D. Anticipated UK content for EA1 OffshoreWindfarm
EA1 has undertaken analysis of the likely UK content of the EA1 Project over the lifetime of the windfarm. The purpose was to understand what actions EA1 should take in achieving its target of 50% lifetime UK content.
EA1 has applied the principles of the UK contentmethodology currently under consideration by the OWPC and OWIC, in that it considers as far as possible the share of the expenditure captured by UK-based companies at each tier of the supply chain.
Two scenarios have been developed: the first, low scenario is that EA1 is passive in its procurement process; and
the second, high scenario, is where EA1 is active with its supply chain tomaximise the participation of UK companies.
In all the packages that EA1 intends to award, at least two suppliers are under currently consideration. In building each scenario, EA1 has developed a low and high scenario for each possible supplier. It further considered the probability of each supplier being successful in winning the contract and this probability was used to calculate a weighted average for each package. The results of this analysis are shown in the table below.
Package or activity EA1 costs pre-FID
EA1 internal costs from FID to works completion
Turbine supply (excluding project execution)
Turbine installation (including project execution)
Foundation design
Foundation and pile fabrication Foundation installation Array cable installation Array cable supply Grid transmission CAPEX
Turbine O&M Other O&M
Fixed OPEX: insurance, rent TNUoS OPEX
Lifetime total Lifetime
expenditure 3% 3%
16%
3% 0%
8% 4% 2% 1%
23% 63% 21% 3%
14% 37%
100% Low
(EA1 passive) 80%
80% 19%
16% 50%
25% 5%
14% 16% 13% 22% 65% 75% 79% 71% 40%
High
(EA1 active) 80%
90% 29%
26% 50%
53% 10% 28% 26% 29% 35% 75% 85% 85% 80% 52%
UK content in lifetime expenditure is 40% and 52% for the low and high scenarios respectively. Opportunities to increase the UK content in OPEX are primarily associated with the choice ofmajor componentmanufacturer and it is therefore in the CAPEX phase where procurement decisions to increase UK content need to bemade.
Under the low scenario, UK content in CAPEX is 22%, rising to 35% in the high scenario. EA1 understands that the average UK content in CAPEX for UK offshore windfarms built so far is about 20%. In EA1’s low scenario, there is significantly higher UK content in turbine supply, reflecting announced or expected UK investments by turbine
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