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We are at the dawn of a global offshore wind era when floating offshore wind is going to see
tremendous growth rates, especially for first movers and established technology providers
from related fields.
Floating Offshore Wind is on the pathway to become commercially competitive with other
forms of electricity generation and has the potential to also reduce the generation cost of
bottom-fixed offshore wind. This creates a new market with the associated supply chain,
employment and export opportunities from which first movers and those with experience in
related fields such as offshore oil and gas or maritime will benefit most.
Floating Offshore Wind technologies that have been demonstrated need to be developed
further to commercial realisation in pilot and pre-commercial projects. New concepts and
innovations need to be developed further to enable a healthy competition in the market and
to allow the diversification of technologies for different markets to meet with different ambient
conditions.
The local Gross Value Added (GVA) impact of supporting floating offshore wind exceeds the
support that goes into pre-commercial projects: 397 M£ local GVA result from a 351 M£
support for a pre-commercial array. Commercial scale projects create a GVA in excess of 1.7
B£ without the need for any support. Although the GVA of pilot projects will not exceed the
support required, it will still amount to over 60% of the support, and more importantly enable
the supply chain to gain significant experience which can be applied to future export markets.
The cost reductions achievable with floating offshore wind are significant as the technology
will benefit from both cost reductions observed in fixed offshore wind as well as economies of
scale in the production of substructures. Between demonstrator and pilot array projects
Statoil, with the most mature floating offshore wind technology, Hywind, observed a cost
reduction of 70%i, and expects to arrive at LCOE of 40-60€/MWhii by 2030. This is
consistentwith most technology developer’s expectations.
Similar to bottom fixed offshore wind, floating wind has synergies with the Oil and Gas
industry which has been successful in introducing floating technology to the hydrocarbon
sector. There are many technology synergies which could be migrated across from areas such
as design, fabrications and installation of platforms, mooring and anchor systems. Given the
challenging oil and gas sector, floating wind offers a viable parallel market for industry
expertise to be diversified in these challenging times and safeguard UK jobs and in some
areas an export opportunity.
The ability of the UK to leverage its existing expertise from the offshore hydrocarbon sector
has been key in establishing its success as a leader in fixed bottom offshore wind which has
resulted in UK being the global leader in 2018. While countries such as Japan, France and the
United States all have keen interests in developing floating wind, they lack either an
established offshore hydrocarbon sector or an offshore wind industry which in essence may
impede its rate of technology development and in turn its cost reduction potential. Hence in
this lies the global export opportunity for the UK in the export of its knowledge, innovation
and expertise to these nations which could be realised in similar delivery services to that
experience by the UK Oil and Gas Sector.
Based on this, the Friends of Floating Offshore Wind request a strong policy
commitment and the opportunity to discuss establishing a suitable route to market.
Policy Commitment
The Friends of Floating Offshore Wind suggest that, as an industry, we set a target of 1 GW
floating offshore wind by 2025 and 5 GW by 2030 to achieve economies of scale necessary to
become commercially competitive. These capacities would include a range of pilot, pre-
commercial and commercial projects at various stages of development, construction and
operation by the stated dates. This would be a modest contribution to the targets set out by
the entire offshore industry to deliver 30GW by 2030 and 50GW by 2050 iii.
Route to Market
The Route to Market should include a support system for a limited number of pre-commercial
arrays (e.g. 3x) and pilot projects (e.g. 3x) to enable the development of innovation, without
competing with more mature and established technology in CfD tenders. The shape and form
of the support should be discussed to meet with policy plans and expectations of
taxpayers/rate payers.
One starting point could be the provision of innovation PPAs that allow the direct sale of the
electricity generated from these innovations to commercial consumers which in turn could
receive tax breaks for the support provided (also described in RenewableUK’s consultation
response to the BEIS Green Paper: Building our Industrial Strategy)iv.
The Friends of Floating Offshore Wind also request that floating offshore wind is
fully included and considered in the negotiations for a Sector Deal for offshore wind.
Barge Spar
Barge type floating substructures balance Spar type structures are slender cylindrical
the hydrodynamic and wind turbine loads structures which keep the center of
against buoyancy of the floater which is buoyancy over the center of gravity in a
held in place by catenary mooring. As with long slender column that offers little
all other types, electricity is exported resistance to wave loads thus making a
through a flexible (‘dynamic’) cable that is simple geometry with good stability. Spars
interfaced with a static cable on the seabed can be made from concrete and steel, are
or directly with the next turbine location. moored with catenary moorings and can be
Barges are shallow in draft and can be constrained by their deep draft. The
made from concrete or steel. A first Hywind spar concept demonstrator been
demonstrator based on this concept is operated in Norway and a first pilot project
ready to be commissioned in France, a is operational in Scotland.
second under construction in Japan.
Tension Leg
Semi-Submersible
Tension leg substructures are semi-
Semi-submersible substructures consist of submerged buoyant structures, anchored
several buoyancy tanks that are connected to the seabed with tensioned mooring lines.
with horizontal or lattice members thus The shallow draft and tension stability
providing the buoyancy to balance the allows for a smaller and lighter structure
hydrodynamic and wind turbine loads. For but increases stresses on the tendon and
greater compactness, some concepts use anchor system. There are several concepts
active ballasting. Semi-submersibles are under development which have been tank
shallow in draft and can be made from tested.
concrete or steel and are held in place by
catenary moorings. This concept was
demonstrated with the WindFloat project
off Portugal.
Floating offshore wind technologies that have been demonstrated need to be developed
further to commercial realisation in pilot and pre-commercial projects. New concepts and
innovations need to be developed further to enable a healthy competition in the market and
to allow the diversification of technologies for different markets to meet with different ambient
conditions.
other seabed uses: planned/exisiting offshore wind farms, oil & gas infrastructure (platforms, pipelines, shipping
routes, environmental protection areas.
For the pilot project, it was assumed that It should be noted that the local content
five 6 MW wind turbines would be used share is significantly higher than for
giving a total capacity of 30 MW. For a pre- bottom-fixed offshore wind farms for the
commercial array, the number of units components which share the supply chain
would increase to 12 and the respective with the offshore oil & gas industry:
capacity would reflect state of the art in platform manufacture, mooring systems,
current machine technology at 8 MW giving umbilicals/dynamic cables and installation
a total capacity of 96 MW. The commercial activities. The tables in Appendix A make
array would consist of 50 units at a capacity the approach and the individual values
of 15 MW which is generally expected to be transparent.
state of the art around 2025.
As a result, 142 M£ GVA result from a 227
The required feed-in remuneration was M£ support for a pilot project. The pre-
calculated to be 170 £/MWh for the pilot commercial array would lead to GVA
project, 100-120 £/MWh for the pre- generation of 398 M£ against a support of
commercial array and 55 £/MWh for the 351 M£ and commercial projects create a
commercial scale project. With these GVA of over 1.7B£ without the need for
assumptions, the cumulated difference support.
between generation cost and projected
Commercial scale projects realised outside
market rates would be 227 M£, 351 M£ and
UK coastal waters, would create an influx
-47 M£ for the total lifetime of the project
of revenue through the export of goods and
on the cost side respectively.
services which have been qualified in the
To calculate the GVA from the CAPEX and course of the realisation of the pilot and
OPEX, the methodology proposed by the pre-commercial projects in UK.
Crown Estate publicationxv was applied: In
a first stage the CAPEX and OPEX Local Impact- Global Leadership
expenditures are broken down in activities
As can be seen from the results of the
or components which are then associated
socio-economic calculations, the local GVA
with SIC codes (Standard Industrial
impact of supporting floating offshore wind
Classification as defined by the UK Office
exceeds the support that goes into the pilot
for National Statistics).
arrays or pre-commercial projects. This is
For each SIC code, GVA Effect multipliers no surprise for an industrial country where
have been collected from most recent local supply chain can be mobilised by
Scottish government statisticsxvi. Not every diversification from other industries. Even
SIC code has a multiplier calculated for it, with projects outside UK territorial waters,
in that case the best fit SIC with a GVA there would be significant local GVA
multiplier was considered. impacts from specialist services and a
developed supply chain for this new
In the final step, the local content share of industry
the respective expenditures was selected.
As outlined by Renewable UK in their open response to the consultation on the BEIS Industry Strategy
Green Paper, we agree that the US Production Tax Credit model could be adapted towards an
Innovation PPA where cutting-edge technologies will compete for support via sales of electricity from
companies wanting to support innovation. In this mode, buyers of energy from innovative energy
technologies will receive an inflation-adjusted kWh tax credit at government-set levels that are in
excess of market rates. This would provide a limited support mechanism delivered outside of the Levy
Control Framework (or its successor) which will provide one route to supporting full scale floating
offshore wind demonstrators without additional cost to the electricity consumer. This, with a further
bridging mechanism (also as described by Renewable UK) will enable floating offshore wind to reach
the commercial maturity required to deploy at scale and provide competitive low-cost energy.
The certainty of this would give investors Following observations from offshore wind
the confidence to invest in project supply chain reactions under policy
development, diversification of existing uncertainty in other legislations, it is safe
products and services and in development to assume that only small parts of the UK
of new products and services. supply chain would be able to survive the
wait until the technology is coming back to
Route to Market the UK to be deployed at commercial scale.
For the Route to Market, a support system Meanwhile other nations such as Norway
for a limited number of pre-commercial and France are supporting pilot projects
arrays (e.g. 3 x) and pilot projects (e.g. 3 and pre-commercial arrays or prepare the
x) should be established to enable the launch of tender rounds for large
development of innovation outside commercial projects at GW scale.
competing with more mature, established
If the technology would not be established
technologies in CfD tenders. The shape and
in the UK, there would be:
form of the support should be discussed to
meet with policy plans and expectations of - No generation of new jobs
taxpayers/rate payers. - Existing jobs in old technologies
would fall away
In addition, we ask that consideration is
- No regeneration of costal /
given to ensuring a route to market
industrial areas
through development activities, including
- Additional cost in social welfare
appropriate consenting mechanisms (e.g.
systems
Survey, Deploy & Monitor) and leasing
- No additional tax revenue
rounds including floating offshore wind.
- Supply chain for export and UK
One starting point could be the provision of projects is not established/
innovation PPAs that allow the direct sale qualified, further commercial scale
of the electricity generated from these projects at GW scale generate no
innovations to commercial consumers local (tax) revenue
which in turn could receive tax breaks for
A development opportunity would be
the support provided (also described in
missed.
The activity categories were then assigned the most relevant SIC (Standard
Industrial Classification) code. This was done as The Scottish Government publishes
a list of GVA (Gross Value Added) multipliers for each SIC code, showing the total
GVA effect of money spent in each industrial category.
These multipliers were used to assess the total economic impact of the projects by
GVA as shown in the table below.
Finally, an assessment was made of the likely percentage of local (UK) content for
each activity, which when multiplied by the total GVA provides the contribution of
the projects to the UK economy. This can then be compared to the cost of
subsidising the project in the UK.
Pre Commercial
% Local Content Pilot Array Array Commercial Array
Total GVA
Applications and Consenting 100.0% £ 1,000,000 £ 2,700,000 £ 11,035,000
Development
Floating Power Plant (FPP) are the developer of • Comprises concepts from the offshore
a platform for floating offshore wind turbines wind and oil and gas industries to deliver
which integrates wave energy convertors into a highly stable platform
the system. • Is constructed in existing local shipyard
and port facilities, with its modular
FPP have over 2 years of offshore experience design and the use of existing
with their P37 R&D platform which is the only components providing further
wind and wave hybrid platform to have opportunity for high levels of local
delivered compliant power to the grid. content
• Provides a low cost of energy solution in
The company has offices in Scotland, Denmark
areas inaccessible or operationally
and Norway with a dedicated team of
challenging to other foundation
engineering and project managers working with solutions.
industrial partners, who bring a wealth of • Is easy to install with small, cost effective
relevant industry experience to the vessels while the wave absorbers create
development of the technology. an offshore harbour, improving safety
and accessibility for routine
FPP are currently involved in three projects in
maintenance.
the UK and Ireland which are in the early stages • Integrates the latest commercially
of development and will utilise FPP’s full scale available wind turbines, currently up to
system, the P80. 8MW, with between 2 and 3.6MW of
wave energy capacity depending on the
site resource
BMT's combination of intellectual rigour and Structural and marine monitoring systems for
commercial insight has helped us to play an moored offshore structures include data hosting,
important and increasing role in industries as management and technical analysis.
diverse as oil and gas, defence, renewable energy, Motions & Moorings:
ports, civil infrastructure, risk management and
maritime transport. Our experience and knowledge of naval
architecture, marine engineering, hydrodynamics
and aerodynamics gives us a unique capacity to
understand the loads and motions of floating,
Our experience and knowledge of metocean semi-submersible and submerged structures and
forecasting and data collection combined with their moorings, risers and cables.
marine engineering, hydrodynamics and
aerodynamics gives us a unique capacity to Tow Out:
contribute to improved safety, reliability, BMT provides risk-free, accurate and reliable
performance and economics of all types of simulations of ship-handling, manoeuvrability and
offshore marine assets. mooring to aid design, planning and crew training.
Marine Growth:
Marine growth over time can greatly affect the
loads on structures and moorings. BMT has
extensive experience assessing the likely marine
growth and the effect on loads and motions.
Our technical expertise and in-depth JDR is delivering array cables to the giant
industry knowledge enable us to respond Hornsea One project as well as the first
to design challenges and new situations commercial project using 66kV array
with pioneering solutions, while retaining cables, East Anglia One.
our proven design and technical
reliability.
JDR has also been selected as preferred
In 2017, JDR joined the TFKable group. cable supplier to WindFloat project in
Portugal, the world’s first use of dynamic
66kV cables, for floating offshore wind
application.
i
Sonja Chirico Indrebø, Statoil on Renewable UK Floating Offshore Wind Conference 14 Nov 2017, Glasgow:
http://events.renewableuk.com/images/documents/FOWUK17/A1-Sonja-Chirico-Indrebo.pdf
ii
https://www.statoil.com/en/news/worlds-first-floating-wind-farm-started-production.html
iii
http://renews.biz/109981/uk-offshore-deal-in-summer/
iv
http://c.ymcdn.com/sites/www.renewableuk.com/resource/resmgr/publications/RenewableUK_response-
_Buildi.pdf?hhSearchTerms=%22ppa%22
v
https://topsectorenergie.nl/sites/default/files/uploads/Wind%20op%20Zee/20170220_Rap_TKI_Offshore_Wind_
Cost_reduction.pdf
vi
https://www.boem.gov/National-Offshore-Wind-Strategy/
vii
Sonja Chirico Indrebø, Statoil on Renewable UK Floating Offshore Wind Conference 14 Nov 2017, Glasgow:
http://events.renewableuk.com/images/documents/FOWUK17/A1-Sonja-Chirico-Indrebo.pdf
viii
https://www.statoil.com/en/news/worlds-first-floating-wind-farm-started-production.html
ix
http://www.bbc.com/news/uk-scotland-highlands-islands-39665550
x
https://www.bp.com/content/dam/bp/pdf/energy-economics/energy-outlook-2017/bp-energy-outlook-2017.pdf
xi
https://windeurope.org/wp-content/uploads/files/about-wind/reports/Floating-offshore-statement.pdf
xii
http://c.ymcdn.com/sites/www.renewableuk.com/resource/resmgr/publications/RUK_Export_Report_final_web
_.pdf
xiii
http://www.telegraph.co.uk/business/2017/09/11/offshore-wind-power-175bn-investment-boom-costs-halve/
xiv
http://www.dongenergy.com/en/media/newsroom/company-announcements-details?omxid=1557851
xv
https://www.thecrownestate.co.uk/media/152036/socio-economic-methodology-and-baseline-for-pfow-wave-
tidal-developments.pdf
xvi
http://www.gov.scot/Resource/0052/00522790.xlsx
xvii
http://c.ymcdn.com/sites/www.renewableuk.com/resource/resmgr/publications/RenewableUK_response-
_Buildi.pdf?hhSearchTerms=%22ppa%22