Offshore Wind Supply Chain Event

Offshore Wind: Securing the benefits

Scotland, and the Highlands and Islands in particular, undoubtedly hold a formidable share of natural renewable energy resources, not least in the rapidly advancing offshore wind, wave and tidal sectors.

The surrounding seas boast up to a quarter of Europe’s offshore wind and tidal potential, and a tenth of its wave power capacity,

But the maths alone provide no guarantee that the country, or the region that comprises more than half its land mass, would gear up fully or fast enough to become a global leader in the emergent offshore manufacturing and services supply chain.

That is why the Scottish Government’s economic development agencies, Scottish Enterprise (SE) and Highlands and Islands Enterprise (HIE), have undertaken a major rolling assessment of how and where to address big, catalytic infrastructure needs.

Ports and harbours hold the key

Developed in close collaboration with industry and other stakeholders, this National Renewables Infrastructure Plan (N-RIP) focuses on practical, market-led development of an existing network of large, versatile ports and harbours, five of them in the HIE area.

The N-RIP report recognises that, apart from such facilities, several other innate strengths complement the country’s natural advantages, including a skilled, experienced and flexible energy business base founded largely on oil and gas (offshore deep water expertise), a dynamic skills development framework, and a strong innovation and development support system.

But it pinpoints the game-changing potential of strategic port and harbour development which, through private and public investment totalling £223 million, could see 11 of the most promising offshore wind manufacturing sites brought to competitive readiness.

The five Highlands and Islands sites identified are Arnish in the Outer Hebrides, Kishorn and Campbeltown/Machrihanish on the West Coast, and Nigg and Ardersier to the east. The remaining six across Scotland are Leith, Dundee, the Fife Energy Park at Methil, Hunterston, Aberdeen and Peterhead

Investing for growth and employment

N-RIP sees a finite window of opportunity of around 12-months to ensure that there is market interest and the necessary investment is in place for the sites.

The investment is required for adequate deepwater access, quaysides and laydown areas, as well as to ensure that essential buildings and specialist facilities such as craneage are ready within the next three years. This is to meet predicted offshore wind market demand for manufacture, shipment and installation of subsea structures, towers, nacelles, blades, monopiles and components.

In return, the revamped ports could generate an economic impact ‘payback’ of nearly £300 million a year and underpin creation of more than 5,000 jobs, up to half of them in the Highlands and Islands.

This revenue and job creation prediction is based on production and deployment of an anticipated 750 offshore wind units per year as development rolls out around Scotland’s shores.   

Market-led priorities

The report envisages that offshore wind manufacturing and other supply chain businesses based at the sites could operate individually, and in three regional clusters of supply chain activity, two of these in the Highlands and Islands.

With varying levels of known market interest in each site, the report describes how any public sector investments needed to support commercial development should be prioritised according to the firmest and most immediate locational interest from offshore wind supply chain companies.

The strongest initial market interest has been in the Highlands’ largely dormant Nigg fabrication yard, and in the Dundee, Leith and Methil ‘cluster area’. 

Growing interest has also been noted in the West Highlands sites. Here, Arnish and Campbeltown/Machrihanish are already in productive use, by fabricators Bifab and tower manufacturers Skykon respectively, while Kishorn is now the subject of a potential multi-million pound masterplan to regenerate facilities including its dry dock, 26 hectares of hardstanding, slipway and four deepwater quays. 

HIE’s ability to assist through harnessing investment tools such as Regional Selective Assistance (RSA) funding, co-investment equity or direct grants, was illustrated in Skykon’s recent redevelopment. Here, the company received RSA and HIE grants approval totalling nearly £15 million to significantly expand production of on and offshore turbine towers.

Clustering for competitiveness

N-RIP’s recommended three regional offshore wind clusters are grouped around the Moray Firth (taking in Nigg and Ardersier), the West Coast (Arnish, Kishorn and Machrihanish/Campbeltown), and the Forth/Tay area (Dundee, Leith and Methil). These are seen as developing mutually beneficial expertise and skills links with a fourth, existing subsea industry cluster, focused around Aberdeen and Peterhead.

Meanwhile, a fifth cluster of sites further north is seen as supporting wave and tidal manufacturing and services to support The Crown Estate’s huge commercial leasing round for the Pentland Firth and Orkney Waters.

Though business activity will clearly go on between these regional localities, the local clustering approach reflects a range of economic and commercial factors. Investment costs can be lower than some single-site locations in competing regions; products feeding in to bigger projects can be moved, assembled and installed offshore using sea connections; the clusters can work with different local labour markets; and businesses can still work on their own individual projects, with the benefits of access to quayside load-out and other facilities.

Meanwhile, any other Scottish site not highlighted in the report can also look for investment through the same public sector routes, provided they have clear evidence of strong market interest.

Continuing platform for action

N-RIP will continue as a public and private sector planning and consultation process. Colin Grant, HIE’s project manager for N-RIP, said: “This report comes at a very exciting time for the offshore renewables sector in Scotland and we see the huge long term economic benefits for the coastal communities across our region, from Shetland to Kintyre and the Outer Hebrides to Moray.”

Scottish Renewables Director and co-chair of N-RIP’s delivery group Andrew Jamieson said:  "Scotland is very close to making a breakthrough in becoming a major force in the manufacturing of offshore renewables equipment, not just for Scotland’s needs but also the export market.  This plan sets a platform for quick action.  Investment will be led by the private sector but, with early public sector commitment to co-invest, Scotland can make these highly prized jobs real, building on what has already been done at Machrihanish with Skykon, the Fife Energy Park and at Arnish with BiFab."

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