As a Cornwall MP I am very keen to see the development of floating offshore wind (FLOW) in the Celtic Sea. It is the next frontier in the UK’s clean energy transition, positioned to unlock up to 4GW of power by 2035 – enough to power four million homes.
The ambition to put floating offshore wind here, where it would complement other offshore arrays, and the opportunities that arise from it for Cornwall – our potential supply chain, economy and people are vast. However, to be brutal, so far ambition is still all it is.
I wanted to get a backbench debate to reinforce the importance of acting now or missing the boat in the Celtic Sea and to suggest what we need to do to unlock that vast potential. I was lucky to be able to make the case along with colleagues from Cornwall and Wales to Michael Shanks – Minister for Energy.
Contracts for Difference
DESNZ ask developers to compete for contracts for a price on the energy they produce. These are called Contracts for Difference. After 6 rounds of these over recent years, only one small contract has been awarded in the Celtic Sea.
Projects in the North Sea have received significantly more investment to date, and have more developed supply chains and port capabilities enabling them to deploy FLOW at lower costs. There is no offshore oil or gas legacy in the Celtic Sea – it is a greenfield site and lacks the infrastructure it will need to scale up. It needs targeted support to reach equity with the North Sea. So although the Celtic Sea is a fantastic opportunity, there’s a risk that investor interest in the region could be lost.
The focus of developers in the Celtic Sea is currently on small stepping stone (or test & demonstration) projects, which have an important role in giving confidence to the industry and investors, and reducing the cost and risks of future commercial-scale projects.
These ‘stepping stone’ projects currently face severe challenges. An out-of-date Contract for Difference is making one unviable and the other 2 are stricken with planning issues and investment bottlenecks.
DESNZ could ringfence funding for FLOW along either geographical or technological lines. Geographic ringfencing would remove direct competition with the North Sea and technological ringfencing would unblock Stepping Stone projects by making them viable.
Investment in ports and Infrastructure
To support the development of FLOW the UK needs a national ports strategy and upgraded ports. This will require significant amount of capital investment. However, uncertainty has led to investors holding off on developing ports.
France are already ahead of us having committed £900 million over the next decade to the port of Brest. We need to catch up. The National Wealth Fund could provide the leading investment and certainty required to kickstart private port investment.
A Unified Strategy, Workforce and Supply Chain
FLOW in the Celtic Sea requires a specific strategic focus from Government, along with a spatial strategy for the ocean after consultation with the fishing industry, conservationists and scientists.
It also requires a co-ordinated approach to how DESNZ, The Crown Estate, GB Energy and the National Wealth Fund exercise their auction processes. They could use World Trade Organisation exemptions to encourage local supply chain building and workforce training investment by developers.
The Crown Estate’s option fees and the rules around how they are used could also be reconsidered so that they can be deployed as a catalyst towards greater investment in the regional supply chain.
DESNZ and the Crown Estate could put supply chain, social value and biodiversity net gain incentives directly into local delivery mechanisms.
The National Grid and Planning
At present the National Grid and planning consent requirements are huge barriers to development. A project currently takes an average of 15 years. To reach this Government’s Net Zero goals we need to speed up this process. The new ‘Clean Power Action Plan’ is a step towards a vital electricity grid network design. The National Energy System Operator (NESO) will be working on this in the coming year with the Crown Estate.
A masterplan for FLOW in the Celtic Sea is so important. Without it, we could lose out on the benefits of this nationally important infrastructure project and risk the goal of reaching clean energy by 2030.
There’s a huge future in the Celtic Sea. We just need to reach out and grasp it.
There’s a huge future in the development of floating offshore wind in the Celtic Sea, we just need to grasp it
