The pipeline of offshore projects in England and Wales includes over 3.5 GW of consented capacity that could start construction within the next few years, and a further 1.4 GW waiting for permits. Scotland arrived late to the party, but earlier this year seabed owner the Crown Estate awarded exclusivity agreements to ten projects in Scottish waters totalling 6.4 GW. These allow the developers to conduct site surveys and begin the consultation process required in the lead up to applying for consent.
Meantime, plans are progressing apace for the third and biggest round of government site concessions for offshore development yet. The government anticipates up to 25 GW of Round 3 projects in nine zones around Britain, with much of the capacity built farther out to sea and in deeper waters than ever before (page 10-11). This month, following its environmental study of the seas around the UK to map the potential for offshore energy, the Department of Energy and Climate Change (DECC) expects to announce how much development, and where, will be allowed under Round 3. The Crown Estate will then firm up the exact extent of the nine zones where wind development is to be permitted.
Interest from potential developers in Round 3 is keen (Windpower Monthly, April 2009). Companies from nine European countries have entered a bidding war for exclusive rights to develop within each of the zones on offer. The Crown Estate is currently assessing 40 bids from a total of 18 consortia and expects to award the nine zone development licences by the end of the year.
In all, the government maintains that the UK could see up to 33 GW of wind power deployed in British waters by 2020. The British Wind Energy Association (BWEA), more modestly, reckons on some 25 GW being realised. Either way, all depends on the government, energy regulator Ofgem, Crown Estate and industry pulling together to overcome a number of issues such as grid, permitting processes and supply chain availability - not only of the turbines themselves, cables and vessels, but also port infrastructure (page 14).
Progress is being made. Ofgem and DECC have taken on board concerns expressed by the wind industry as they put the finishing touches to a new offshore transmission regulatory regime, prior to launching the first competition for licences to own and operate the wires connecting offshore wind farms to the mainland grid this month (page 13). And to speed up the planning process, a new infrastructure planning commission is to be established later this year to decide consent applications from large infrastructure projects including wind farms.
Confidence among the offshore wind community is higher than ever. Gone are the warnings of just a few months ago from large utility developers - most notably E.ON, Centrica and RWE - that they are holding fire on massive investments in offshore wind, maintaining that in these credit crunch times, the economics do not work. The government's April budget announcement of a short-term increase in support under the Renewables Obligation (RO) to tide the industry over the current market conditions has quashed fears and delighted the offshore wind community. It could mean an extra £525 million of new money for the sector.
Within three weeks of hearing of Chancellor Alistair Darling's intention to boost support for offshore wind by increasing the number of renewables obligation certificates (ROCs) for offshore wind from 1.5 ROCs to 2 ROCs per megawatt hour, two consortia had already secured board approval for investments in projects totalling nearly 850 MW of capacity. This includes the first 630 MW phase of the flagship London Array project in the outer Thames Estuary. To the government's delight, it is due for completion in time for the London 2012 Olympics.