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3 Innovation 3.1 Overview


3.1.1 Innovation part of parent company ethos: Iberdrola is committed to innovation and was ranked as the 4th leading European utility to invest in R&D activities in 20121. Iberdrola will invest £372M(€450M2) during 2012-2014 in R&D in emerging and sustainable technologies. As detailed in the Iberdrola Innovation Report 2011-20133, Iberdrola’s R&D efforts are focused on seeking to optimise operating conditions, improving safety, reducing environmental impact and developing technologies to face the energy challenges of the future. This positive attitude to innovation is also present in SPR and EA1.


3.1.2 Ambitious targets: The EA Zone represents an opportunity to embrace innovation and deliver a cost effective project with acceptable levels of risk.With this inmind EA1 has set the following ambitious targets:


 Reduce the Levelised Cost of Energy (LCOE) to £100/MWh by 2020, in line with recommendations of the OffshoreWind Cost Reduction Task Force report4. Recognising that although EA1 will achieve FID before this point, its activities will influence cost reduction to benefit future EA Zone andwider offshore wind projects.


 Invest an average of £3.5Mper year in R&D/innovation and investment in new technologies specifically for offshore wind


 Tier 1 supplier investment of an average of 3% of annual offshore wind revenues on developing better, more cost effective solutions for the future


We believe the second and third targets above will result in a total expenditure of £50Mon R&D and innovation attributable to the project. [I1] {ii, iii}


3.1.3 LCOE is the dominant parameter assessed inmeasuring the value of innovative concepts and is the driving force behindmuch of EA1’s activity in this area. [I5] {ii, iii}


3.1.4 EA1’s R&D investment targets will help drive activity through the supply chain to achieve its LCOE goal through encouraging further innovation. EA1’s potential tier 1 suppliers’ commitment to innovation is already evident in theMOUs that have been entered and supply chain plans received (Annex 8)[redacted]. [I4] {ii, iii}.


3.1.5 The sections below set out the actions that are being taken or planned to address each of the key impact criteria (as set out in Annex 1) at an industry wide and package specific level for each key component of the windfarm. The impact on the supply chain and the wider impact across the low carbon electricity generation industry is also indicated where possible.Where available website references for innovation projects and initiatives are either included in the text or have been captured in Annex 2H.


3.2 R&D and Technological development [I1&I2]


Project development 3.2.1 Industry wide projects:


 Grid integration: The TWENTIES project is a large EU collaborative R&D project to assist the integration of renewables onto the grid. This project, encompassing 26 European partners, involves 6 large scale demonstrations. Iberdrola is leading one of the demonstrations to prove that wind energy can collaborate technically in grid integration by way of new voltage and active power control systems at wind turbine, windfarmand control area levels. This Iberdrola-led demonstration has already delivered the final development of control tools. The final outcomes of this project will be hugely beneficial to onshore/offshore wind generators and grid operators across the industry. [I1,I2,I5] {iii}


1 The 2013 EU Industrial R&D Investment Scoreboard 2 Foreign exchange rate used in plan - €1.21:£1. Source: Iberdrola Market & Prospectives 3 Iberdrola Innovation Report 2011-2013 (http:// www.iberdrola.es/webibd/gc/prod/en/doc/innovacion_informe13.pdf) 4 OffshoreWind Cost Reduction Task Force report, June 2012 – target based on the EA phase that achieves FID in 2020


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