Despite having pioneered offshore wind development, with the UK’s first commercial wind farm at North Hoyle commissioned in 2004, Wales has seen just two offshore wind farms constructed in Welsh waters since.
Setbacks from the cancellation of two large Round 3 zones – the Atlantic Array and Celtic Array – have severely blunted the Welsh attack into UK offshore wind, limiting opportunities to harness the abundant wind resource around Wales’ much-adorned coastline.
However, site extensions and new leasing rounds administered by The Crown Estate could begin to unlock the enormous potential to deliver high volumes of low carbon electricity to consumers and attract much needed investment to Wales’ coastal communities
Wales has long been a strategically important net exporter of power to the UK grid, mostly dominated by fossil fuel generation. However, the introduction of ambitious renewable energy and decarbonisation targets is opening opportunities to replace ageing coal and gas plants with clean, renewable sources.
Given lack of support for onshore renewables, offshore wind is one of the few scalable options.
With 48% of its energy consumption supplied from renewable technologies, Wales is making steady progress towards the 70% goal by 2030. However, given the current lack of support for onshore renewables in the UK, offshore wind is one of the few scalable options for meeting its long-term targets up to and beyond 2030. The dramatic cost reduction observed in recent years also makes offshore wind one of the cheapest forms of generation and a no-regrets option for policy makers.
If projects can be secured, offshore wind can attract considerable investment and associated socio-economic benefits to Wales. With typical spend of ~£2-4bn ($2.5bn-5bn) over the lifetime of a project, even capturing a small slice of this could bring many millions of pounds of investment to Welsh businesses and communities. Beyond pure economics, offshore wind also ties in with Wales’ rich maritime heritage, helping to extract value from the natural resources of its surrounding seas.
Wales has several large ports that would be well placed to service offshore wind developments, particularly during operation. For example, the Port of Mostyn has established itself as Wales’ premier offshore wind port, becoming a leading hub for O&M activities that has benefitted several local businesses active in the marine services industry.
Although construction opportunities have been more limited, with the right investment Welsh ports could be competitive with neighbouring rivals in England and Northern Ireland, at least for a portion of installation campaigns. Furthermore, increasing pressure for UK content is expected to create more opportunities for domestic suppliers and help to attract major overseas suppliers to establish local facilities. For example, UK content requirements was a key driver for Prysmian establishing a production line for submarine cables in Wrexham.
However, investment in port infrastructure and large manufacturing facilities will require visibility of market volume in close proximity to Welsh-based suppliers. With a marine area of 32,000 sq km and high average wind speeds in relative close proximity to shore, the potential for offshore wind around Wales is considerable. Nevertheless, there are physical and human factors that will constrain deployment and steer development towards the most attractive locations.
In the near-term, the greatest opportunities lie off North Wales in the relatively shallow waters of the Irish Sea. Having already hosted Wales’ three existing offshore wind farms, a potential extension at innogy’s 576 MW Gwynt-y-Môr wind farm represents a low-hanging-fruit option to add capacity in the eastern part of the Irish Sea. Meanwhile large areas further west, particularly to the northeast and west of Anglesey, could host GW-scale projects through upcoming leasing. Indeed, North Wales and Anglesey represent two of just nine UK regions being progressed for Round 4 leases by The Crown Estate.
Longer-term, the deeper waters off Pembrokeshire to the south-west host the strongest wind resource, in addition to good grid links and port infrastructure around the energy cluster of Milford Haven and Pembroke Dock. The 90-180 MW Pembrokeshire Demonstration Zone could serve as an important catalyst in commercialising floating wind technology capable of exploiting this resource.
With a UK pipeline that already exceeds the 30 GW industry target by 2030, securing contracts in auctions over the coming decade will require projects to be highly competitive. A quick glance at The Crown Estate’s favourable resource areas indicates a two-way division between projects off the East Coast and those in the Irish Sea. However, there are several reasons to be optimistic that the Irish Sea, and Wales in particular, can be a key growth region for UK offshore wind.
First, Welsh sites have high average wind speeds in closer proximity to shore than several equivalent sites off the east coast. Second, reduced deployment to date has resulted in less clustering off North Wales, with potential for fewer constraints and reduced consenting risk. Lastly, development around Wales can align with Sector Deal ambitions to increase the regional diversity of offshore wind development.
This will spread the economic benefits around the UK, smoothing the generation profile in response to variable wind patterns, and mitigating potential grid constraints and bottlenecks. Indeed, there are economic and system benefits in maximising the utilisation of existing transmission assets in North and South Wales, as opposed to building new assets elsewhere.
Delivering on this promise will require joined up efforts from UK and Welsh Government bodies to de-risk project development and strategically target investment that can both enable further cost reduction whilst maximising economic benefits to local businesses and communities in Wales. One thing is for certain, with The Crown Estate’s leasing round starting gun set to go off in 2019, it is clear that Wales is back in the race.
Rhodri James is a Manager at The Carbon Trust and author of a new report for the Welsh Government on the future potential for offshore wind in Wales, available on the Welsh Government website