Offshore Wind UK

Market Study 2011

A common initiative with

Preface

Strong Norwegian competence lies within the offshore sector and stems from more than 100 years of maritime shipping and North Sea oil and gas activities. The fine-tuned capabilities are now transferred to the offshore wind sector for technology and services conceptualisation. Companies developing the North Sea wind resources could benefit from the lessons learned in Norway and add complementary expertise in order to achieve their targets.

In order to inform the Norwegian offshore industry participants about the opportunities in the two most important markets for offshore wind competence, Innovation Norway and INTPOW – Norwegian Renewable Energy Partners have collaborated to commission two studies - Offshore Wind Germany and Offshore Wind UK, both inspired by the two Norwegian Offshore Wind Clusters Arena NOWand Windcluster Mid-Norway.

In order to promote the Norwegian offshore wind capabilities, Norwegian Renewable Energy Partners – INTPOW and Innovation Norway have also commissioned a market Study and mapping of the emerging Norwegian offshore wind supply chain.

Innovation Norway Innovation Norway promotes nationwide industrial development profitable to both the business economy and Norway‟s national economy, helps to release the potential of different districts and regions by contributing towards innovation, internationalisation and promotion. Norwegian Renewable Energy Partners - INTPOW INTPOW promotes the Norwegian renewable energy industries internationally and facilitates partnerships between Norwegian and international industry participants, including in offshore wind. It is a non-profit joint venture between the Norwegian renewable industry and the Norwegian Government.

BVG Associates

Contents

Contents ...... iii List of figures ...... iv List of tables ...... iv Executive summary ...... 1 Introduction ...... 2 1. Market conditions...... 3 1.1. Political targets ...... 3 1.2. Installation forecast ...... 3 1.3. Offshore turbines and balance of plant demand ...... 6 1.4. Installation services demand ...... 8 1.5. Funding ...... 9 1.6. Permitting frameworks ...... 10 1.7. Test and demonstration facilities ...... 11 1.8. Contracting standards ...... 11 1.9. Market barriers ...... 12 2. Market structure ...... 14 2.1. Stakeholder organisations ...... 14 2.2. Offshore wind farm developers and owners ...... 17 2.3. Offshore transmission owners ...... 18 2.4. Supply chain ...... 19 2.5. Industry alliances and consolidation ...... 24 2.6. Projects and supply chain structure ...... 26 2.7. Project details ...... 29 Endnotes...... 37

Contents iii

List of figures

Figure 1 Forecast annual and cumulative UK offshore installation to 2020...... 4

Figure 2 Indicative outlook for UK offshore installation to 2050...... 4

Figure 3 Geographic spread of UK offshore wind farms to 2020...... 5

Figure 4 Forecast UK turbine demand to 2020...... 6

Figure 5 Forecast UK turbine foundation demand to 2020...... 6

Figure 6 Forecast UK subsea export cable demand to 2020...... 7

Figure 7 Forecast UK subsea array cable demand to 2020...... 7

Figure 8 Forecast UK substation HVAC transformer and HVDC convertor demand to 2020...... 7

Figure 9 Forecast UK turbine and foundation installation vessel demand to 2020...... 8

Figure 10 Forecast UK subsea cable installation vessel demand to 2020...... 8

Figure 11 Potential UK east coast manufacturing cluster locations...... 9

Figure 12 Developer share of UK operating offshore wind farms (MW)...... 17

Figure 13 Developer share of UK offshore wind farms under construction (MW)...... 17

Figure 14 Developer share of UK offshore wind farms in planning (MW)...... 17

Figure 15 Suppliers of wind turbines to the UK offshore wind market from 2003 to 2011...... 19

Figure 16 Suppliers of turbine foundations to the UK offshore wind market from 2003 to 2011...... 20

Figure 17 Installers of turbines in the UK offshore wind market from 2003 to 2011...... 20

Figure 18 Installers of foundations in the UK offshore wind market from 2003 to 2011...... 21

Figure 19 Suppliers of export cable to the UK offshore wind market from 2003 to 2011...... 21

Figure 20 Suppliers of array cable to the UK offshore wind market from 2003 to 2011...... 22

Figure 21 Installers of export cable in the UK offshore wind market from 2003 to 2011...... 22

Figure 22 Installers of array cable to the UK offshore wind market from 2003 to 2011...... 23

Figure 23 Suppliers of substation electrical systems to the UK offshore wind market from 2003 to 2011...... 23

Figure 24 Breakdown of CAPEX costs for UK offshore wind farms in 2010...... 26

Figure 25 EPC supply chain structure...... 27

Figure 26 Multi-contract supply chain structure...... 28

Figure 27 UK offshore wind farm development sites (The Crown Estate, supplied April 2011)...... 30

List of tables Table 1 Abbreviations used...... 29

Table 2 UK project description...... 31

iv List of figures and tables

competition from overseas players who in many Executive summary cases have a long track record of delivery to the wind industry. General conditions It should be noted that, while the UK Government As part of its efforts to meet targets under the EU‟s and other public stakeholder bodies are actively Climate and Energy package, the UK Government encouraging interest from overseas companies in expects that about 30 per cent of its electricity will the UK offshore wind market, the intention is to need to be generated from renewable sources by increase collaboration, joint ventures and UK- 2020. In the longer term, the UK has also focused inward investment rather than the import committed to reducing its greenhouse gas of more goods and services. emissions to 80 per cent below 1990 levels by 2050. Projects The geographic spread of UK offshore wind activity Offshore wind is expected to play a fundamental up to 2020 is mainly focused on the North Sea with role in this shift in energy generation. A total UK almost 60 per cent of developments to be installed pipeline of more than 50GW of offshore wind off the east coast of the UK. capacity has already been established, along with structured frameworks for delivery and it is Approximately 20 per cent of capacity will be expected that 20-25GW of offshore wind capacity installed in Scottish waters, predominantly in the will be installed by 2020. This rapid rate of east, up to 2020 but, in the longer term, the installation is expected to offer significant development of floating foundations and improved opportunities to the supply chain, with a particular grid capacity may well allow offshore wind farms to focus on industrial development in the UK. Such be developed in areas of deep water and higher growth is dependent on some key market barriers winds close to the Scottish west coast. being addressed. The remaining capacity will be installed off the west Market mechanism. Current reforms to the UK‟s and south coasts of England and Wales. renewable market incentive mechanism must provide the same or improved level of support, as As the decade progresses, projects will be installed the economic case for offshore wind farm on higher wind sites in deeper waters further from development currently is marginal. Changes need shore and with larger turbines, creating new to be introduced in such as way that uncertainty challenges throughout the project lifecycle for wind causes minimal delay. farm developers and supply chain.

Planning reform. The Government has introduced Due to the increasing size of turbine components, reforms via the Localism Bill that will see the new manufacturing capacity is expected to be built Infrastructure Planning Commission replaced. Any near large deepwater port facilities. The focus of changes that are introduced should avoid adding the UK offshore wind market on the North Sea further delays into the development and consenting means that it is expected that clusters of process. development will be located on the major estuaries of the east coast of England and Scotland. Supply chain investment. Investment in the offshore wind supply chain is expected to amount Experience and innovation for the future to billions of pounds and the UK‟s pipeline of The UK‟s pipeline of projects has established a offshore wind projects has attracted a number of favourable foundation for future offshore wind the major Tier 1 suppliers to the point of development and the UK now holds significant committing to locate facilities in the UK. experience from developing and installing what will be heading towards 3GW of offshore wind plants by In parallel with this, the supply chain to these the end of this year. players needs to develop at all levels and especially at coastal locations. Early signs of this development Significant work is underway by the UK are now quite visible but UK suppliers, often seen Government and other stakeholder bodies to by the wind industry as risk averse, will face tough

Executive summary 1

encourage innovation and support the development of world class research and development facilities. Introduction The UK currently has the largest pipeline of offshore While the UK supply chain is still comparatively wind projects in the world with approximately young, recent years have seen a rapidly rising level 50GW of capacity installed, under construction or in of activity as new manufacturing capacity is planning. Massive investment will be required by planned and new and dynamic industry alliances the supply chain in order to meet the demand that and consortia are formed. this will create for turbines, foundations, cables, electrical systems and installation and O&M

services.

Offshore Wind UK: Market Study 2011 is a report prepared by BVG Associates for Innovation Norway and INTPOW to inform potential Norwegian suppliers about the opportunities and challenges the UK market presents.

The report introduces the main public and private stakeholders in offshore wind in the UK and explains today‟s key market barriers that project

developers face, including the challenges of sourcing funding and meeting planning

requirements.

It also explores the motivations behind the UK Government‟s support for offshore wind and its strong focus on securing UK-based activity and creating domestic jobs.

Our installation forecast through to 2050 is included as well as detailed demand breakdowns for key components and services. These look at both companies who have already supplied to existing

projects and the expected demand over the next 10 years.

Significant investment decisions are already being made to locate major offshore wind production centres in the UK and new entrants need to move quickly to identify potential partners and customers to be in a strong position to supply this rapidly expanding market.

2 Introduction

The Government also seeks to create a domestic 1. Market conditions supply chain to support this new sector that could generate an estimated 70,000 UK jobs by 2020.iii The value of these jobs could be further enhanced 1.1. Political targets as they are likely to be clustered around large industrial areas that are suffering from high levels Renewable energy generation in the UK is still at of unemployment. relatively low levels compared with much of the rest of the European Union (EU) and the country is “Offshore wind not only still heavily dependent on fossil fuels and nuclear provides clean, green, secure power generation for most of its energy. Work to change this situation is underway, driven by energy, the investment that challenging renewable energy targets and concerns comes with it is great for the about the energy security of supply. UK economy too.” Under the EU‟s Climate and Energy package, the UK Chris Huhne, UK Secretary of State is committed to sourcing 15 per cent of its energy for Energy and Climate Change from renewable sources by 2020.i The UK‟s target is based on its economic strength and high level of 1.2. Installation forecast renewable energy resources.

This target covers heat and transport energy Offshore wind development rounds consumption as well as electricity. Recognising that The development of offshore wind in the UK has it will be difficult to achieve much renewable growth been facilitated by The Crown Estate, which has in heat and transport by 2020, the Government renewable energy development rights on the UK expects that about 30 per cent of electricity will continental shelf (see Chapter 2 for more need to be generated from renewable sources if it information). To date, it has run three main rounds is to meet its overall target. of offshore wind development plus others focusing specifically on projects off the Scottish coast and The UK has also passed domestic legislation to demonstration sites. A further round in Northern unilaterally reduce its greenhouse gas emissions to Irish waters was announced in March 2011. 80 per cent below 1990 levels by 2050.ii Round 1 was announced in 2000 with an original In its 2009 Renewable Energy Strategy, the capacity of 1.5GW across 17 sites and was planned Government said that it expects a range of as a pilot phase in which the industry could build up renewable technologies to contribute to the future an understanding of the technical challenges of energy mix but there will naturally be a focus on offshore wind. Round 2 was announced in 2003 those that are both cost effective and can be with a further 15 sites and a planned capacity of deployed on a large scale. 7.2GW. More recently, extensions totalling a further 1.7GW were awarded to developers for existing or The UK has some of the best onshore and offshore planned sites from Rounds 1 and 2. In 2008, the wind resources in the world. While onshore wind is Scottish Territorial Waters round saw a further 10 expected to account for a significant share of the projects announced in Scottish waters with a total renewable energy capacity up to 2020, the stronger capacity of 6.4GW. wind resource and reduced planning restrictions offshore means that it is anticipated that offshore In January 2010, The Crown Estate announced the wind will play a much larger role beyond 2020. names of the development partners for nine Round 3 zones. This round marked a significant increase in As well as helping to meet legislative targets, the scale of development with a combined offshore wind improves the country‟s energy generation capacity of more than 32GW bringing security of supply by decreasing its reliance on the total UK pipeline of projects to 49GW. This is fluctuating fuel prices. It also reduces the UK‟s need expected to grow to more than 50GW with the for imported fuels at a time when political instability anticipated Northern Irish leasing round and new and growing world demand may affect supplies. demonstration sites.

Market conditions 3

While The Crown Estate has indicated that no By the middle of the next decade, some of the wind announcements will be made before 2014, it is farms installed in Rounds 1 and 2 will be understood a programme of further leases is likely approaching the end of their operational life. Rather to follow at some point. than completely decommissioning them, many will be “repowered” (replaced with new technology). We Installation forecast anticipate repowering of the first generation of These rounds represent a significant pipeline but offshore wind farms to include replacement of planning and financial issues have already resulted foundations, due to the expected increase in in the cancellation of some projects. Furthermore, turbine size, while offshore substations and export the challenges of coordinating the large number of cables may be partly re-used. approvals and procurement contracts required for a large offshore wind farm means that delays are also This results in a difference between the gross expected to some projects. installed capacity and the net generating capacity shown in Figure 2 up to 2050. Such a long term The market forecast in Figure 1 was prepared by prediction is necessarily indicative and is based on BVG Associates for The Crown Estate in February existing trends and an understanding of the likely 2011.iv This forecast is based on our understanding contribution of offshore wind to the EU energy mix. of the status of individual projects, the commercial By 2050, we envisage it is possible that a gross environment in which development and supply installed capacity of more than 150GW will have chain communities are working and an been installed in UK waters with a net generating understanding of existing and future renewable capacity of nearly 90GW. targets. For some of the supply chain, such as component While this report is focused on the UK market, it suppliers, the gross installed capacity is important, should be noted that most of the companies while the net installed capacity is more relevant to involved will also be looking to operate in the wider sectors involved in O&M, for example. EU market and will consider this when making investment decisions. 6 240

We anticipate that by 2020 the UK will have an 5 200 installed offshore wind capacity of almost 23GW 4 160 compared with around 2GW at the end of 2010. See Figure 1 for a breakdown of this installation 3 120 capacity by development round. By 2030, this will have risen to nearly 70GW. 2 80

5 25 Cumulative capacity (GW) Annual installed Annual installed capacity (GW) 1 40

4 20 0 0 '10 '20 '30 '40 '50

3 15 New build Repowering Cumulative (gross) Cumulative (net)

2 10 Figure 2 Indicative outlook for UK offshore 1 5

Cumulative Cumulative capacity (GW) installation to 2050. Annual Annual installed capacity (GW)

0 0 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20

R1 R2 R1/R2+ R3 STW Future Rounds Cumulative

Figure 1 Forecast annual and cumulative UK offshore installation to 2020.

4 Market conditions

Figure 3 shows that the geographic spread of the UK offshore wind activity up to 2020 is mainly focused on the North Sea with almost 60 per cent of developments to be installed off the east coast of England.

We forecast that approximately 20 per cent of capacity will be installed in Scottish waters up to 2020 but, in the longer term, the development of floating foundations and improved grid capacity may well allow offshore wind farms to be developed in areas of deep water and higher winds close to its west coast.

The remaining capacity will be installed off the west and south coasts of England and Wales.

East coast West coast South coast Scotland

Figure 3 Geographic spread of UK offshore wind farms to 2020.

Market conditions 5

1.3. Offshore turbines and balance By 2020, we expect that monopiles will only account for about 10 per cent of annual foundation of plant demand demand, with the remainder including steel structures such as jackets, tripiles and tripods. Turbines To avoid the environmental noise impact of driving Offshore wind turbines installed today typically piles, suction buckets designs have also been have a rated power of between 3MW and 5MW. The proposed as well as concrete gravity-based designs reduced cost of energy associated with larger which sit on the seabed. Concrete solutions also turbines means that turbine size will increase in the mitigate the risk of more volatile steel prices but future. The annual average rated power of installed the challenge of large scale production and a UK turbines is expected to remain similar to current market preference for proven steel designs mean levels until 2014 and then increase as larger units they are not expected to account for more than 10 are introduced up to an average of approximately per cent of foundation demand to 2020. 6MW by 2020.

1,000 5,000 Figure 4 provides a forecast of UK demand for offshore wind turbines over the next decade. We 800 4,000 expect that more than 4,000 turbines will be installed in UK waters by 2020, when it is predicted 600 3,000 that approximately 600 turbines will be installed each year. 400 2,000

200 1,000

1,000 5,000 number Annual offoundations Cumulative number offoundations 0 0 800 4,000 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 Number of monopiles Number of other foundations

600 3,000 Cumulative monopiles Cumulative other foundations

400 2,000 Figure 5 Forecast UK turbine foundation demand to 2020.

Annual number Annual ofturbines 200 1,000 Cumulative Cumulative number ofturbines Electrical systems 0 0 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 Future offshore wind farms will also tend to be built Number of turbines Cumulative considerably further offshore in the next decade,

which will create greater demand for export cables Figure 4 Forecast UK turbine demand to 2020. to connect them to shore. The high transmission losses of long distance AC cables means that a Turbine foundations significant portion of export cable demand will be With the exception of the 2007 Beatrice for high voltage direct current (HVDC) systems. demonstrator project and the Ormonde wind farm, Between 2011 and 2020, almost 7,000km of which is currently under construction, every UK subsea export cable will be required, of which more project installed to date has used cylindrical than 60 per cent is expected to be HVDC. As shown monopile foundations. in Figure 6, demand is expected to stay low until As can be seen in Figure 5, as projects are installed the middle of the decade when it will increase in deeper water with larger turbines, alternative sharply. There is concern within the industry that, foundation designs will be required that can handle without prompt investment in new manufacturing the greater loads and decreased wind loading capacity, there will be shortages in supply by 2015. frequencies.

Demand is naturally related to turbine demand but is offset because, as is the case today, foundations are installed a year before turbines.

6 Market conditions

for other high voltage electrical equipment such as 1,250 5,000 reactors and switchgear.

1,000 4,000

35 140 750 3,000 30 120

500 2,000 25 100 Annual Annual length (km)

Cumulative Cumulative length (km) 20 80 250 1,000

15 60 0 0 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 10 40

Length of HVAC export cable Length of HVDC export cable 5 20

Cumulative HVAC export cable Cumulative HVDC export cable Annual Annual number oftransformers/converters

0 0 oftransformers/converters number Cumulative Figure 6 Forecast UK subsea export cable demand to '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 Number of HVDC converters Number of HVAC transformers 2020. Cumulative HVDC converters Cumulative HVAC transformers

There are more manufacturers of medium voltage Figure 8 Forecast UK substation HVAC transformer subsea array cables used to connect the turbines to and HVDC convertor demand to 2020. the offshore substations and there are fewer barriers to new companies entering. As shown in Figure 7, however, total demand up to 2020 is expected to be more than 4,000km of cable for the UK market with a peak annual demand of almost 700km.

700 7,000

600 6,000

500 5,000

400 4,000

300 3,000 Annual Annual length (km)

200 2,000 Cumulative length (km)

100 1,000

0 0 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 Length of array cable Cumulative

Figure 7 Forecast UK subsea array cable demand to 2020.

There will also be significant demand for offshore and onshore substations and DC converter stations. As can be seen in Figure 8, up to 20 high voltage AC transformers and six high voltage DC converters will be required annually by 2020 for the UK market. There is currently concern over the supply of DC converter stations as they are only available from limited number of suppliers with proprietary technologies.

The construction of onshore and offshore substations will also generate considerable demand

Market conditions 7

1.4. Installation services demand Cable installation vessels Turbine and foundation installation The UK market is expected to require up to 10 vessels cable installation vessels by 2020, of which at least The offshore wind industry needs vessels with large two must be suitable for export cable installation. amounts of deck space, high transit speeds and cranes with hook heights of approximately 100m. A key challenge for the offshore wind industry is a This means that, while construction vessels from lack of export cable installation vessels with cable the oil and gas industry have been used in the past, carousels large enough to be able to carry the there are significant advantages in using purpose- length of cable required to connect wind farms built ships. located more than 100km offshore. Combined with high levels of competition from the interconnector Currently, the industry has a relatively small fleet market, this area of activity is considered a of specialist vessels but, while there have been potential bottleneck for development. concerns about a lack of investment, there now appears to be a strong pipeline of turbine and Array cable installation has proved technically foundation installation vessels under construction. challenging with problems reported on most projects. Many of these stem from pulling the cable As can be seen in Figure 9, by 2020 we estimate through the turbine transition piece or damage that up to eight turbine installation vessels will be during or after laying. required to serve the UK market plus a similar number of foundation installation vessels. 15 Furthermore, the expected growth in the size of turbines and foundations and the requirement to 10 operate further from shore in water depths of up to 50m means the vessels themselves will need to conform to more demanding specifications. 5

By the end of the decade, most projects will require vesselAnnual charter demand vessels capable of working in water depths of more 0 than 50m with a crane capacity of more than 750 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 tonnes. Number of export cable installation vessels Number of array cable installation vessels 15 Figure 10 Forecast UK subsea cable installation vessel demand to 2020.

10 Ports To date, the UK has seen a growing level of port 5 activity but has faced strong competition from the

Continent. Annual Annual vessel charter demand

0 Future construction port facilities are expected to '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 have a storage area of at least 12 hectares to allow Number of turbine installation vessels Number of foundation installation vessels for the laying out of turbine blades, towers and turbines in preparation for final delivery. In terms of quayside, ports will need at least 300m with Figure 9 Forecast UK turbine and foundation installation vessel demand to 2020. access for vessels up to 140m long and 45m wide with 8m draft. Such a facility is expected to be able to handle up to 500MW of installation traffic per year.

8 Market conditions

There is also an incentive for developers to use 1.5. Funding ports as close to the wind farm site as possible. This minimises the steaming time for a jack-up, Project funding which reduces weather risk and therefore increases turbine installation rates. It is estimated that the UK‟s offshore wind development will require more than £70 billion in Discussion with the industry suggests that investment by 2020. developers would prefer construction ports less than 12 hours steaming time from site (250km at To date, most of the UK‟s operating offshore wind 12 knots) and are unlikely to consider installing farms have been funded from the balance sheet of large projects from a port that is more than 24 asset owners without recourse to project finance. hours steaming time (500km at 12 knots) from the This investment has usually been provided by large wind farm. power utilities but a number of investors have also bought shares in projects. It is forecast that the UK market will require up to seven port facilities equivalent to that described Over the next 10 years, balance sheet funding is above. In reality, it is more likely that the majority expected to account for around half of the capital of activity will take place through a smaller number investment required with the partial-sale of of large clusters able to handle 1GW or more per completed wind farms expected to be an important year. vehicle for raising capital for new projects.

Due to the focus of the European offshore wind Although no UK wind farms have been project- market on the North Sea, it is expected that such financed yet, the scale of Round 3 means that clusters would be located on the major estuaries of banks will almost certainly need to become involved the east coast of England and Scotland. See Figure at an early stage. Interest from the financial 11 for locations of likely key locations. community is expected to grow as new ways of reducing risks are developed.

As a further means of encouraging investment, the Government has said it will establish a Green Investment Bank in 2012 with a £3 billion reserve, some of which may be used to unlock private - Tay investment by filling potential funding gaps caused - Forth by overstretched utility balance sheets or underwriting risk to reduce the cost of capital. - Tyne - Tees Supply chain funding

- Humber As well as the investment that is required in offshore wind farm hardware, significant investment in new capacity is also required by the supply chain. This includes funding for the research and development required to bring products to - Medway market and investment in manufacturing infrastructure and facilities.

The majority of this cost will be privately funded but public funding has also been made available. Figure 11 Potential UK east coast manufacturing cluster locations. It is forecast that approximately £2 billion will need to be invested in UK infrastructure by 2020 to

support the expected levels of activity.

In 2010, the Government advised that it would provide up to £60 million to support the

Market conditions 9

development of large scale offshore wind The new Government has stated that it intends to manufacturing facilities at port sites in England. replace the IPC in 2012 with the Major Infrastructure Planning Unit (MIPU). It is intended A further £70 million was also announced by the that this will maintain the IPC‟s timescales and devolved Scottish Government with similar processes but the final decision on whether to grant objectives. consent will be taken by the Secretary of State to provide democratic accountability. “We are making these investments so that major Consultees The IPC process has introduced a framework manufacturers will decide through which a range of public and private bodies that this is the place they are consulted on the plans of developers. This want to come and build their framework has been established to ensure that all the relevant stakeholder submit their views within offshore wind turbines.” an established timeframe. David Cameron, Prime Minister Statutory consultees which must be consulted for On a regional level, support for individual offshore wind projects include: the Environment companies has been delivered through the English Agency; Natural England; English Heritage; the Regional Development Agencies. Although some will Ministry of Defence; OFCOM (the be abolished by the current Government in 2011, telecommunications regulatory body); the Civil this support is likely to continue in some form Aviation Authority; the Marine Management through local economic partnerships (LEPs) which Organisation; and local authorities. are being introduced in their place. Non-statutory consultees are invited to participate Enterprise zones are also expected to be in the consultation process as well and include local established in the Tyne and Tees areas to businesses and residents as well as trade encourage offshore wind manufacturing activity by associations and special interest groups. Examples offering business tax relief for up to five years. relevant for offshore wind include the Chambers of Commerce, the Chamber of Shipping, the National 1.6. Permitting frameworks Federation of Fishermen‟s Organisations, Trinity House and the Royal Yachting Association.

Planning authorities An ongoing concern about the planning process is Since 2010, offshore wind projects with a capacity the possible delays caused by the need for of more than 100MW have been subject to the statutory and non-statutory consultees to feed into Infrastructure Planning Commission (IPC) for applications in a timely manner. Due to the current consent. The IPC was set up by the previous economic climate and government cuts, many of Government as an independent body to streamline these bodies have limited resources and may the planning process and reduce uncertainty about struggle to handle the rapidly increasing pipeline of timescales for obtaining a decision. offshore wind projects.

The IPC process is broken down into five stages: A further challenge for developers is that the IPC process requires them to have greater certainty - Pre-application consultation over the cumulative impact of their projects at an - Application earlier stage than previously demanded. The need to define the “maximum potential adverse effect” of - Acceptance of the application by the IPC a project could limit a developer‟s ability to - Examination of the application, and optimise the design of offshore wind farm once consent has been granted because it may need to - Decision. definitively establish its turbine and infrastructure According to the IPC, it should take a year to make choices and not be able to benefit from subsequent a decision from accepting an application. technology developments.

10 Market conditions

1.7. Test and demonstration Changes in the UK R&D landscape facilities The UK R&D landscape is currently undergoing significant changes. In 2010, the UK government The UK already has strong research and announced a new strategy to maximise the development (R&D) capability in a number of commercial impact of UK R&D and launched the sectors relevant to the offshore wind industry Technology Innovation Centres (TICs). These will including aerospace, environmental analysis, be a network of “elite” centres with different composites and some aspects of drive train specialities. Each TIC may consist of several centres, with an overarching management development. organisation. In recent years, increasing levels of R&D activity focussed specifically on offshore wind has The centres will have open access R&D facilities for developed across the country‟s universities, testing and prototyping and will be primarily run by research and technology organisations and private industry. Six centres have been announced and the companies. first that will be developed is the High Value Manufacturing TIC. Others that may be relevant to Funding the wind industry are the Energy and Resource Efficiency TIC and the Electronics, Photonics and Offshore wind R&D funding has been made Electrical Systems TIC. available in the UK from a number of sources. To date, funding sources have included the The intention is that much of the near to market Department of Energy and Climate Change (DECC) R&D in the UK will focus around these TICs with the (£30 million), the Carbon Trust‟s Offshore Wind university network providing underpinning Accelerator (£50 million) and the Energy research. Technologies Institute (ETI) (£15 million).

University research into offshore wind is generally 1.8. Contracting standards funded by the Engineering and Physical Science Research Council (EPSRC). The process of awarding major contracts in the offshore wind industry generally utilises a Facilities competitive tendering process in which bidders are subject to a rigorous evaluation of submissions Doctoral training centres. There are a number of against specific weighted criteria. universities with offshore wind-related centres of excellence supported by EPSRC. Centres of Standard requirements of purchasing organisations relevance to the offshore wind industry include: cover a company‟s health, safety and Wind Energy Systems (University of Strathclyde); environmental performance, experience, local E-Futures (University of Sheffield); Technology for knowledge and financial standing. Low Carbon Futures (University of Leeds); and the Advanced Composite Centre for Innovation and Suppliers will be expected to be aware of, and be Science (University of Bristol). A renewable energy able to comply with, the relevant provisions of: doctoral training centre is currently being planned.  UK health and safety legislation such as Research and technology organisations. There Construction (Design & Management) are a number of relevant open access R&D facilities Regulations 2007, Health & Safety at Work in the UK that provide both expertise and facilities Act 1974 and Management of Health and that are relevant to offshore wind. Two notable Safety at Work Regulations 1999 examples are TWI, which provides a range of services including reliability and asset management  Appropriate compliance with design and Narec, which houses the UK‟s only open access standards and methods of construction such full scale blade and drive train test facilities. as relevant marine environment DNV, BS and IEC codes, and

Market conditions 11

 Management systems such as BS EN ISO restricting the UK‟s onshore wind market both in 9001, 14001 and 18001 for quality, terms of the difficulty of obtaining permission for environmental and health and safety projects themselves, and for the necessary methodologies respectively. associated reinforcement of the electricity transmission network. 1.9. Market barriers A key justification for forming the IPC was to ensure that the major projects required to meet the The development of the offshore wind rounds by UK‟s renewable targets were not unreasonably The Crown Estate means that the UK offshore wind delayed. market currently has the largest defined pipeline of projects in the world. Market barriers still exist, While the Government has confirmed that the however, that could hamper progress. replacement for the IPC will maintain the same timescales, any changes that introduce further Market Mechanism. The UK‟s main market delay into the consenting processes are expected to incentive to develop renewable electricity discourage investment. generation is currently the Renewables Obligation (RO). This places an obligation on retailers of Supply chain investment. As discussed above, electricity to obtain an annually increasing the investment required for the development and proportion of their electricity from renewable construction of the UK‟s offshore wind farms is sources. Under its planned Electricity Market considerable. Investment in the supply chain is Reform, the Government has said it intends to comparatively smaller but is still expected to replace the RO with a feed-in tariff (FIT) which is a amount to billions of pounds and is required to fixed revenue that a wind farm owner receives for achieve the cost improvements that will be required the energy it sells. It is currently consulting on to sustain long term activity. whether to adopt a “contract for difference” or “premium” FIT. More information about the existing The UK‟s pipeline of offshore wind projects has and planned market support mechanisms can be attracted a number of the major Tier 1 suppliers to found in DECC‟s electricity market reform a point of committing to locate facilities in the UK. consultation document published in December To support this development, investment will be 2010.v required by the UK supply chain.

There have been concerns raised about the impact UK companies have often been seen by the wind that the proposed change could have on the UK‟s industry as risk averse to investing in new facilities. market. Unless the new regime provides the same One reason for this is a lack of confidence in the or improved level of incentive and risk for long term nature of the market due to the relative developers, there is risk that projects will not lack of UK onshore activity compared with the proceed. Continent, where there have been long periods of year on year growth. This market reform is being undertaken with the aim of reducing electricity price risk but the There are a number of reasons why it is in the uncertainty caused by replacing the existing interest of both the offshore wind industry and the scheme may also cause delays as developers UK government to support supply chain postpone making investment decisions until the development: impact of the reform is clear.  Growing a focussed supply chain for large Planning Reform. As discussed above, the components in and around the ports closest Government has introduced reforms via the to offshore wind farms offers significant Localism Bill that will see the IPC replaced. logistics savings.

Planning issues have already had an impact on the  There is a large amount of relevant wind industry by causing significant delays for experience available from North Sea onshore and offshore projects. The uncertainty operators in the UK‟s oil and gas sector. caused by the planning system has been blamed for

12 Market conditions

 As revenue from developers‟ UK wind farms will be in pounds, the fact that they can buy goods and services in the same currency means they can protect themselves from exchange rate fluctuations.

 The industry is expected to generate significant levels of employment and tax revenue.

 As well as serving the UK market, companies setting up facilities will also have significant export opportunities.

Supply chain events run by The Crown Estate have sought to educate companies about the opportunities offered by the industry as well as introducing suppliers to potential customers.

It should be noted that, while stakeholders are actively encouraging interest from overseas companies in the UK offshore wind market, the intention is to increase UK-focused inward investment rather than importing more goods and services. Indeed, the UK is unlikely to be satisfied with continued high levels of overseas content in domestic projects.

Market conditions 13

industry, the oil and gas industries and wildlife 2. Market structure groups. The UK Government An increasing number of companies from a range of sectors are already involved in the UK‟s offshore Department of Energy and Climate Change. wind market, ranging from multinational Until 2008, mitigating the impact of climate change conglomerates to small component manufacturers. had been the responsibility of the Department for Environment, Food and Rural Affairs (DEFRA) while Behind the scenes, various Government and non- energy policy was owned by the Department for governmental organisations are also working to Business, Enterprise and Regulatory Reform develop the structure and frameworks that will (BERR). The need to ensure these two policy areas support the industry. were aligned meant that in 2008 these two functions were merged to form DECC. This section identifies the key stakeholder organisations and industrial players and provides a The remit for DECC extends to Scotland, Wales and summary of the current market structure in each of Northern Ireland but not to the Isle of Man and the the main sectors. Channel Islands. Its main policy direction under the previous Labour Government was set out in the 2.1. Stakeholder organisations 2009 Renewable Energy Strategy which describes how the UK intends to meet its binding EU vi The Crown Estate renewable energy target described in Chapter 1. The current coalition Government has largely The Crown Estate is a private organisation that adopted these ambitions in its 2010 UK Renewable administers a large property and land estate and Energy Action Plan.vii pays its profits to the Treasury. Its portfolio covers urban property, the Windsor Estate, large rural DECC has sought to stimulate UK offshore wind holdings and its Marine Estate. supply chain activity and draw inward investment to the UK through grants to both wind turbine The Marine Estate covers most of the seabed out to manufacturers and suppliers. DECC also sets the the UK‟s 12 nautical mile territorial limit and policy on market support mechanisms and is the includes the rights to explore and utilise the natural host department for the Office of the Gas and resources of the UK continental shelf (not including Electricity Markets (Ofgem) (see below). oil, gas and coal). The Energy Act 2004 also gives The Crown Estate the right to license the Department for Business, Innovation and generation of renewable energy within the Skills. BIS is responsible for business support and Renewable Energy Zone out to 200 nautical miles. regulation as well as research and higher and further education. Its jurisdiction is mostly As discussed in Chapter 1, The Crown Estate has restricted to England although its research funding sought to exploit these offshore wind assets covers the whole of the UK, as does its promotion through a series of leasing rounds with a potential of overseas trade. total capacity of more than 50GW. Revenue is generated by The Crown Estate by charging BIS sets the UK‟s low carbon economy policy, in developers a seabed lease that is based on the close dialogue with DECC. It is overseeing the amount of revenue generated by the offshore wind allocation of the £60 million fund for offshore wind farms. port infrastructure announced in the Government‟s 2010 Spending Review. To assist with the rapid development of Round 3, The Crown Estate is co-investing with developers BIS delivers most of its impact through associated up to half of the cost of obtaining planning public bodies. It is the host department for UK consents. It also seeks to address issues common Trade and Investment (UKTI) which promotes to all projects such as seabed archaeology and overseas trade and inward investment through the works with key stakeholders such as the fishing UK‟s worldwide network of embassies and consulates. BIS also oversees regional economic

14 Market structure

development and inward investment which is Infrastructure Unit in the Department for mostly delivered through the Regional Development Communities and Local Government. Agencies (RDAs) and the devolved administrations (see below). Office of the Gas and Electricity Markets. Ofgem regulates the energy market across The RDAs have also delivered business support England, Scotland and Wales. Its primary role is to programmes and a number have treated offshore protect electricity and gas consumers by wind as a major strategic priority. As such, they maintaining healthy competition between providers have been important players in educating but it is also required to take account of the companies about the opportunities offered by environmental impact of the energy generated. offshore wind and providing support to businesses. Ofgem administers the RO but it does not set the level of support which is the responsibility of its The Coalition Government is abolishing the English parent department, DECC. RDAs in 2011 but it is anticipated that BIS will continue to provide business support funding Ofgem‟s role incorporates the regulation of the through a network of „local enterprise partnerships‟ offshore transmission network. So far, offshore (LEPs) that will replace some the functions of RDAs. wind farm developers have built and owned the grid connection but EU law means that the generating Devolved government assets and transmission network must now be Northern Ireland, Scotland and Wales have elected under separate ownership. Ofgem is currently administrations with devolved powers from central overseeing the transition of existing grid connection government. The power of each body is defined by assets to independent offshore transmission a separate piece of legislation and the scope of operators (OFTOs) to comply with this requirement. their responsibilities varies. Energy policy has Ofgem had initially proposed that future grid typically been retained by central government while connections would be built by the OFTOs but this economic development and planning has been raised concerns among developers that the devolved. In practice, the separation of energy connection may not be ready in time. It is now policy is not clear cut as the Scottish Government more likely that developers will build the connection has been able to stop new nuclear power stations but then transfer the asset to an OFTO once the being built despite the decision nominally falling to project is completed. central government.

The Scottish and Northern Ireland governments Electricity transmission have also set up public bodies, including Scottish The UK onshore high voltage transmission grid is Development International and Invest Northern operated by National Grid in England and Wales, Ireland, to supplement the work of UKTI. Scottish Power and Scottish and Southern Energy (SSE) in Scotland and Northern Ireland Electricity in Regulators and consenting bodies Northern Ireland. National Grid transmission is Infrastructure Planning Commission. The IPC typically at 275kV or higher while the Scottish and was established in 2009 to streamline the planning Northern Irish grids are at 132kV and 33kV system for nationally significant infrastructure respectively. projects and overcome the lengthy planning National Grid is also the National Electricity process that has affected a number of high profile Transmission System Operator (NETSO) for projects. England, Scotland and Wales, so is responsible for In England, it examines applications from the overseeing and managing the flow of electricity energy, transport, waste water and waste sectors across the whole of the transmission network. This while, in Wales, it examines applications for energy includes the elements owned and operated by and harbour developments. The current coalition Scottish Power and Scottish and Southern Energy. Government has stated that it will abolish the IPC, Connections for new generators such as offshore leaving the final decision with the Secretary of wind farms are also co-ordinated by National Grid. State. The process will be retained within a Major

Market structure 15

Acting in its role as NETSO, National Grid publishes an annual Offshore Development Information Statement, which aims to help the development of a coordinated and economical offshore electricity transmission system.viii

Scottish Power, SSE and National Grid all also have interests in the development of offshore wind projects beyond their transmission remits.

As power generators, Scottish Power and SSE both have significant portfolios of developments while National Grid has been awarded preferred bidder status by Ofgem to become an offshore transmission operator (OFTO).

Trade bodies RenewableUK. RenewableUK, formerly the British Wind Energy Association, is the primary trade body for the offshore wind industry. Its membership extends to companies involved in wave and tidal energy and onshore wind but its activities do not currently include other forms of renewable energy generation. Key activities include national conferences, political lobbying, and policy development on issues such as skills, and health and safety.

Renewable Energy Association. REA is a more broadly based trade association than RenewableUK, with membership covering solar and biofuels as well as wind and wave and tidal. While there is some overlap with RenewableUK‟s membership, the REA is generally not seen to represent the UK offshore wind sector.

NOF Energy. NOF energy is a membership-based business development organisation. Its focus has traditionally been on oil and gas but it has recognised the synergies that could be achieved with offshore wind and has extended its activities accordingly. These include networking and events, international business support, industry intelligence and consultancy services.

16 Market structure

2.2. Offshore wind farm developers and owners

Siemens The scale of investment required in offshore wind Project Ventures, 68 means that many developers of UK projects are large companies with interests in a number of Masdar, European countries. They fall into three categories: 126 Centrica Energy, 135 DONG  Large energy companies such as Centrica, Energy, 520 SSE, RWE and Statoil Vattenfall, 150  Financial backers, such as Masdar, Siemens Project Ventures and Stadtwerke München, and Statoil, 158 SSE  Independent developers, such as Warwick Renewables, 298 Energy and Mainstream Renewable Power. Statkraft, 158 Most projects are likely to change hands at least partially either before or after construction. In RWE npower renewables, many cases the new owners have existing offshore 252 E.ON Climate wind assets and their acquisitions enable them to & broaden their portfolio of assets. Renewables, 189

Developer share of operating projects and those Figure 13 Developer share of UK offshore wind under construction or in development are shown in farms under construction (MW). the figures below. As of March 2011, about 45GW is in development, 1.7GW under construction and 1.3GW operating.

E.ON Climate & Renewables, 1310 SeaEnergy Renewables, Other, 3201 1460 SSE Renewables, Fluor, 1700 5628 Other, 107 DONG Energy, 1994 Centrica RWE npower Energy, 142 Vattenfall, renewables, 390 Siemens 5548 Project Ventures, 2058 RWE npower Statoil, 2250 Centrica renewables, Energy, 5340 150

Statkraft, 2250 Scottish E.ON Climate Power & DONG Renewables, Renewables, Energy, 308 Mainstream Vattenfall, 5267 244 Renewable 3737 Power, 2360

Figure 14 Developer share of UK offshore wind Figure 12 Developer share of UK operating offshore farms in planning (MW). wind farms (MW).

Market structure 17

2.3. Offshore transmission owners

In order to comply with European legislation, the UK has introduced a system that separates the ownership of the generating assets from the ownership of the offshore grid connection. Offshore wind farms that do not have an offshore substation are excluded from the process.

Only companies identified through a tendering process run by Ofgem in 2010 are qualified to act as OFTOs. These are:

 Balfour Beatty Capital

 DONG Energy Sales and Distribution (subsequently withdrew)

 Green Energy Transmission (a consortium of Equitix and AMP Capital Investors)

 Macquarie Capital Group (a consortium including Macquarie Capital Group, Barclays Private Equity and NIBC Infrastructure Partners)

 National Grid Offshore, and

 Transmission Capital Partners (a consortium of Transmission Capital International Public Partnerships and Amber Infrastructure Group).

The tendering process for maintaining each connection to offshore wind farms that are operating or under construction is currently underway. The first contract was awarded in early 2011 to Transmission Capital Partners for the Robin Rigg wind farm.

It is anticipated that further awards for Gunfleet Sands, Sheringham Shoal, Thanet, Walney and Ormonde will be made during 2011 while the tender for the Greater Gabbard project is to be re- run. The tendering processes for the London Array and Lincs projects, which began offshore construction in 2011, have not started.

An OFTO is paid a fixed fee based on its bid for the transmission line by National Grid, which recovers the cost through transmission charges paid by the generator.

18 Market structure

2.4. Supply chain 1,400

1,200 This section outlines the supply of key components and services to UK projects between 2003 and 1,000

2011. Construction of a wind farm usually runs over 800 several years and generation by some turbines often begins before a wind farm is completed. Here, 600 projects have been assigned to calendar years as (MW) capacity installed 400 presented in data published by the European Wind ix Annual Energy Association. 200

Data has been included for the Walney 1, Ormonde, 0 Sheringham Shoal and Greater Gabbard projects on 03 04 05 06 07 08 09 10 11 the assumption that they will be completed by the REpower Siemens Vestas end of 2011. Figure 15 Suppliers of wind turbines to the UK Wind turbines offshore wind market from 2003 to 2011. The UK offshore wind turbine market to date has Turbine foundations been dominated by Vestas and Siemens who have supplied all completed projects apart from two With the exception of the Beatrice demonstrator turbines by REpower on the Beatrice demonstrator project and the Ormonde wind farm currently in project and the Ormonde wind farm which is construction, all completed UK projects have used currently under construction. See Figure 15 for a monopile foundations and the large majority of breakdown of turbine supply to the UK market by these have been supplied by the Belgian joint company since 2003. The dominance of Siemens venture between SIF and Smulders. and Vestas is unlikely to change significantly in the short term as they are already earmarked or The Scottish-based companies Cambrian contracted for many of the projects planned up to Engineering and Isleburn jointly delivered the the start of Round 3. foundations for Scroby Sands in 2003 but have not delivered any since. More recently, a consortium of This lack of competition in the market has been a Erndtebrücker Eisenwerk (EEW) and Bladt challenge for the industry but REpower are Industries were contracted to build the foundations expected to gradually increase their market share for the Walney 1 project and they also won the and Areva and Bard are now establishing a track contract for the 175 foundations for the first phase record on the Continent. of London Array. The monopiles for the Greater Gabbard wind farm were produced by Chinese Looking beyond 2015, about 30 companies are manufacturer Shanghai Zhenhua Heavy Industry known to have offshore turbine designs at various (formerly ZPMC). stages of development with the majority targeting the European market. The fact that future offshore In the UK, north east-based company Tees Alliance projects are unlikely to be smaller than 300MW, Group (TAG) has invested approximately £20 however, will limit the ability of players to capture million in a production facility which is expected to small market shares and this means that the start operations in 2011 and other players have European offshore wind industry is unlikely to signalled intent to enter the market. support more than ten wind turbine suppliers.

Market structure 19

The Beatrice demonstrator project used jacket suit offshore wind. In future, it is expected that foundations that were manufactured by Burntisland turbine installation will largely be undertaken by Fabrications (BiFab) which has also supplied the specialist wind farm installation vessels. There are jacket foundations used on the Ormonde and about 15 installation vessels currently in German Alpha Ventus projects. See Figure 16 for a construction. In a number of cases, these have breakdown of foundation supply to the UK market been commissioned by new players to the by company since 2003. installation market, for example, Master Marine, Beluga Hochtief and Swire Blue Ocean. 1,400

1400 1,200

1200 1,000

1000 800

800 600

installed capacity (MW) capacity installed 600

400 installed capacity (MW) capacity installed

Annual 400

200 Annual 200 0 03 04 05 06 07 08 09 10 11 0 BiFab Camcal/Isleburn Erndtebrücker Eisenwerk/Bladt SIF/Smulders 03 04 05 06 07 08 09 10 11 Shanghai Zhenhua Heavy Industry A2SEA Gulf Marine KS Energy MPI Offshore Seacore Seajacks Scaldis SMIT Figure 16 Suppliers of turbine foundations to the UK offshore wind market from 2003 to 2011. Figure 17 Installers of turbines in the UK offshore wind market from 2003 to 2011. Turbine installation The leading turbine installation companies to date Foundation installation have been A2SEA and MPI Offshore. While a Many of the issues seen in the turbine installation number of other companies have been active, few market also apply to the foundation installation have built up an extensive track record. market. A further complication is that foundation installation may require more than one vessel and Deriving market shares is problematic since in often from different suppliers. In Figure 18, we many projects, more than one supplier has been consider the main installation vessel used. used. This has been done to accelerate installation or because project schedules have slipped and A2SEA and MPI Offshore have had a significant vessels have needed to be mobilised for other share of the market. They are joined by several projects. In Figure 17, the challenge of establishing operators of heavy lift vessels, notably Ballast the contribution of different suppliers in delivering a Nedam, and its heavy lift crane Svanen, and given project has been addressed by dividing the Scaldis, and their sheer leg crane Rambiz. Such installed capacity equally between those players vessels have also been used for offshore substation active on the project. installation.

There are also differences in the way vessels are contracted. The vessel operator may be contracted directly by the wind farm developer or via a third party. Figure 17 shows the share of the charter market rather than the share of installation contracts. For 2011, we assume that the vessels earmarked for use will complete each project.

Many of the vessels have been used in other sectors such as oil and gas and been modified to

20 Market structure

1400 The issue of cable supply is of equal concern for projects requiring HVDC cable. HVDC cable suffers 1200 lower transmission losses and projects more than 1000 approximately 80km from shore are likely to use

800 DC systems. HVDC cables will not be required for UK projects before 2015 but investment will need 600 to be in the near term due to the long lead times

installed capacity (MW) capacity installed 400 for the testing and certification for new cable products and manufacturing lines.

Annual 200

0 Early wind farms that do not have substations have 03 04 05 06 07 08 09 10 11 a medium voltage grid connection. The market A2SEA Ballast Nedam shares shown in Figure 19 only include projects MPI Offshore Scaldis using high voltage export cable. Seaway Heavy Lifting SMIT

1,400 Figure 18 Installers of foundations in the UK offshore wind market from 2003 to 2011. 1,200

1,000 Subsea export cable

Apart from a few early projects that were close to (MW) capacity 800 shore, most UK offshore wind farm projects have 600 incorporated offshore substations. The primary installed function of the offshore substation is to step up the 400 medium voltage of electricity generated by the Annual 200 turbines (typically 33kV) to high voltage (typically 132kV) in order to minimise transmission losses. 0 The substation also includes protective switches 03 04 05 06 07 08 09 10 11 (circuit breakers) to allow faults in array cables Nexans Prysmian from the turbines to be isolated. There is a trend towards fitting two or more transformers and Figure 19 Suppliers of export cable to the UK related switchgear which allows the wind farm to offshore wind market from 2003 to 2011. continue to operate, albeit at reduced capacity, in the event of a fault in one of the two independent Subsea array cables export cables from the offshore to onshore substation. All projects in the UK to date have used There are more manufacturers producing 32kV AC transmission systems. DC transmission systems array cables used to collect power from the turbines for wind farm export will be employed when the than export cable. So far, seven companies have distance to the onshore connection point exceeds supplied UK projects and, while AEI Cables no about 100 kilometres. longer manufactures 32kV subsea cable, there are a number of potential new entrants to the UK The availability of high voltage AC export cable is a market, including LS Cable and General significant concern for the industry because of the Cable/NSW. restricted number of companies able to supply the market. Currently only Prysmian and Nexans have a track record in supplying high voltage export cable to UK projects. ABB has supplied projects elsewhere in Europe and nkt cables and General Cable have recently entered the high voltage subsea cable market. The UK-based supplier JDR Cables Systems is also establishing capability to enter the high voltage subsea cable market.

Market structure 21

1,400 1,400

1,200 1,200

1,000 1,000

800 800

600 600

installed capacity (MW) capacity installed installed capacity (MW) capacity installed 400

400

Annual Annual 200 200

0 0 03 04 05 06 07 08 09 10 11 03 04 05 06 07 08 09 10 11 ABB AEI Cables JDR Cable Nexans NKT Parker Scanrope MPI Offshore Oceanteam Subocean Visser & Smit Prysmian

Figure 20 Suppliers of array cable to the UK offshore Figure 21 Installers of export cable in the UK wind market from 2003 to 2011. offshore wind market from 2003 to 2011.

Subsea cable installation Array cable. Array cable installation has proved technically demanding with the need to move Cable installation has been a problematic area for vessels close to the turbine foundations and pull the the offshore wind industry. It has been the biggest cable through the J-tubes. Again, barges have been source of insurance claims to date and few projects used but there is an increasing use of smaller DP2 have been completed without the need for repairs. vessels. There have also been concerns on the part Of the companies supplying the UK market, CNS of cable installers that foundation design has not Subsea, Oceanteam, Submarine Cable and Pipe adequately recognised the challenges of cable- and, most recently, Subocean have all had financial installation. difficulties and have either withdrawn from the market or been acquired by larger players. The risks and difficulties associated with cable- laying may be a cause for the large number of Export cables. Export cable installation has typically players in the array cable installation market shown been undertaken by shallow draft barges that are in Figure 22. Only Subocean has had a sustained manoeuvred by tugs and which can beach in presence in the market but it went into shallow water between tides. These vessels will not administration in early 2011 and has been acquired be suitable for projects further offshore and it is by Technip. anticipated that, from 2015, most export cables will be laid by DP2 vessels with carousels capable of handling up to 100km of cable.

There are very few of these vessels globally and they been employed primarily for the power interconnector market. Investment in new-build or modified vessels will be needed but there are encouraging signs that demand will be met. Significant new entrants to the market are likely to include Beluga and P&O Maritime Services in partnership with Offshore Marine Management.

22 Market structure

1,400 1,400

1,200 1,200

1,000 1,000

800 800

600

600 installed capacity (MW) capacity installed

400 (MW) capacity installed 400

Annual 200 Annual 200 0 03 04 05 06 07 08 09 10 11 0 CNS Subsea CTC Marine CT Offshore Global Marine Systems 03 04 05 06 07 08 09 10 11 MPI Offshore Submarine Cable & Pipe ABB Alstom/Areva Siemens Subocean Visser & Smit

Figure 22 Installers of array cable to the UK Figure 23 Suppliers of substation electrical systems offshore wind market from 2003 to 2011. to the UK offshore wind market from 2003 to 2011.

Offshore substations

To date, most UK projects have only required a single substation but it is anticipated that future projects will use multiple substations if the expected energy output is more than approximately 500MW.

Only ABB, Alstom (which acquired Areva Transmission and Distribution in 2010) and Siemens Transmission and Distribution have the capability to supply high voltage transformers, reactors and switchgear, although there are other companies that can supply individual components.

For most UK projects, developers have sought to tender a single topside substation contract and this has typically been awarded to one of the electrical suppliers listed above, who then subcontract the fabrication of the offshore topside.

An alternative strategy is to contract the fabricator, who subcontracts the electrical supply. As an example, this strategy was adopted for Gunfleet Sands where Bladt procured ABB electrical components. The market share shown in Figure 23 shows the share of substation electrical supply.

Market structure 23

2.5. Industry alliances and compared with contracting on a project-by-project basis. consolidation There have been two significant offshore wind As the size of UK and Continental offshore wind turbine supply framework contracts announced to projects has grown, there has been an increasing date. number of industrial alliances within the supply In 2009, RWE and REpower signed an agreement chain. worth €2 billion for the supply of 250 turbines. The Such alliances allow for greater access to funding majority of these turbines will be used on the and promote the pooling of experience. German Innogy Nordsee I project and the Belgian Thornton Bank II and III projects. Developer consortia Round 3 gave companies the opportunity to bid for Also in 2009, DONG and Siemens signed a similar the rights to develop wind farms in zones that were agreement for the supply of 575 offshore turbines, far larger than anything that had been offered many of which are being deployed in UK projects before. One result of this increase in scale was the including Lincs, Walney I and II and London Array. formation of developer consortia for most of the While Mitsubishi has yet to bring an offshore wind larger zones. turbine to the market, in 2010 SSE signed a In some cases, including Dogger Bank (Statoil, strategic agreement with them to cooperate on Statkraft, RWE and SSE) and Norfolk Bank their renewable energy development. (Vattenfall and Scottish Power), these consortia are composed of utility-developers who have chosen to Innovation-focused cooperation pool their financial and organisation resources as As well as the alliances that have been established well as technical knowledge and offshore wind independently by companies, a number of part- government funded think-tanks have sought to experience. bring together companies with the aim of advancing In other cases such as the Moray Firth (EDP technology and reducing costs. Renováveis and SeaEnergy Renewables), the Irish Sea (Centrica and RES) and the Firth of Forth (SSE The Carbon Trust‟s Offshore Wind Accelerator and Fluor) a utility-generator has teamed up with programme is co-funded by eight developers of UK an EPC (engineer, procure and construct) projects: Statoil, DONG Energy, SSE, Statkraft, contractor or a engineering consultancy who can Scottish Power, E.ON UK, RWE npower renewables either project manage the development or advise and Mainstream. The programme has a budget of more than £9 million to support the development of during the process. innovative solutions in foundation, access, A final consortium option was devised for the transmission and yield calculation technology, Hornsea zone in which the independent developer, focussing delivering on a short-to-medium term Mainstream Renewable Power, formed a joint impact. venture with the project venture division from Siemens. In this case, agreements are made with ETI is a public/private organisation funded by BP, strategic partners to supply components and Caterpillar, EDF Energy, E.ON UK, Rolls-Royce, Shell and the UK Government. To date, it has services and generate funding. supported the development of novel offshore wind Turbine framework agreements systems including a vertical axis turbine, a floating Where a developer has a sizable pipeline of offshore turbine/foundation concept and an advanced wind projects, it may be preferable for it to arrange condition monitoring system to improve reliability framework contracts with supply chain companies. and operational costs. Such agreements can offer long term commitment in return for improved prices, increased certainty of Acquisitions and alliances supply and deeper sharing of technical information A number of turbine manufacturers have entered into strategic partnerships with specialist companies for the development of their blades.

24 Market structure

REpower entered into a joint venture in 2007 with In 2009, Danish developer DONG Energy acquired blade manufacturer SGL Rotec to set up a turbine and foundation installation vessel owner production business called PowerBlades, capable of A2SEA in a move to secure its own project pipeline producing blades for its 6M turbine. by ensuring vessel availability. This acquisition was followed a year later by the news that Siemens had In 2011, Alstom, while developing a 6MW turbine agreed to become a minority shareholder in A2SEA. that will be optimised for the UK North sea market, announced a strategic partnership with LM Wind More recently, DONG Energy has also become a 30 Power to develop what they describe as the world‟s per cent minority shareholder in cable installation longest wind turbine blade ever produced. and maintenance specialists CT Offshore.

As an alternative to a partnership, in 2009 Areva acquired the German manufacturer of blades, PN Rotor, in order to meet demand for its offshore turbine.

In terms of towers, in 2011 SSE and Marsh Wind Technology announced that they had formed a joint venture call Wind Towers that is set to complete the acquisition of a tower production facility in Campbeltown on the west coast of Scotland. This facility, which had belonged to Vestas before it was sold to Skykon (since in administration), currently produces towers for onshore turbines but has benefited from recent investment that will enable it to make offshore towers as well.

SSE has also agreed a long term framework contract with jacket foundation manufacturer BiFab to buy at least 50 units a year for up to 12 years from 2014. This followed SSE‟s purchase of a 15 per cent stake in BiFab.

In a potentially wider framework agreement that would cover a range of offshore wind activity, SSE also announced a memorandum of understanding in 2011 that included BiFab plus the turbine and transmission and distribution divisions of Siemens, engineering and vessel supplier Subsea 7 and consultancy Atkins with the aim of delivering cost improvements. It is expected that the arrangement will be formalised later this year.

The restricted supply of turbine installation vessels has been considered a constraint in the past and this has triggered a number of alliances and acquisitions.

Heavy lift vessel specialist Beluga and construction giant Hochtief entered into a joint venture to order a next-generation jack-up vessel capable of installation up to 80 turbines a year in water depths of 50m.

Market structure 25

2.6. Projects and supply chain Unlike sources of conventional generation, offshore wind farms have no primary fuel costs but do have structure ongoing operational costs (OPEX). These are currently estimated to be approximately £100,000 Background a year per MW. Currently, the capital cost (CAPEX) of developing The complexity of an offshore wind farm means and installing a UK offshore wind farm project is these costs are spread over a wide supply chain estimated to be approximately £3 million per MW. and a range of skills and technologies. The As Figure 24 shows, the expenditure for developer of the offshore wind farm will typically development and consenting accounts for always undertake most of the planning and funding approximately four per cent of the total cost. The activities but the way in which contracts for other procurement of the turbine and the balance of plant activities are arranged can vary and has evolved accounts for more than 70 per cent of the total cost over the last 10 years. while the installation of the project accounts for almost 25 per cent.

Over the next decade, factors such as increasing turbine size and projects moving into deeper water sites further offshore will force CAPEX costs up. On the other hand, cost savings will be found through greater efficiency and technology advances which will act to improve CAPEX costs.

By 2020, not including the impact of inflation, we expect CAPEX costs to remain similar to current levels. Looking in more detail, however, we expect to see turbine costs per MW increase in proportion as larger designs are used. On the other hand, installation costs will reduce. This is because the additional expense of handling larger foundations and turbines is compensated by the fact that fewer units need to be installed per MW which reduces the number of vessel moves and installation operations required.

Development/consenting Turbine Balance of plant Installation

Figure 24 Breakdown of CAPEX costs for UK offshore wind farms in 2010.

26 Market structure

Turn-key model cases, specialist EPC contractors such as Fluor and KBR have been used. The EPC model minimises risk A number of UK offshore wind farms built to date for the wind farm developer and, in the early days, were developed using the turn-key contracting was a way for wind turbine manufacturers to enable approach. A simplified example of this type of projects to be constructed. As competence in the structure is shown in Figure 25. supply chain increases, we anticipate at least a partial return to the single EPC construct model. This approach means that a project developer would hire an EPC (engineer, procure and construct) In terms of the long term operation and maintenance contractor to handle most aspects of the project of the offshore wind farm, all UK projects to date including the procurement of the turbines and the have been operated initially by the turbine balance of plant and coordinating installation manufacturer under a warranty arrangement that activities. The EPC contractor will also take on the generally lasts around five years. Once this period is risk of installation delays or issues. over, the developer can extend the contract with the turbine manufacturer, take on the activities itself or For early projects, it was common for the turbine arrange for a third party to do so. manufacturer to act as the EPC contractor. In other

Developer

Project management Construction management

Foundations Development Turbine design Turbine Electrical design, Cable design, Wind farm O&M studies and manufacture installation manufacture, manufacture manufacture,

Turbine O&M installation installation installation

Figure 25 EPC supply chain structure.

Market structure 27

Multi-contract model contracts to be bundled into EPC works for identified areas of the offshore wind farm with the developer For more recent projects, the EPC model has been project managing the integration of these elements. used less frequently in favour of a multi-contract strategy in which the developer acts as the project Another model has been adopted by the developers manager and agrees separate contracts with of the Round 3 Hornsea zone, Mainstream Renewable component and service suppliers. Power. As the only non-utility Round 3 developer, they operate a model in which a development fund is This strategy allows developers to assume more of created through partnering with key supply chain the risk of a project and reduce costs at the expense players. Costs are shared among the partners in of increased internal contracting complexity. exchange for supply contracts. Once a project within Contracts can be packaged and sub-contracted in a the zone is consented, Mainstream will be in a range of ways but a typical structure is shown in position to sell it as a complete package with all the Figure 26. The preferred model is for some of these major suppliers already in place.

Developer

Project management Construction management

Foundations Development Turbine design Turbine Electrical design, Cable design, Wind farm O&M studies and manufacture installation manufacture, manufacture manufacture,

Turbine O&M installation installation installation

Figure 26 Multi-contract supply chain structure.

28 Market structure

2.7. Project details

The following list compiles the key details, where available, of all UK offshore wind projects built, in construction or planned.

Table 1 Abbreviations used.

UK Round Demo Demonstration project Project Status Dev In development Constr In construction Developers SSE Scottish and Southern Energy Renewables RWE RWE npower renewables EON E.ON Climate and Renewables AMEC AMEC Border Wind Shell Shell Wind Energy Dong DONG Energy SPR Scottish Power Renewables Supply chain Siemens Siemens Wind Power Siemens T&D Siemens Transmission and Distribution BiFab Burntisland Fabrication ABB The ABB Group Prysmian Prysmian Cables & Systems

Market structure 29

Figure 27 UK offshore wind farm development sites (The Crown Estate, supplied April 2011).

30 Market structure

Table 2 UK project description.

Gunfleet Kentish Project Name Beatrice Blyth Barrow Burbo Bank Sands 1 Flats 1 North Sea, North Sea, Irish Sea, Irish Sea, N North Sea, North Sea, Location NE Scotland NE England NW England Wales SE England SE England Capacity (MW) 10 4 90 90 108 90 Turbines 2 2 30 25 30 30 Foundation Jacket Monopile Monopile Monopile Monopile Monopile UK Round Demo Demo 1 1 1 1 Status Operating Operating Operating Operating Operating Operating AMEC Talisman Nuon Centrica Developer Dong Dong Vattenfall SSE E.ON Dong Shell Turbine REpower Vestas Vestas Siemens Siemens Vestas supplier Foundation SIF & SIF & SIF & SIF & BiFab AMEC supplier Smulders Smulders Smulders Smulders Turbine AMEC Scaldis MPI Offshore A2SEA A2SEA A2SEA installation Seacore Foundation AMEC Ballast Scaldis MPI Offshore A2SEA MPI Offshore installation Seacore Nedam Substation N/A N/A Alstom N/A ABB N/A Subsea cable JDR Cable AEI Cables Nexans AEI Cables A = array ABB (A) Prysmian (A) Systems (A) (A) (A&E) (A) E = export

Cable Visser & Submarine Installation Global Global MPI Offshore Smit (E) Global Cable and A = array Marine (A) Marine (A) (A&E) CT Offshore Marine (A) Pipe (A) E = export (A)

Market structure 31

Lynn & Inner Scroby Project Name North Hoyle Rhyl Flats Robin Rigg Ormonde Dowsing Sands North Sea, E Irish Sea, N Irish Sea, N Irish Sea, North Sea, E Irish Sea, Location England Wales Wales NW England England NW England Capacity (MW) 194.4 60 90 180 60 150 Turbines 27 30 25 60 30 30 Foundation Monopile Monopile Monopile Monopile Monopile Jacket UK Round 1 1 1 1 1 1 Status Operating Operating Operating Operating Operating Constr

Centrica Developer RWE RWE EON EON Vattenfall TCW Group

Turbine Siemens Vestas Siemens Vestas Vestas REpower supplier Foundation SIF & SIF & SIF & SIF & Cambrian BiFab supplier Smulders Smulders Smulders Smulders Isleburn Turbine SMIT Seacore MPI Offshore MPI Offshore A2SEA A2SEA installation KS Energy A2SEA Foundation Ballast MPI Offshore MPI Offshore MPI Offshore A2SEA Scaldis installation Nedam Substation N/A N/A N/A Alstom N/A Alstom Subsea cable Prysmian (E) AEI Cables Parker Parker Prysmian A = array Nexans (A) Parker (A) Scanrope (A) Scanrope (A) (A&E) E = export Scanrope (A)

Cable Subocean Installation Subocean MPI Offshore Subocean (E) CNS Subsea Visser & A = array (A) (A) (A) CTC Marine (A) Smit (A&E) E = export (A)

32 Market structure

Gunfleet Greater Project Name Thanet 1 Teesside Gwynt y Môr Sands 2 Gabbard North Sea, North Sea, North Sea, North Sea, Irish Sea, N Location SE England NE England SE England SE England Wales Capacity (MW) 300 62 64.8 504 576 Turbines 100 27 18 140 160 Foundation Monopile Monopile Monopile Monopile Monopile UK Round 1 1 2 2 2

Status Constr Consented Operating Constr Constr

SSE Developer Vattenfall EDF Dong RWE RWE

Turbine Vestas Siemens Siemens Siemens Siemens supplier Shanghai Foundation SIF & SIF & Zhenhua EEW supplier Smulders Smulders Heavy Bladt Industry Turbine A2SEA MPI Offshore SNC Lavalin A2SEA installation Seajacks Foundation A2SEA Ballast Seaway installation MPI Offshore Nedam Heavy Lifting Siemens Siemens Substation N/A ABB Siemens T&D T&D T&D Subsea cable Prysmian (E) Prysmian Prysmian NKT (E) A = array JDR Cable (A&E) (A&E) Draka (A) E = export Systems (A) Cable Oceanteam Installation Subocean (E) Subocean Global A = array (A&E) CT Offshore (A&E) Marine (A&E) E = export (A)

Market structure 33

Sheringham London Dudgeon Project Name Walney 1 Walney 2 Lincs Shoal Array 1 East North Sea, E Irish Sea, Irish Sea, North Sea, E North Sea, North Sea, E Location England NW England NW England England SE England England Capacity (MW) 317 183.6 183.6 270 630 560 Turbines 88 51 51 75 175 168 Foundation Monopile Monopile Monopile Monopile Monopile Monopile UK Round 2 2 2 2 2 2 Contracts Status Constr Constr Constr Constr Consented placed EON Statoil Warwick Developer Dong Dong Centrica Dong Statkraft Energy Masdar Turbine Siemens Siemens Siemens Siemens Siemens supplier

Foundation SIF & SIF & SIF & EEW/Bladt EEW/Bladt supplier Smulders Smulders Smulders

Turbine MPI Offshore Gulf Marine Seajacks Seajacks MPI Offshore installation A2SEA Ballast Foundation Nedam Ballast MPI Offshore Scaldis installation Seaway Nedam A2SEA Heavy Lifting Siemens Siemens Substation Alstom Bladt Bladt T&D T&D Subsea cable Nexans (E) Prysmian (E) Prysmian (E) A = array Nexans (A&E) Nexans (A&E) JDR Cable NKT (A) Draka (A) E = export Systems (A) Cable Installation Visser & Visser & DNK (A&E) A = array Smit (A&E) Smit (A&E) E = export

Humber London West Docking Project Name Race Bank Triton Knoll Gateway Array 2 Duddon Shoal North Sea, E North Sea, Irish Sea, North Sea, E North Sea, E North Sea, E Location England SE England NW England England England England Capacity (MW) 300 370 500 540 620 1200 Turbines 83 88

Foundation Monopile Monopile Monopile Monopile Monopile

UK Round 2 2 2 2 2 2 Status Consented Consented Consented Dev Dev Dev Developer EON EON SPR Centrica Centrica RWE

Westernmost Project Name Rough North Sea, Location NE England Capacity (MW) 240 UK Round 2 Status Dev Developer Dong

34 Market structure

Burbo Bank Galloper Kentish Flats Walney Project Name Extension Wind Farm 2 Extension Irish Sea, North Sea, North Sea, Location Irish Sea, N Wales SE England SE England NW England Capacity (MW) 234 504 51 750 UK Round R1/2 Ext R1/2 Ext R1/2 Ext R1/2 Ext Status Dev Dev Dev Dev SSE Developer Dong Vattenfall Dong RWE

Atlantic Project Name Dogger Bank Firth of Forth Hornsea Moray Firth Irish Sea Array Bristol North Sea, North Sea, E North Sea, North Sea, Irish Sea, Location Channel NE England Scotland NE England NE Scotland NW England SW England Capacity (MW) 1500 9000 3500 4000 1300 4200 UK Round 3 3 3 3 3 3 Status Dev Dev Dev Dev Dev Dev Forewind EDP (RWE, SSE, SSE Mainstream Developer RWE Renovaveis Centrica Statkraft and Fluor Siemens SeaEnergy Statoil)

West Isle of Project Name Norfolk Bank Rampion Wight English English North Sea, Location Channel, Channel, E England S England S England Capacity (MW) 7200 600 900 UK Round 3 3 3 Status Dev Dev Dev SPR Developer EON Eneco Vattenfall

Aberdeen Project Name Argyll Beatrice Forth Array Inch Cape Islay Harbour North Sea, West North Sea, North Sea, E North Sea, E West Location NE Scotland Scotland Sea NE Scotland Scotland Scotland Scotland Sea Capacity (MW) 50.4 1500 920 415 905 680 Scottish Scottish Scottish Scottish Scottish Scottish UK Round Territorial Territorial Territorial Territorial Territorial Territorial Waters Waters Waters Waters Waters Waters Site Site Site Site Site Site Status exclusivity exclusivity exclusivity exclusivity exclusivity exclusivity agreement agreement agreement agreement agreement agreement AREG/ Developer SPR SSE Fred Olsen SeaEnergy SSE Vattenfall

Market structure 35

Neart na Project Name Kintyre Solway Firth Wigtown Bay Gaoithe West North Sea, E Irish Sea, Irish Sea, Location Scotland Sea Scotland NW England SW Scotland Capacity (MW) 378 360 300 280 Scottish Scottish Scottish Scottish UK Round Territorial Territorial Territorial Territorial Waters Waters Waters Waters Site Site Site Site Status exclusivity exclusivity exclusivity exclusivity agreement agreement agreement agreement Developer SSE Mainstream EON Dong

36 Market structure

Endnotes The web addresses for the documents referenced below were checked shortly before publication.

i Department of Energy and Climate Change, EU 2020 Climate and Energy Package, http://www.decc.gov.uk/en/content/cms/what_we_do/change_energy/european/cepackage/cepackage.aspx [last accessed 15 March 2011]. ii Department of Energy and Climate Change, A low-carbon UK, (2009), http://www.decc.gov.uk/en/content/cms/what_we_do/lc_uk/lc_uk.aspx. iii The Carbon Trust, Offshore wind power: big challenge, big opportunity, (2008), http://www.carbontrust.co.uk/publications/pages/publicationdetail.aspx?id=CTC743. iv The Crown Estate, Towards Round 3: Progress in building the offshore wind supply chain, (2011), http://www.thecrownestate.co.uk/supply_chain_gap_analysis_2010.pdf. v Department of Energy and Climate Change, Consultation on Electricity Market Reform, (2010), www.decc.gov.uk/en/content/cms/consultations/emr/emr.aspx. vi Department of Energy and Climate Change, The Renewable Energy Strategy, (2009), http://www.decc.gov.uk/en/content/cms/what_we_do/uk_supply/energy_mix/renewable/res/res.aspx. vii Department of Energy and Climate Change, The UK National Renewable Energy Action Plan, (2010), http://www.decc.gov.uk/en/content/cms/what_we_do/uk_supply/energy_mix/renewable/ored/uk_action_plan/uk _action_plan.aspx. viii National Grid, Offshore Development Information Statement, (2010), www.nationalgrid.com/uk/Electricity/ODIS/CurrentStatement/. ix European Wind Energy Association, Operational offshore wind farms in Europe, end 2010, (2010) http://www.ewea.org/fileadmin/ewea_documents/documents/statistics/110214__public_offshore_wind_farms_in_ Europe_2010.pdf.

Endnotes 37

BVG Associates is a technical consultancy with expertise in wind and marine energy technologies. The team probably has the best independent knowledge of the supply chain and market for wind turbines in the UK. BVG Associates has over 120 man years experience in the wind industry, many of these being “hands on” with wind turbine manufacturers, leading RD&D, purchasing and production departments. BVG Associates has consistently delivered to customers in many areas of the wind energy sector, including:

 Market leaders and new entrants in wind turbine supply and UK and EU wind farm development

 Market leaders and new entrants in wind farm component design and supply

 New and established players within the wind industry of all sizes, in the UK and on most continents, and

 Department of Energy and Climate Change (DECC), RenewableUK, The Crown Estate, the Energy Technologies Institute, the Carbon Trust, Scottish Enterprise and other similar enabling bodies.

For more information, please visit our website at www.bvgassociates.co.uk.

The views expressed in this report are those of BVG Associates.

Authors:

Christopher Willow has worked in the offshore wind industry for more than three years and offers a comprehensive knowledge of both the UK‟s offshore wind supply chain and port industry. Recent work he has led includes a report investigating the long term costs and economic benefits of offshore wind in the UK and a project modelling the logistical benefits of clustered and distributed supply chains.

Bruce Valpy is the director of BVG Associates. Before founding the company in 2005, Bruce led wind turbine design activities in the UK for NEG Micon (now Vestas). Since then he has created a rapidly growing, diverse client base including the market leaders in the wind turbine and tidal turbine sectors, RenewableUK, The Crown Estate, the UK Government (DECC), utility providers and multi-nationals.

Julian Brown has 27 years experience in engineering businesses and more than nine years experience in the wind industry. He has provided consultancy to wind turbine manufacturers, developers, the UK Government and supply chain entrants. As Managing Director of NEG Micon Rotors (now Vestas), Julian led the establishment of blades technology and manufacturing at their UK Isle of Wight facility.

38

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