Offshore Wind Vision
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Transcript of Offshore Wind Vision
OffshOre Wind Vision
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The UK needs offshore wind and the industry has shown it can deliver. Continued momentum is important to build investor certainty, maximise the economic opportunities for the UK and accelerate efforts on cost reduction. A trajectory through to 2025 for offshore wind will provide the UK with the best opportunity for cost effective decarbonisation.
As recommended by the Committee on Climate Change and others, a clear intent to see a build rate of 1 – 2GW (delivering at least 18GW by 2025) would have the following effects:*
• CreatefurtherUK jobs by giving the long term confidence to recruit, train and develop local staff.
• Bringdownthecostofoffshorewindenergyfastertoalevelof £80 - 90/ MWh by 2025 by encouraging further investment in cost saving technology.
• Createacontinuouspipeline of projects that would stimulate competition between developers and suppliers, and build a strong and competitive market for project finance, further reducing the cost of energy.
• EnhancetheleadershiprolefortheUKinthisfieldandcreate export opportunitiesforUKbasedcompanies.
*CommitteeonClimateChange,MeetingCarbonBudgets–ProgressinreducingUKemissions:2015ReporttoParliament
The benefits of clarity
£
“offshore wind is on track to be cost competitive with other new forms of power generation by the mid 2020s. By 2030 offshore wind could supply 35% of UK electricity demand, providing over 50,000 skilled jobs.”
A survey of existing UK offshore wind farms shows that UK
content levels were at 43% by 2014. The sector is on track to
reach the target of at least 50% UK content by 2020. *
Three key messages
The sector is already delivering and can do so much more
Growing the UK supply chain
1) Delivering much needed energy infrastructure quickly
• Weareconsistentlydeliveringourprojectsonschedule and to budget.
• Inthelastfiveyearswe’vebuilt3.7GW capacity – enough to power 3 million homes.• By2030wecaneasilybuild30GWcapacity,enoughtomeet 35% ofUKelectricitydemand.
2) Reducing costs through investment in new technology and increased competition
• Therehasbeena38% reduction in government subsidy.
• Offshorewindisontracktobecostcompetitivewith other new power sources by the mid 2020s.
3) Helping economic recovery
• Thesectorhasalreadydelivered£9.5bn of large infrastructure projects, with plans to deliver another £20bn by 2020 and £30bn by 2025.
• Thesectorhascreated13,000 UKjobs,withparticulargrowth intheNorthernPowerhouse,drivingregenerationofUKmanufacturing and creating skilled jobs for the 25 year lifetime of wind farms.
• TheUKcontentofoffshorewindfarmsisnowabout40% and well on track to achieve the industry ambition of 50% by 2020.
Offshore wind is getting more productiveOffshorewindhasoneofthehighestloadfactorsofallrenewable technologies, and in the future will continue toimprove.Thenewestoffshorewindfarmsarealreadyoperating at load factors of up to 50%.
The sector is attracting global investmentSince 2010, the sector has attracted £9.5 billion of investment.Encouragedbyourreputationforoperatingstable and predictable regulatory regimes for renewable energy, global investors will provide another £16 – 21 billion by 2020 to help bring the total installed offshore wind capacity to over 10GW.
(Source:DECC(March,2015).DeliveringUKEnergyInvestment:LowCarbonEnergy)
Offshore wind is getting cheaper Offshorewindsubsidieshavefallenby38%*andthetechnology is on track to be cost competitive with other new generation in the mid 2020s, even once system costs are taken into account.
(Source:BVG,July2015,Deliveringmoreforless)
Creating skilled jobs around the countryOffshorewindalreadyprovidesemploymentto13,000peopleacrosstheUK.Withcontinueddeployment,thisfigure will grow as industry invests in skills and training. By2030therecouldbeupto50,000peopleworkingdirectly in the offshore wind industry in the development, manufacture and operation of offshore wind farms in the UKandoverseas.
(Source:RUK2013,WorkingforagreenerBritain.Highgrowthscenarioof27GW
creates23,465directand21,188indirectjobs(FTE))
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Annual and cumulative installed UK offshore wind capacity (MW)
ANNUAL INSTALLED CAPACITY CUMULATIVE INSTALLED CAPACITY
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2010–11PROJECTS
2012–14 PROJECTS
MOST RECENT PROJECTS
INDUSTRY TARGETFOR 2020
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
lOW HIGH ANNUAL OPERATING AVERAGES
UK Offshore Wind Load Factors (%)
Global Investment in UK Offshore Wind (£bn’s) Direct Employment in Offshore Wind (000’s)
Levelised Cost of Energy (£ per MWh, 2011 prices)
£16–21bn £30.5bn
£9.5bn0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
OPERATION/MAINTENANCE
CONSTRUCTION/INSTALLATION
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SUPPORT AND OTHER
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SPECIALISED TRANSPORTSPECIALISED TRANSPORT
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Annual and cumulative installed UK offshore wind capacity (MW)
ANNUAL INSTALLED CAPACITY CUMULATIVE INSTALLED CAPACITY
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2010–11PROJECTS
2012–14 PROJECTS
MOST RECENT PROJECTS
INDUSTRY TARGETFOR 2020
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
lOW HIGH ANNUAL OPERATING AVERAGES
UK Offshore Wind Load Factors (%)
Global Investment in UK Offshore Wind (£bn’s) Direct Employment in Offshore Wind (000’s)
Levelised Cost of Energy (£ per MWh, 2011 prices)
£16–21bn £30.5bn
£9.5bn0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
OPERATION/MAINTENANCE
CONSTRUCTION/INSTALLATION
DESIGN/MANUFACTURE
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*Thisiscomparing2ROCsat£45aROCfor20yearstoaCfDfor15yearsatastrikepriceof£120/MWh,assumingwholesalepriceof£45/MWh. *Source:BVGAssociates,May2014,MethodologyformeasuringtheUKcontentofUKoffshorewindfarms:additionalanalysis
Specialised ports are being developed in coastal towns around the country to build and then service the wind farms for their full 25-year lifetime.
ApipelineofprojectsisattractinginvestmentinUKmanufacturingfacilities,helpingtoboostUKcontent.NewUKturbinemanufacturingfacilitiesarebeingbuiltbyMHIVestasandSiemens.OffshoreStructuresBritainopenedanewfacilityinTeessideearlierthisyeartomaketransitionpiecesforUKwindfarms.
OffshoreStructuresBritain (EEW/Bladt)TransitionPieces
NewfacilityinTeessidemaking transitionpiecesforUKprojects
350 new jobs
MHIVestasFacility-WTGblades
FacilityontheIsleofWight
220 new jobs
Siemens-WTG
SiemensandABPnew manufacturingfacilityHull
1,000 new jobs
SembmarineSLP-Lowestoft
Substation construction
200 new jobs
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Annual and cumulative installed UK offshore wind capacity (MW)
ANNUAL INSTALLED CAPACITY CUMULATIVE INSTALLED CAPACITY
2015 2020
80
90
100
110
120
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2010–11PROJECTS
2012–14 PROJECTS
MOST RECENT PROJECTS
INDUSTRY TARGETFOR 2020
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
LOW HIGH ANNUAL OPERATING AVERAGES
UK Offshore Wind Load Factors (%)
Global Investment in UK Offshore Wind (£bn’s)
Offshore Wind Will Be Competitive WithNew Gas Power
Direct Employment in Offshore Wind (000’s)
Levelised Cost of Energy (£ per MWh, 2011 prices)
£16–21bn £30.5bn
£9.5bn0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
OPERATION/MAINTENANCE
CONSTRUCTION/INSTALLATION
DESIGN/MANUFACTURE
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SUPPORT AND OTHER
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SPECIALISED TRANSPORTSPECIALISED TRANSPORT
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At this point, the average cost of energy from offshore wind is competitivewith CCGT, even with the lowest gas price forecast
Source: BVG Associates
Date of Final Investment Decision
Offshore wind snapshot Offshore wind (repowered) snapshot CCGT band Offshore wind band
Cost
of en
ergy (
£/MW
h)
1 2
34 5A
5B
6A
6B
Now
13,000
2030
50,000
Thesectorisalsostartingtoexport.TheUKTIestimates
that there were £90m worth of exports from local offshore wind companies in2014/15,upfrom£1min
2013/14.
By2030thesectorwillbebuilding wind farms with more thanhalfUKcontent,creatingemploymentacrosstheUK,with centres of excellence developing in regions of
higher deployment.