Scotland's offshore wind route map: developing Scotland's offshore wind industry to 2020

ANTICIPATED OFFSHORE WIND DEVELOPMENT TIMELINE

Whilst development timelines will vary per project, the timeline below gives a generic overview of the key phases of development and anticipated milestones.

ISSUES TO BE ADDRESSED

This Route Map identifies the key issues that OWIG believes could potentially hamper (and delay) offshore wind development in Scotland, unless the necessary priority actions are taken now. The key issues to be addressed are:

Fit for purpose infrastructure

Existing infrastructure is thought to be insufficient to support significant offshore wind project deployment. Key infrastructure requirements for the sector include: sites for manufacturing, installation and operations and maintenance supply chain with access to appropriate load out quayside at ports, vessels, buildings to house fabrication facilities, control centres, office facilities and housing for personnel.

Appropriate supply chain

The scale of the offshore wind opportunities both in Scotland (and the rest of the UK) means there will be great demand from developers for services, infrastructure and skills within the same timeframe. There is a risk that Scotland's indigenous supply chain may not be adequately prepared in time to meet and take advantage of the opportunities that will exist both north and south of the border and further afield.

Ongoing Innovation of technologies and practices

There is a real need to drive down the costs of offshore wind development, developers estimate by approximately 30%, reducing the risk to developers and guaranteeing the delivery of the proposed developments across the UK by 2020. The ongoing innovation and development of new and existing technologies and operations will be a factor in driving down current costs, stimulating greater confidence in the technologies and attracting private investment.

Regulation of and access to the electricity grid

Despite the boost to renewable energy generation in Scotland from the positive decision on the Beauly-Denny transmission upgrade, there is a concern that the UK's existing grid infrastructure is unable to support the considerable amount of new capacity coming from offshore renewable sources, especially offshore wind. Whilst the Electricity Networks Strategy Group ( ENSG) report identifies necessary infrastructure works to be undertaken, there is a risk that these upgrades will not be ready alongside developers' timelines. A lack of grid infrastructure and uncertainty around the proposed Offshore Transmission ( OFTO) regime could also delay developments.

Managing the marine environment

As the users of Scotland's seas continue to grow, managing the marine environment for a number of important uses is a challenging and complex task. Marine Scotland, the lead marine management arm of the Scottish Government, is responsible for managing Scotland's seas in an economic and environmentally sustainable way. They are supporting the introduction of this new offshore renewables industry into Scotland's seas through a Plan for Offshore Wind Energy with a supporting Strategic Environmental Assessment, the Marine (Scotland) Act also allows Marine Scotland to develop marine spatial planning and introduce new licensing procedures. There is, however, recognition of the challenges they face in doing so including resource issues, rapid transferring to a new regime, streamlining of processes and consistency with other planning regimes in UK waters.

Necessary and available skills

Companies across the UK involved in the renewable energy industry have reported difficulties in recruiting skilled personnel in, for instance, the fields of engineering (electrical, mechanical), design, project management and the marine environment. This is due in part to a general shortage of graduates specialising in such disciplines in the UK, combined with a difficulty in attracting experienced personnel from other sectors due to competition with other more established industries (in particular, the oil and gas industry). This will be exacerbated by competition for skills from the construction and other engineering sectors.

Finance

Tackling the issues above, in line with developers' timelines, will take investment of unprecedented sums of money, on levels way beyond Government's and utilities current expenditure limits. Therefore, innovative funding solutions must be sought to attract the significant levels of private sector investment needed if the offshore wind sector is to deliver as planned. This challenge is heightened given the current economic climate.

Securing support of local communities and existing users of the sea

Whilst offshore wind development will bring unprecedented economic and environmental opportunities to Scotland, it is key that the offshore wind sector engages directly and frequently with local communities, interested parties and existing users of the sea to secure their support for the developments being taken forward.

Competition

A substantial amount of experience has been gained by continental EU companies in the environmental, design, construction and operation of UK and EU offshore wind farms. It is clear that Scottish companies will face experienced competition from EU companies for work in construction and supply chain. In addition, there will be competing demands for the offshore & subsea expertise from continued oil & gas exploration and production, decommissioning, carbon capture & storage and offshore wind.

Timing

Further to the challenges above, timing will be the crucial factor for Scotland in securing the greatest benefit from this offshore wind opportunity. The challenges above, particularly in relation to adopting the Plan and SEA for offshore wind energy, must be addressed in line with developers' timelines. If progress lags in any of the above mentioned areas, there is a real risk of failure to deliver the proposed projects by 2020 and securing the economic and environmental benefits which flow from these projects. There are also a range of current policies in development that will directly affect the progression of the offshore wind sector. Their impacts will need to be managed in harmony with the development timelines set out previously. These include the publication of a national Marine Plan by spring 2012 and the Inshore Marine Regions to be drawn up by Marine Scotland. The Marine Scotland Act 2010 also commits Scotland to the establishment of a network of Marine Protected Areas to protect biodiversity and geodiversity. It is intended this network will be substantially in place by the end of 2012.