone inspection and enhanced condition monitoring technologies are being used to improve safety and reduce operational costs.
  • Major service: Scottish supply chain has an opportunity to capture around 10% of the UK expenditure with no change in outlook. Major repairs are likely to be carried out the many of the same companies in the installation supply chain as well as the larger companies also providing minor service supply. Subsea cable and blade repairs are potential areas where Scottish companies may secure increased market share due to logistical advantage of a local supply. There may also be some opportunities for ports providing services to larger vessels and in the longer term for refurbishment and vessel conversion services.