New UK Offshore Wind Developments Creating Opportunities

Energi Coast, the North East of England’s offshore wind cluster, has welcomed the government’s announcement that six UK offshore wind projects have won Contracts for Difference (CfD), which will create new opportunities for the region’s established and diverse supply chain.

The offshore wind developments are included within a dozen renewable energy projects awarded CfDs, which, combined, will power more than seven million UK homes at record low prices. The announcement of the CfD’s confirm the go-ahead for these planned Round 3 offshore wind developments.

Among them are two projects located off the North East of England Coast, Sofia, to be developed by Innogy Renewables UK and Dogger Bank, which contains three offshore wind farms that will be developed by a partnership between Equinor and SSE.

The developments have all secured a strike price of £39.65, which a guaranteed price per Megawatt hour (MWh) to be paid to wholesale generators of electricity, which is 30 percent lower than the second auction in 2017.

North East England’s offshore wind cluster is well-placed to support these developments. The cluster’s supply chain has evolved through the development of innovative and game changing products and services, which have been applied to the majority of the world’s offshore wind farm developments.

As a result, the Energi Coast cluster has matured to deliver the majority of what is required for an offshore wind farm, both at design, construction, installation and operations & maintenance phase. This expertise ranges from foundations, cables, installation, ports and logistics, training and specialist subsea services.

The CfD scheme is the government’s primary method of supporting low-carbon electricity. It encourages investment in renewables by providing projects with a stable income while protecting consumers from paying increased support costs when electricity prices are high.

James Ritchie, Chair of Energi Coast and CEO at Tekmar Group plc, said: “This is a significant step forward to the UK offshore wind industry, which presents tangible opportunities for North East England’s cluster of supply chain companies that have the experience and expertise to support their delivery and operation.

“We do not underestimate the challenges this price reduction will create, but I am confident our cluster will be cost-competitive to support the delivery of these projects and we hope developers will recognize the benefit of using a proven, local supply chain.

“The innovation that companies from our cluster have brought to the industry will enable these developers to deliver sustainable offshore wind generation and ensure the sector can play its role in decarbonizing the UK energy system.”

Originally set up in 2011, the group has recently been reconstituted to embrace wider stakeholder involvement and to show support for the Offshore Wind Sector Deal signed in March 2019.

Made up of more than 30 key regional businesses and stakeholder organizations involved in offshore wind, the group works to:

• Showcase the vast offshore wind supply chain capabilities within North East England
• Promote the region as a key hub for servicing both the UK and International offshore wind markets
• Demonstrate the collaborative approach being taken by the regional offshore wind supply chain to bring innovation and technology to projects
• Showcase North East England's excellent infrastructure and logistics capabilities enabling it to become an operational hub for the offshore wind sector
• Highlight the benefits of investing in North East England by key offshore wind clients to further strengthen the regional offering and make best use of local supply chain expertise.
• Support the themes arising from the offshore wind sector deal announced in early 2019
• Support the Offshore Wind Growth Partnership to ensure regional supply chain tap into programs available to help grow their businesses in the sector

The cluster is made up of Developers, Ports, Supply Chain, Skills & Academia, Innovation & Research Organizations and the two Local Enterprise Partnerships. NOF is the service provider to Energi Coast.

The cluster has an Industry Group and a Cluster Management Group. To be part of the cluster, companies and organizations need to meet certain criteria.

Each Energi Coast participant acts as a regional offshore wind Ambassador and is committed to ensuring the cluster has a strong voice to represent the supply chain and this vibrant industry which has huge economic benefit for North East England.

Energi Coast also has a role to represent the wider offshore wind supply chain based in North East England and this is done through an active marketing campaign.

There are eight offshore wind clusters throughout the UK, Energi Coast is the one which represents North East England.