The target for the Government is 18GW from offshore wind by 2020 to meet the 15 percent renewable power obligation and aims to cut the cost of wind power to £100 per megawatt hour. Developers have registered their interest in 46GW. The investment required for 18GW is estimated at £50 billion and investors are looking at the preferred countries for investment.
One of the requirements to achieve the Government targets is the attraction of investors. According to the Ernst & Young report on Country Attractiveness Indices for Renewable Energy, the UK rates highest along with Germany for offshore wind. But this industry still has to be seen to be profitable for investors and this will require additional funding which is provided by Renewable Obligation Certificates, for which the banding is currently under review. Despite this, several turbine manufacturers are well down the route of establishing manufacturing facilities in the UK including Siemens (Hull), Mitsubishi (tba), Gamesa (Leith), Vestas (Sheerness), Samsung (Fife) and others.
One of the major issues is the cost of the electricity produced which is currently higher than the cost of electricity from other types of power generation. Much of the focus of the Government and The Crown Estate is on how costs can be reduced. Another concern is the connectivity to the UK’s National Grid.
For those interested in supplying products for the manufacture of the foundations, towers and nacelles, this means a commitment to providing their products at highly competitive prices and a commitment to continuous efforts to reduce costs further. It was stated that costs have reduced by 40 percent over the last 10 years but this cost reduction needs to be accelerated. For the volumes required, companies need to be looking at establishing production lines for manufacturing the components required. Cost reduction is achieved by using larger turbines and by producing higher volumes according to The Crown Estate. The issue is being investigated by the Offshore Wind Cost Reduction Task Force set up as part of the Governments Renewable Energy Roadmap. Details are on the DECC website.
One such example of the production line concept is the plan for OGN to produce wind turbine foundations (jackets) at their Hadrian yard in Newcastle. They have produced two designs – Triton with three legs and Atlas with 4 legs. The huge building when constructed will contain areas for assembly, robotic welding, and blasting/painting in a production line. The plan is to manufacture 3 jackets a week each weighing 600-900 tonnes. The facility will also be able to produce other designs of jacket and also transformer platforms which can weigh up to 10,000 tonnes. OGN are investing £50
In 2010, the Government made available £60 million for port infrastructure development which so far remains unspent. In addition funding through the Regional Development Fund Round 1 went to David Brown, OGN, OSBIT and NGenTec for offshore wind projects and there is further funding of £5 million available in Round 2. Round 3 will provide £1 billion, some of which could be for renewable energy projects. Funding through the TSB Catapults has included £50 million for the Offshore Renewable Energy Catapult including Narec and Glasgow bases including offshore wind developments. The Advanced Manufacturing Supply Chain Initiative (AMSCI) managed by the TSB will provide £100 million in two tracts, the first of £69 million closing on 13th June 2012.
million in the yard which will be in operation in 2014.
The target is to reach a UK content of 50 percent from the current level of 32 percent. The foundations represent around 20 percent of the Capex and the turbine about 40 percent.
As with other sectors, there is a shortage of skilled personnel in design, technology, engineering, project management – the Crown Estate website has a downloadable document detailing career opportunities.
Further information about offshore wind can be obtained free of charge from the websites of DECC, The Crown Estate and Ernst and Young.
Tel: +44(0)1709 724990 www.namtec.co.uk
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