Sectoral marine plan for offshore wind energy: context report

5 Offshore Wind Development in Scotland

5.1.1 Scotland has an estimated 25% of Europe’s offshore wind resources and therefore has significant potential for offshore wind development.

5.1.2 Exploiting offshore wind technology in an environmentally sustainable way will enable Scotland to lead the world in the transition to a low carbon economy over the next four decades and will help meet Scotland’s wider objectives on climate change, generating substantial new economic activity, jobs and prosperity potential for Scotland.

5.1.3 The first commercial scale offshore wind farm in Scotland - Robin Rigg in the Solway Firth – came into operation in 2010, with an installed capacity of 174 MW.

5.1.4 In 2011 The Scottish Government published its plan for offshore wind development in Scottish Territorial Waters – Blue Seas Green Energy ^[13] . This plan included 6 short-term option sites and a number of medium-term areas of search for further consideration. Of the 6 short-term option sites, 3 have progressed to consenting: Beatrice in the Moray Firth, and two East coast sites - Inch Cape and Neart na Gaoithe. Beatrice is currently in construction and is due to become operational in 2019 with an installed capacity of 588 MW. Three of the sites – Argyll Array, Islay and Forth Array are no longer being progressed.

5.1.5 As part of the UK 3rd offshore wind farm leasing round, two Round 3 sites are being progressed in Scottish waters:

• Firth of Forth Offshore Wind Zone (SeaGreen Alpha and Bravo) off the coast of Fife - . it is intended that the zone will be developed in two phases with Phase 1 (1.05 GW) in the northern area of the Zone being developed first, followed by Phase 2 (1.4 GW) in the south-eastern area; and
• Moray Firth Offshore Wind Zone – the zone is being developed in two main phases. Moray East (950 MW) obtained a contract for difference in September 2017 and the first part of zone is due to become operational in 2022/2023. Moray West (750 MW) is in the early stages of planning.

5.1.6 In 2013, a Draft Sectoral Plan ^[14] for progressing ten medium-term option areas was published for consultation. The Plan remains to be finalised. This is the result of market uncertainty created by Electricity Market Reform. In December 2014, Scottish Ministers decided not to progress two of the option areas located in South West Scotland and these were removed from the draft Plan.

5.1.7 In the last two years, Scottish Ministers’ have given consent to a number of demonstration scale (<100 MW) projects in Scottish Waters, with the potential to demonstrate an array of innovative and new substructure technologies. It is the intention that these projects will be constructed and commence operations over the coming few years. These include the following floating offshore wind demonstration projects:

• 30 MW Hywind Scotland Pilot Park off Peterhead which started generating power in October 2017;
• 50 MW Kincardine Offshore Wind Farm off Aberdeen which was granted consent in March 2017; and
• 12 MW Dounreay Tri-floating Wind Demonstration Project off Dounreay which was granted consent in March 2017.

5.1.8 As at May 2018, Scotland had 217 MW of installed offshore wind capacity, but with a further 4.2 GW in construction or consented and awaiting construction ^[15] . A map of existing and planned projects is provided in Figure 1.

Figure 1: Existing and Planned Offshore Wind Development in Scottish Waters

5.1.9 The pace of future offshore wind development will, to a considerable extent, be governed by the availability of Contracts for Difference (CfD), the subsidy regime introduced by Electricity Market Reform ( EMR), unless levelised cost of electricity LCOE initiatives result in offshore wind development project bids becoming subsidy free. The future availability of CfD will also depend on the offshore wind industry achieving planned cost reductions. Recent progress with cost reduction is encouraging with very significant reductions in the strike price achieved for offshore wind farm projects in the second round of CfD allocations announced in September 2017 ^[16] . As the CfD regime is UK-wide, Scottish offshore wind farm projects have to bid competitively with other UK offshore wind farm projects.

5.1.10 The Scottish Government believes that Scotland's people should benefit from offshore renewable energy projects. Scotland, and its local communities, should receive a direct and lasting legacy from the exploitation of its natural resources. Proposals to maximise community benefit from renewables were published in a consultation paper "Securing the Benefits of Scotland's Next Energy Revolution" in November 2010 ^[17] . These included actions designed to empower communities and ensure that the public sector leads by example in delivering real and lasting benefits. The CfD regime also requires developers to prepare a local content plan.

5.1.11 In conjunction with Scottish Enterprise and Highlands and Islands Enterprise, The Scottish Government is taking forward a number of initiatives to support development of the Scottish offshore wind industry and supply chains. In particular, the National Renewables Infrastructure Plan ( NRIP) identifies potential investment locations to support the development of the offshore renewables sector ^[18] . A number of ports are already supporting the construction of Beatrice Offshore Wind Farm including Wick, Nigg, Cromarty Firth and Buckie. Peterhead and Aberdeen have also provided important construction support for the European Offshore Wind Deployment Centre. Ports such as Montrose and Dundee have made major investments to support offshore wind construction and operations and maintenance (O&M) activity on the East Coast.

5.1.12 Argyll and Bute Council worked in partnership with the Scottish Government, Marine Scotland, Highlands and Islands Enterprise and The Crown Estate to examine and better understand the potential onshore implications associated with the proposed Argyll Array off Tiree ^[19] . Community and stakeholder engagement was central to the process. The project sought to map the onshore implications arising from four operation and maintenance scenarios identified by the developer relating to the associated construction, operational and maintenance requirements of the offshore wind farm development, looking to optimise the socio-economic benefit to the island and mitigate the negative consequences of each scenario.

5.1.13 Implementing and sustaining local content is critical for Scotland to realise the benefits of offshore wind. A supply chain mapping exercise for the North East and East coasts of Scotland identified significant potential for developing local supply chains, both to support manufacturing and O&M ^[20] . Particular manufacturing opportunities have been identified around blade manufacture and substation construction. A number of North East and East coast ports are well placed to provide O&M support. However, for supply chains to invest in building capacity, there needs to be sufficient confidence in the market opportunities. Scotland has existing engineering, project management and marine engineering expertise which has and is well placed to provide services to developers design and install projects, we are therefore well placed to secure high quality jobs required by the offshore wind sector.

5.1.14 Significant offshore wind development will also require development of the national electricity grid. In particular, expansion of Scottish offshore wind capacity will require improved connectivity both within Scotland and between Scotland and England to facilitate the export of electricity ^[21] . A number of projects to provide improved connectivity are currently being taken forward. The 2.2 GW Western HVDC connection links Hunterston and The Wirral and is expected to be commissioned in 2018. The 1.2 GW Caithness Moray link is also expected to become operational in 2018. Work is ongoing to gain approval for and construct the 450 MW Western Isles link which will run between Beauly and the Isle of Lewis. The development of improved grid connectivity also provides an opportunity for islands to develop clean energy projects. Interconnectors for both Orkney ^[22] and Shetland ^[23] are both registered at an early development phase by Scottish and Southern Electricity Networks.