By Molly Isaacs, Energy Economy Analyst at ORE Catapult
All-Energy 2023, an annual gathering for the renewable and low carbon energy industries, recently returned to Glasgow. Molly Isaacs from our Analysis and Insights Team reports back on her key takeaways from the event.
Offshore wind has expanded rapidly over the last decade, and that was clear to see in the buzz of exhibitors representing the sector on the show floor, reflecting the current momentum and opportunity on offer. There is no doubt offshore wind will play a vital role in a net zero energy system, in tandem with energy efficiency and storage solutions – which represent the next highest number of exhibitors. All-Energy included a list of familiar hot topics – streamlining the consenting process, skills, and workforce, unlocking grid capacity, energy markets, and floating offshore wind. Key themes cropping up across panel sessions also included supply chain, project timelines, standardisation, and collaboration. I’d like to look at these in more detail.
Over at the main stage Supply Chain panel, there was recognition that uncertainty around the UK’s industrial strategy is a barrier to external investment in manufacturing for offshore wind (OSW). Equally, investment timing is key, and its pace, currently driven by the UK Government’s Contracts for Difference (CfD) scheme followed by final investment decision (FID), is not optimal.
Off the back of this, the Scottish Offshore Wind Energy Council (SOWEC) announced the launch of the Strategic Investment Model (SIM) application window. Initial stages of SIM brought ScotWind developers together to form a Collaborative Framework Working Group to identify major infrastructure investment areas. SIM aims to connect supply chain players and developers at an early stage for discussions ahead of FID, enabling supply chain preparations to begin in time for ScotWind delivery, as well as increasing clarity for developers.
Elsewhere there were extensive discussions focused on balancing the aims of investing in local supply chains and pushing down the Levelised Cost of Energy (LCOE) and asking if we can have both. Finally, innovation in modular design was highlighted as an important opportunity for the UK supply chain – to simplify manufacturing and assembly challenges, utilise standard facilities and infrastructure, and create further opportunities in site flexibility. As sustainability is at the root of what we do, modular design may also open more business opportunities in refurbish and repair and build circular economy principles into the OSW ecosystem.
Inextricably linked to the supply chain challenge, project timelines received a lot of focus. Participants stressed the need for pipeline steadiness going forward, as opposed to sheer speed. One panellist went so far as to say that ScotWind projects should ideally be aiming for commissioning over 10 years rather than e.g. five, as sustainability of supply requires more linear demand. A sharp peak in installations without subsequent orders risks ports and other infrastructure becoming stranded assets.
Other observations:
It was clear from various panel sessions that a transparent timeline of projects supports infrastructure investment, strategic planning and collaboration, both within the UK and globally.
The plea is growing louder for standardisation of components, and turbines. Scan the renewables news and we see much discussion of the plateau point for turbine size, and when we should transition from ‘bigger is better’ to standardisation and industrialisation. There is a strong call from OEMs for this. Insurers have said they don’t want bigger turbines, but more reliable ones. Another angle in the debate, voiced in the Floating Offshore Wind (FOW) panel, was the challenge associated with the many design unknowns for FOW, and that it makes sense to fix the turbine rating while focusing on floating foundations. In short, participants felt that, there is no way to optimise everything else in the offshore wind ecosystem while the turbine size race is ongoing. Pausing it could herald the next revolutionary stage for the industry.
If keeping turbine sizes stable helps project financing, supply chain confidence and de-risks FOW, what should be the focus for next generation turbines? There are many opportunities for positive gains including optimisation or uprating of current technology, materials, innovation in maintenance and monitoring, increasing availability, and life extensions.
Elsewhere, the supply chain panel discussed the opportunity for equipment standardisation specifically in supply chain bottlenecks, such as cables and mooring lines. To counter this, standardisation may make things easier, but the question is does it make them workable across various site conditions.
In the discussion on streamlining the consenting process, there was the feeling of ‘data data everywhere but not a drop to drink’ – meaning that in some respects we have many years of data gathering and scientific research, but an uncertain overall picture of environmental impact. Cumulative effects were highlighted as a key area that is holding up consenting -clearly demonstrating the need for collaborative knowledge-sharing across developments, scientific groups and environmental bodies. Examples of progress include the Offshore Renewables Joint Industry Programme (ORJIP), ECOWind, and The Offshore Wind Evidence and Knowledge Hub. The SPARTA program is also a successful example of joint industry collaboration and data sharing in the operational phase of a development, that could be modelled on. Pooling and analysing operational data from multiple operators, SPARTA provides shared understanding in operational performance and trends over project lifespans.
Collaboration runs through every theme and topic of industry conferences. We need to collaborate more but there are less specifics on how to do this. Environmental conservation bodies are resource constrained, limiting collaboration in consenting. However, there was enthusiasm and engagement from new developers. SIM sets an example for structured collaboration between industry and Government and helps unlock infrastructure investment. Exciting opportunities exist for collaboration in construction and coordination between sites, for overcoming the unknowns in floating wind, and in creating a manufacturing ecosystem between ports of differing capabilities. Scotland and the UK is on the cusp of a huge shift in how we generate and use energy, and the challenges we face in this transition provide opportunities for collaboration, innovation, and billions of pounds for the economy.