Scottish Offshore Wind Market

Paul O’Brien DeepWind Cluster May 2020

Pacific Orca at Beatrice Project Source – SSE Industrial Contents

Strategy • Sector Deal – UK target

DeepWind • DeepWind Cluster The North of Scotland • Current Scottish and UK Markets Offshore Wind Sector Deal Cluster • ScotWind Leasing Round • Net Zero in 2050 • Energy Transition

2 Five themes Offshore Wind • Ideas (Innovation) • Business Environment (Supply Chain) Sector Deal • Infrastructure • People (Employment, Skills and Community) • Place (Clusters)

Sector Deal Ambitions • 40GW of offshore wind capacity by 2030* • £72bn investment in UK infrastructure* • A fivefold increase in exports to £2.6bn p.a. • A £2.4bn reduction in electricity costs to consumers • 27,000 skilled jobs (30-40% female)

*increased from 30GW to 40GW in January 2020 3 DeepWind Offshore Wind Supply Chain Cluster

4 The Cluster • Hub and spoke structure • Hub centred on Moray Firth and Aberdeenshire Coast Stornoway and Arnish projects (Place) • Spokes extending to centres of offshore fabrication activity and port infrastructure in other Montrose areas of Scotland

5 • Active from May 2019

• Currently 307 members and still growing Membership • Membership Includes • 15 Offshore Wind Developers Largest offshore wind • 1 OEM Turbine Manufacturer cluster in the UK • 5 Tier 1s • UK’s Lead Floating Wind 4 Councils (Local Government) Cluster • 4 Universities and 4 Colleges • 3 Associations- AREG, Decom North Sea and Subsea UK • 271 supply chain companies from micro SMEs to multi-national companies

6 Members Subsea companies

7 Scotland’s Offshore Wind Market Now and tomorrow

8 ScotWind Leasing Round Draft Plan Options (8-10GW) SITE DEVELOPER CAPACITY DPO Robin Rigg E.ON 180MW DPO subject to high levels of ornithological constraint DPO subject to need for further level survey and assessment 30MW Aberdeen Bay Vattenfall 93MW 908MW Beatrice Demo SSE 10MW Levenmouth ORE Catapult 7MW Beatrice SSE/Red Rock Power 588MW Kincardine Cobra 50MW Beatrice 1000MW Moray East Moray East EDPR/Engie 950MW Moray West Inch Cape Red Rock Power 1000MW Seagreen SSE 1075MW Hywind Scotland (454MW CfD) Kincardine 3385MW Aberdeen Bay NNG EDF Renewables/ESB 448MW (CfD) (EOWDC) Moray West EDPR/Engie 850MW

Seagreen Phase 1 ForthWind Cierco 12MW (CfD)

Inch Cape Seagreen (2) SSE 1400MW Seagreen Phase 2 2300MW NNG Seagreen (3) SSE 900MW

Seagreen Phase 3

Current Wind Farms (7.6GW) By status

Operational Under construction Consented Robin Rigg Planned 9 ScotWind Leasing Round • Crown Estate Scotland’s ambition is for a further 8-10GW (£20-25bn investment) • Successful lease bidders will be announced in Quarter 1, 2021 • This could more than double Scotland’s existing 7.6GW pipeline (only 1GW built so far with another under construction) • Many of the DeepWind developers are taking part in the bidding process Scotland would become a world top ten offshore wind market

10 Indicative Capacity and Occupancy of Draft Plan Option Areas Potential Realistic maximum installed development scenario ScotWind Leasing Round Region DPO Area (km2) capacity (GW) for DPO (GW) Draft Plan Options (8-10GW) E1 3816 19.1 3 East E2 1287 6.4 2 E3 474 2.4 1 Subtotal 5577 27.9 6 NE1 776 3.9 2 NE2 464 2.3 1 NE3 339 1.7 1 NE4 440 2.2 1 North East NE5 496 2.5 1 NE6 699 3.5 2 NE7 1027 5.1 3 NE8 401 2 1 Subtotal 4642 23.2 12 N1 1163 5.8 2 N2 560 2.8 2 North N3 1106 5.5 2 N4 200 1 1 Subtotal 3029 15.1 7 West W1 1107 5.5 2 19GW Subtotal 1107 5.5 2 South West SW1 292 1.5 1 Subtotal 292 1.5 1

Total 14647 73.2 28

11 • Major UK projects from DeepWind members • Scottish Power’s East Anglia Hub project • Three wind farms totalling 3.18GW

12 • Major UK projects from DeepWind members • SSE Renewables and Equinor – Dogger Bank • Three wind farms totalling 3.6GW

13 SOFIA • Major UK projects from DeepWind members • Innogy SE’s Sofia project • 4th on Dogger Bank of 1,400MW

14 Net Zero in 2050 A projection

15 UK Offshore Wind the rise of

40GW hydrogen and Net Zero by 2050

16 Shell announced in February a 10GW offshore wind to green hydrogen project in the Netherlands with partners Gasunie and Groningen Port

Aims to have 3-4GW of offshore wind producing hydrogen by 2027 and the full 10GW in place by 2040

Annual production will reach 800,000 tonnes of hydrogen by 2040

17 Energy Transition Net Zero Basin by 2035

18 Net Zero Basin Options

Image courtesy of Oil and Gas Authority

19 UKCS to be a Net Zero Basin by 2035 • Electrification using offshore wind and interconnectors • 3-4GW of offshore wind required. • NorthConnect interconnector “too far Electrification of down planning road to incorporate changes” North Sea – scale • Highest demand in the of opportunity Central North Sea (CNS) and the Northern North Sea (NNS) • Initial opportunities to come prior to ScotWind leasing round – an interim market for floating wind

20 Image courtesy of Oil and Gas Authority Scotland’s Zone (REZ) and Gas Importation and Storage Zone (GISZ) Shell 10GW project = 800,000 tonnes per annum – E1 site?

1 tonne H2 = 33MWh 40GW? t Scottish annual gas demand Future of the around 47,700GWh t North Sea or 1,445,454 tonnes of hydrogen from around 18GW of offshore Energy Transition wind.

The wind resource in Scotland’s 19GW REZ could be harnessed to deliver the UK’s hydrogen gas demand for 2050

Image courtesy of Marine Scotland

21 Thank you To join DeepWind sign up on www.offshorewindscotland.org.uk or Email:- [email protected]

Pacific Orca at Beatrice Project Source – SSE