www.RenewableUK.com

A Guide to Measuring the UK Content of Offshore Wind Farms

May 2015

1

Contents Industry Foreword .................................................................................................................................. 2

Executive Summary ................................................................................................................................. 3

Reporting on UK Content – a quick guide ............................................................................................... 4

Data reporting process.................................................................................................................... 5

How to submit information? ................................................................................................................... 6

Which forms to use ............................................................................................................................. 6

Timescales for collection ..................................................................................................................... 7

What we will do with the information .................................................................................................... 7

Ensuring Data Accuracy via Audit ........................................................................................................... 8

Contacts .................................................................................................................................................. 8

Appendices .............................................................................................................................................. 9

Appendix A: Wind farm generating asset owner reporting sheets ................................................... 9

Appendix B: Wind farm transmission asset owner reporting sheets .............................................. 12

Appendix C: Definitions of supply chain elements .......................................................................... 15

Appendix D: Form for calculating UK Content calculation for Supplier and Subsuppliers with a

Contract value over £10 million. ....................................................................................................... 18

2

Industry Foreword

The UK’s wind industry is one that enjoys strong support among the British public. And we are an

industry that is growing rapidly, delivering power into the UK grid and helping create new

employment across the UK. As an industry we can be proud of our achievements, but we must also

recognise that we can go further.

In my role as Co-Chairman of the Offshore Wind Industry Council there are two issues that I am most

asked about. These are about the cost of offshore wind, and the level of UK content. Industry is

working hard on both issues, and the Offshore Wind Programme Board is coordinating action across

the sector to ensure that as an industry we meet our commitments: to get costs down to £100/MWh

by 2020 and to achieve 50% UK content in our offshore wind farms.

But not only is it important that we embrace these challenges as a sector; it is also vital that we

make sure we are held to account. Politicians and the wider public who back our industry and its

continued success have a right to expect that we are open about progress in delivering cost

reduction and increasing UK content.

And of course, we have a positive story to tell. Our industry already reports on cost, and we know

that we are ahead of schedule in work to reach our £100/MWh target. But, as with cost reduction,

we know we have more to do to grow the UK content of our offshore wind farms. I know from

discussions with colleagues throughout the industry that this challenge is being taken very seriously,

helping secure inward investment of top tier manufacturers, and supporting UK companies in

winning work in our sector.

The biggest reason for success in cost reduction has been industry’s shift to larger 6MW+ machines.

And this shift also creates the opportunity for UK manufacturing, as manufacturers make decisions

about where to manufacture this new generation of turbines. Some of these companies are already

committed to the UK, with Siemens and MHI Vestas Offshore Wind now ramping up UK

manufacturing. I hope that in the years ahead we will see more UK successes, as well as more UK

companies achieving export success and becoming increasingly important players in other markets.

But action on UK content cannot come at the expense of cost reduction. We need to make sure the

two go together, which means working hard to make sure that it is UK companies winning work

because they can offer the best value and the best products and services. The UK offshore sector is

home to many significant international energy companies, all of which are committed to supporting

UK companies, and we also work to support a number of important initiatives like the

GROW:Offshore programme and the Offshore Wind Investment Organisation to support companies

wanting to move into offshore wind in the UK.

Our industry is committed to reporting on its progress and being held to account on this important

issue. The reason we do this is because we have a good story to tell already and a commitment to

work together to maximise UK content in the future. This guide, and the accompanying

methodology, help make this process easy to engage with for the UK offshore wind industry and

represent a big step forward in being able to report on UK content in a consistent and transparent

manner.

Benj SykesCo-Chair, Offshore Wind Industry Council

3

Executive Summary The UK’s offshore wind industry is world beating. The UK has more operational wind farms than the

rest of the world put together, with over 5GW in operation or under construction, and a further

10.9GW with consent, and likely to move into construction by the early 2020s.

Yet despite this international advantage, the UK offshore wind sector has not sufficiently capitalised

on its lead to secure UK economic advantage.

As an industry we have a positive story to tell about engineering process and innovation,

decarbonisation and cost reduction. But we need to speak up more loudly to demonstrate that as an

industry we also take delivering UK content and UK economic success seriously. Which is why the

Offshore Wind Industry Council (OWIC) has agreed to begin monitoring and reporting on UK content.

This guide explains the agreed process set out by the Offshore Wind Programme Board (OWPB) for

OWIC. Working on their behalf, RenewableUK will conduct an annual survey of offshore wind

developers, and publish findings, to show how industry is progressing.

Our target, agreed with Government, is to deliver 50% of UK content. Already we have a very

positive story to tell in how it is UK firms leading work in development and operation of wind farms.

UK companies already supply critical components like cabling, foundations such as jackets and

gearboxes. And with turbine manufacturers like Siemens and MHI Vestas Offshore Wind now

committed to UK manufacture, we will soon see a significant increase in UK content in offshore wind

equipment.

So as an industry we need to hold ourselves to account, and also set out what steps we are taking to

go further. To do this, OWPB has worked to establish an agreed methodology, so that as an industry

we are reporting on UK content in a consistent manner across different projects and companies,

which we can also chart over time.

This short guide provides practical information about how to report, and how this information will

be used. It should be used in tandem with the agreed UK Content Methodology developed for

OWPB1 by BVG Associates.

1 Led by The Crown Estate, DECC and RenewableUK on behalf of OWPB.

4

Reporting on UK Content – a quick guide

At the start of each calendar year, RenewableUK will review which wind farms have reached Final

Investment Decision in the previous 12 months. We will then send the relevant wind farm owners a

request, on behalf of OWIC, for them to complete and return a short survey on expected UK

content.

At the same time (except in the first year) we will write to wind farm owners with constructed

schemes to invite them to provide updates if there are any significant changes in UK content since

reporting on FID data.

Developers will be asked to provide data on UK content representing figures for DEVEX, CAPEX,

OPEX and TOTEX.

RenewableUK will then review this information and anonymise it ahead of publication. The data to

be published will be the amalgamated results of wind farms that have reached FID over the previous

five years. So in the first year we will report on projects that have reached FID between 2009 and

2014, and in the second year projects between 2010 and 2015, and so forth. In this way we will track

progress over time, while preserving confidentiality of individual wind farms schemes2.

Following review of data by OWPB (on behalf of OWIC), RenewableUK will publish new data each

summer.

We will also pass anonymised data to Government, to help Government understand how well UK

industry is progressing.

The reporting works primarily on trust. Industry has supported and inputted into the development of

the reporting methodology and the approach, and has bought into the requirement and the

usefulness of making sure this data is publically available. However, Government will reserve the

right to request, via a contracted third party, that developers open up their calculations for review

and audit. Such an audit would be conducted in a way to preserve data confidentiality, but would aid

all parties in ensuring that reporting was accurate and maintaining wider trust in this reporting.

More information on this point is included below.

2 Individual schemes can choose to publish their own reports on an individual scheme’s UK content if they wish.

5

Data reporting process

Wind Farm has reached

Works Completion Date or

reached FID in the previous

calendar year*

RUK requests information on UK

Content or requests updated data if

there has been significant change since

the previous calendar year

Asset Owners complete data

collection process according to

methodology

Data aggregated and submitted

to RUK for publication

No further

action required

Yes

No

*Please note, the first iteration will survey projects from 2009-2014

6

How to submit information?

Following agreement with the Offshore Wind Industry Council to implement a UK Content

Measurement Methodology for Offshore Wind, RenewableUK will be gathering information from

wind farms that have reached Financial Investment Decision in the previous calendar year3. In

addition, earlier stage projects which have reached Works Completion will also be asked to review

existing data, and if necessary update reporting on UK content4.

The 2015 report will be the first time data on UK content of offshore wind farms across the industry

is published. As such, RenewableUK will be collecting wind farm information from Wind Farm Asset

Owners and Transmission Asset owners for projects that have secured FID in the previous five years

and those that have completed construction. Data will be collected for wind farms that have

reached FID and completed construction between the years of 2009 and 2014

For subsequent years5, projects that have submitted data at FID and have subsequently encountered

significant changes between the initial figures submitted at FID and at Works Completion Date will

be asked to recalculate data and resubmit data.

Content figures will be published using a rolling five year timetable; the aim being to track changes

over time rather than year to year variations. This means that it may be necessary for Wind Farm

Asset Owners to submit data for individual wind farms as opposed to aggregating all assets into one

final calculation.

Which forms to use Data will be collected using three forms; the first will include questions regarding the wind farm in

question, the second will allow for the calculation of UK content according of the wind farm and the

third is a consolidated breakdown of UK content according to DEVEX, CAPEX, OPEX and TOTEX.

Appendices A and B outline the forms to be used by Wind Farm Asset Owners and Transmission

Asset Owners when reporting UK content.

The UK Content Methodology developed by BVG Associates should be used as to calculate the UK

content data that is required to complete the three forms.

To fulfil agreed industry reporting only forms 1 (outlining key project information) and 3

(consolidated UK content data) need to be submitted. However, developers are invited to submit

form 2 (detailed UK content breakdown). Appendix C provides a list of definitions that can be used

to help define values for form 2. Completing form 2 provides the data breakdown from which data

in form 3 can be calculated) alongside this information. Provision of this additional detail will to

inform an industry commentary which accompanies the report (for example highlighting those

successes in UK content such as blade manufacturing). This information will also be forwarded to

DECC so that it can understand where UK is enjoying success, and where further Government supply

chain support is required via bodies or programmes such as OWIO and GROW:Offshore Wind. No

information relating to key components relating to individual sites will be published.

3 Our first request for information will be for projects reaching FID or completion between 1st January 2009 and 31st

December 2014. Many schemes have already provided information to BVG as part of UK Content Methodology development; if unchanged this information can simply be resubmitted.

4 Each year we will ask projects which have previously reported post FID, but which have reached works completion in the previous calendar year, to review and if necessary to update their UK content reporting.

5 In 2016, we will seek information on projects reaching FID between 1st January 2015 and 31st December 2015.

7

Timescales for collection

Date

Forms for data collection sent to Developers As soon as possible

Deadline for data to be sent back to RenewableUK 3rd June 2015

RenewableUK analysis and follow-up 3rd June – 10th June 2015

Final aggregated results published at Global Offshore Wind 24-25th June 2015

What we will do with the information

Following the collection, aggregation and anonymisation of the results, an initial report will be

presented to OWIC via OWPB. Alongside the anonymised data, an analysis conducted by

RenewableUK will also be produced in order to provide context to the headline figures that will be

published.

The final aggregated results will be published each summer. Where possible, RenewableUK will use

its annual Global Offshore Conference to present this information to industry and interested groups.

No figures linked to individual wind farms will be published. However, owners themselves will be

able to report publically on individual wind farms, if they so wish.

The published report will provide a percentage total of UK content, and a derived estimate of £UK

expenditure/investment. There will not be an estimate of Gross Value Added to the UK economy as

a result of this expenditure.

The report will provide data based on total expenditure (TOTEX), and also break down this top-line

figure into development expenditure (DEVEX), capital expenditure (CAPEX) and operational

expenditure (OPEX).

The report will publish figures and percentages relating to the average of the UK offshore wind fleet,

based on schemes reaching FID in the last five years. So the first report will give an average of UK

content for schemes reaching FID between 2009 and 20146. Our second report in 2016 will give an

average for schemes reaching FID between 2010 and 2015. And so on. From the second report

onwards we will chart progress across reporting years so that we can build up a record of industry

progress.

In addition, the reporting will provide a brief commentary on progress, as well as a summary of what

actions industry and Government (via groups such as OWIC and OWPB) are doing to improve on UK

content figures.

6 This averaging across years is important to ensure that data tracks progression over time, rather than focuses on

short term variability due to individual construction projects in a particular year. This also ensures that data can

remain anonymised even in years with low levels of delivery.

8

Ensuring Data Accuracy via Audit Collection of data by RenewableUK depends on individual schemes following the UK wide approach

agreed by OWIC, and implemented by the OWPB. As an industry we have agreed to work together to

be held to account.

However, to ensure that trust is maintained in this process, it was agreed by industry and

Government that an independent audit will be conducted periodically. At least once every three

years, DECC plans to commission an independent organisation to audit reporting of at least one wind

farm, to check that high level information submitted to RenewableUK on UK content tallies with

more detailed records held by UK project developers. As such developers will be asked to hold

records on UK content, should DECC request participation in such an audit.

No data will be published or passed onto Government as a result of such an audit. However if

significant differences do become apparent, the developer will be asked to resubmit data to

RenewableUK for inclusion in the next annual report, and the independent audit company will write

to DECC highlighting that a discrepancy has been found and identifying the relevant issue with the

audited project.

Participation in such an audit is recommended by OWPB to ensure confidence is maintained in this

agreed industry reporting framework.

Contacts For further information or any queries please contact:

Oankar Birdi

Supply Chain Policy Officer, RenewableUK

Oankar.Birdi@RenewableUK.com or 0207 901 0690

9

Appendices

Appendix A: Wind farm generating asset owner reporting sheets

Appendix B: Wind farm transmission asset owner reporting sheets

Appendix C: Definitions of supply chain elements Appendix D: Form for calculating UK Content calculation for Supplier and Subsuppliers with a Contract value over £10 million.

Appendix A: Wind farm generating asset owner reporting sheets

Form 1: Wind farm generating asset owner reporting sheet- Required information

Data is to be submitted as percentages to one decimal place.

OPEX figures are to be reported as undiscounted data at the values of the day.

Forecast wind farm lifetime (years from works completion)

Wind farm generating asset owner reporting sheet

Reporting date and stage

Date:

Please choose from: Final Investment Decision (FID), Works Completion Date (WCD), Post-Works Completion Date (Post-WCD)

Name of wind farm

Works completion date (calendar year)

Name of wind farm generating asset owner

Wind farm rated capacity (MW)

Final investment decision (calendar year)

10

Form 2: UK Content Measurement Tool- Participants invited to submit data

Developers are invited to formally submit this in addition to forms 1 and 3. Provision of this

additional detail will to inform an industry commentary which accompanies the report (for example

highlighting those successes in UK content such as blade manufacturing). This information will also

be forwarded to DECC so that it can understand where UK is enjoying success, and where further

Government supply chain support is required via bodies or programmes such as OWIO and GROW:

Offshore Wind. No information relating to key components relating to individual sites will be

published.

Data is to be submitted as percentages to one decimal place.

OPEX figures are to be reported as undiscounted data at the values of the day.

Forecast (F),

interim (I) or

out-turn (O)

data

UK content (%)Non-UK

content (%)

Subtotal (%) (of

DEVEX,

CAPEX, OPEX

Total (%) of

lifetime

expenditure

100%

100%

100%

100%

100%

100%

100%

100%

Average for previous

five years*100%

Lifetime F 100%

Average for previous

five years*100%

Lifetime F 100%

Average for previous

five years*100%

Lifetime F 100%

Average for previous

five years*100% 100%

Lifetime F 100% 100%

F 100% 100%

100% 100%

Other

generation

asset

operational

expenditure

Total

percentage

operational

expenditure

Generation asset decommissioning

expenditure

Total lifetime

Turbine

operation,

maintenance

and service

Generation

asset balance of

plant

maintenance

Wind Farm Asset: UK Content Measurement Tool

* = To be completed for first report following the introduction of this methodology and if post-WCD reporting is

introduced

Permanent generation asset onshore

infrastructure

Generation asset installation

Total percentage capital expenditure

Post-FID generation asset project

management

Turbine supply

Foundation supply

Array cable supply

Generation asset development to FID

11

Form 3: Consolidated data- Required information

Item UK Content

Percentage of

TOTEX

DEVEX

CAPEX

OPEX

TOTEX 100%

Consolidated data

12

Appendix B: Wind farm transmission asset owner reporting sheets

Form 1: Wind farm generating asset owner reporting sheet- Required information

Data is to be submitted as percentages to one decimal place.

OPEX figures are to be reported as undiscounted data at the values of the day.

Wind farm transmission asset owner reporting sheet

Reporting date and stage

Date:

Please choose from: Final Investment Decision (FID), Works Completion Date (WCD), Post-Works Completion Date (Post-WCD)

Name of wind farm

Name of wind farm transmission asset owner

Wind farm rated capacity (MW)

Final investment decision (calendar year)

Works completion date (calendar year)

Forecast wind farm lifetime (years)

13

Form 2: UK Content Measurement Tool- Participants invited to submit data

Data is to be submitted as percentages to one decimal place.

OPEX figures are to be reported as undiscounted data at the values of the day.

Forecast (F),

interim (I) orout-

turn (O) data

UK content (%) Non-UK

content (%)

Subtotal (%) (of

CAPEX, OPEX

or DECEX

Total (%) of

TOTEX

100

Average for previous

five years*

Lifetime F

Average for previous

five years*

Lifetime F

Average for previous

five years*100

Lifetime F 100

F 100

100

Total percentage

operational expenditure

Total percentage transmission asset

decommissioning expenditure

Total lifetime

Export cable supply

Substation supply

Transmission asset installation

Total percentage capital expenditure

Transmission asset

balance of plant

maintenance

Transmission Asset: UK Content Measurement Tool

Transmission asset

operational expenditure

* = To be completed for first report following the introduction of this methodology and if post-WCD reporting is introduced

Transmission asset development to FID

Post-FID transmission asset project management

14

Form 3: Consolidated data- Required information

Item UK Content

Percentage of

TOTEX

DEVEX

CAPEX

OPEX

TOTEX 100%

Consolidated data

15

Appendix C: Definitions of supply chain elements

Table C.1 Allocation of development expenditure by supply chain element.

Element Scope Guide

Generation asset

development to FID

All work and project management costs for the wind farm asset owner from the

award of development rights to the WCD, including wind farm asset owner

staff overheads associated with managing engineering studies, planning

applications and environmental impact assessments, and construction

contract management activities, assuming a multiple engineer, procure and

construct contracting approach to wind farm procurement

Environmental surveys including ornithological species surveys and collision

risk assessments, commercial fishing studies, benthic species surveys, and

pelagic species surveys

Geophysical and geotechnical surveys including the geophysical surveying of a

wind farm area, and a geotechnical survey

Removal of unexploded ordnance, if relevant

The meteorological station, including design, procurement and installation of a

fully equipped meteorological station

Engineering studies includes pre-FEED studies, which include concept design

and constraints analysis undertaken prior to FID, FEED studies, covering

array layout, foundation sizing and choice, electrical array architecture and

installation methods undertaken after FID, and

Development costs associated with onshore infrastructure.

Note that initial development work for multiple phases or a zone is associated

with its first wind farm.

Transmission asset

development to FID

As for generation asset project management, but for transmission infrastructure

only.

Table C.2 Allocation of capital expenditure by supply chain element.

Element Scope Guide

Post-FID generation asset

project management

Project management costs from FID to WCD, either conducted internally or

contracted out, including services to support project delivery

Excluding the project management costs

Turbine supply

The supply of components comprising the nacelle, rotor and tower, including

internals, warranty provision and transport to last port before installation.

Turbine foundation supply

Includes the foundation, sea bed fastening, transition piece, secondary steel

such as J-tubes, vessel landing systems, davit crane and warranty provision,

and

The transportation of the components to last port before installation.

Array cable supply Supply and factory testing of cables, accessories such as terminations and

hang-offs, and warranty provisions, and

The transportation of the components to last port before installation.

Operation, maintenance and

service (OMS) infrastructure Pontoons, vessels, operations base and their warranty provisions.

Generation asset installation Installation work for support structures, turbines and array cables, including

scour and cable protection

16

The transportation of the components to last port before installation

Storage and laydown of components at port

The pre-assembly work completed at a construction port before the components

are taken offshore

Mechanical and electrical completion works and commissioning of turbines and

array cables

The chartering of turbine, array cable and foundation installation vessels and

support vessels, and specialist installation equipment

Construction project management, and

Equipment and materials procured for the wind farm such as cable protection,

navigation aids, grout and scour protection material.

Post-FID transmission asset

project management

As for generation asset project management, but for transmission infrastructure

only.

Export cable supply

Supply of subsea and onshore export cables, accessories and warranty

provisions, and

The transportation of the components to last port before installation.

Substations Assembled offshore substations including topside, foundation, electrical and

accommodation and warranty provisions

Onshore substation structures, electrical components and construction

materials and warranty provisions

Excludes work undertaken on transmission network side, and

The transportation of the offshore components to the last port before installation

and delivery to site of the onshore components.

Transmission asset

installation

The chartering of export cable, and substation topside and foundation

installation vessels and support vessels, and specialist installation equipment,

and sea bed preparation of foundation

The transportation of the offshore components to last port before installation

Construction project management

Equipment procured for the wind farm such as cable protection and navigation

aids

Electrical completion works and commissioning of cables and substation

Onshore cable installation, civil engineering and site facilities, and

Work undertaken on transmission network side specifically related to the grid

connection.

Table C.3 Allocation of operational expenditure by supply chain element.

Element Scope guide

Turbine OMS

Maintenance and service costs (excluding fulfilment of warranty obligations),

and

Owner’s internal asset and site management.

Generation asset balance of

plant OMS

Survey, maintenance and service of foundations, array cables, and

Chartering of vessels and maintenance of OMS base and quayside

infrastructure.

Other generation asset OMS The Crown Estate rent, insurance, environmental impact surveys, rates,

community stakeholder relations, and other miscellaneous expenditure.

Transmission asset OMS Survey, maintenance and service of onshore and offshore export cables and

onshore and offshore substations.

17

Table C.4 Allocation of decommissioning expenditure by supply chain element.

Element Scope guide

Decommissioning of

generation asset infrastructure

Removal of turbine and subsea structures and array cabling above the sea

bed, but

Excludes any recycling transactions.

Decommissioning of

transmission asset

infrastructure

Removal of offshore substation topsides and removal of substation support

structure and export cabling above sea bed

Decommissioning of onshore substation, but

Excludes any recycling transactions.

18

Appendix D: Form for calculating UK Content calculation for Supplier and

Subsuppliers with a Contract value over £10 million.

The following form will be shared in order to calculate UK Content for contracts about the £10

million threshold. The numbers in italics indicate where a judgement of UK Content has been made

without requesting further information from Suppliers. The darker shaded cells remain empty. Note

that some figures have been rounded.

Contract

Contract

value

(£million)

% of base

cost in

contract

UK

content

in

contract

(%) Subcontracts

Subcontract

(£million)

% of base

cost in

subcontract

UK content in

subcontract

(%)

Contribution

to UK content

of contract

A1 6.0 55% 85%

A2 4.0 36% 55%

A3 1.0 9% 45%

Margin 1.0

B1 9.0 43% 20%

B2 6.0 29% 75%

B3 3.0 14% 45%

B4 3.0 14% 75%

Margin -1.0 -5%

C1 7.0 52% 25%

C2 4.5 33% 50%

C3 2.0 15% 20%

Margin 1.5

D1 4.0 44% 40%

D2 3.0 33% 5%

D3 2.0 22% 5%

Margin 2.0

E 8 10% 46% 4.6%

F 7 9% 85% 7.4%

G 4 5% 65% 3.3%

H 3 4% 90% 3.4%

Base cost 80

Margin 20

Total 100 50.0%

C 15 19% 33% 6.1%

D 11 14% 21% 2.8%

11.8%

A 12 15% 70% 10.6%

Template for calculating UK content for Suppliers and

Subsuppliers with a contract value over £10m.

B 20 25% 47%