On March 10th, Maritime UK launched a landmark Offshore Wind Plan which puts forward a strategy for realising the UK’s offshore wind potential in the decades to come.
As explained, the Offshore Wind Plan puts forward a strategy for realising the UK’s offshore wind potential in the decades to come.
In the plan, the industry makes various calls on government that will help propel industry growth, with asks such as:
- Ensure UK shipbuilders benefit as much as possible, with procurement rules maximising opportunities for British yards to build the vessels used to service offshore windfarms.
- Revise tax incentives and campaign to ‘build British’ to boost coastal economies and job creation.
- Get UK seafarers unemployed by the pandemic back into work in offshore wind, following concern that Brexit and the phasing out of visa waivers will mean the 100,000 jobs forecasted by 2030 won’t be filled – due to shrinking levels of overseas talent.
The Offshore Wind Plan makes a series of recommendations for how the maritime sector, the offshore wind sector, and governments can work together to deliver maximum economic benefit from the growth of offshore wind across the maritime supply chain in sectors like ports, shipbuilding, crewing and professional services.
In the released report, Maritime UK recommends the following actions to capitalise on opportunities presented the maritime sector by the growth of offshore wind:
People and Skills
Government Asks
- Develop and maintain well-defined pathways towards employment opportunities in the maritime and offshore wind sectors for young people aged 16-24, as well as existing UK-resident seafarers who lost their jobs as a result of the COVID-19 pandemic.
- Ensure that trade unions and employers have a voice in the Investment in Talent Group tasked with identifying skills needs and developing the curricula and accreditation necessary to broaden and deepen the sector’s skills base.
Industry Offers
- Commit to developing and utilising locally resourced workforces and UK-resident seafarers.
Manufacturing and Technology
Government Asks
- Encourage procurement bodies to give higher weighting in the tendering process to projects opting to meet the UK content target in the Offshore Wind Sector Deal.
- Adjust the Maritime Capital Asset depreciation to reflect the technical lifetime of vessels, rather than the economic lifetime to create a more level playing field for manufacturers and incentivise purchasing of UK-made equipment.
- Introduce a suite of financial instruments similar to that available through UKExport Finance for the offshore wind market to create a more level playing field for UK maritime manufacturers also involved in the sector to compete with overseas competitors.
- Provide grants for infrastructure and production facility investment for offshore wind related projects, following the model set by the Floating Offshore Wind Manufacturing Investment Scheme (FLOWMIS).
Industry Offers
- Coordinate efforts to promote UK-manufactured equipment for the UK offshore wind sector more widely such as the £215 million ‘Economic Recovery through Advanced Manufacturing’ proposals developed by the University of Strathclyde.
Shipbuilding
Government Asks
- Reform the methodology for calculating UK content in ship construction, operation, management, and crewing, as it currently underrepresents UK value for existing operators.
- Invest in and implement the outcomes of the Clean Maritime Demonstration Competition (CMDC) for government vessels.
- Revise tax incentives and campaign to ‘build British’, subject to an appraisal of the current UK shipbuilding capacity.
- Give higher weighting to low carbon footprint supply chains, which will make green and alternative fuels a competitive advantage.
Industry Offers
- Promote career opportunities and training related to shipbuilding and demonstrate the need for skills in the sector.
- Promote commercial opportunities within the UK maritime sector to help attract domestic as well as international investment.
- Invest for the long term in advanced production techniques and skills with greater certainty in future order books and government support.
Offshore Vessels
Government Asks
- Reform the CfD process to reward sustainability and decarbonisation of the UK maritime supply chain involved in the offshore wind sector. This would include Tier 3 emissions, with a particular focus on CapEx costs such as vessels and correspondingly higher OpEx for UK presence, as well as encouraging long-term collaboration and chartering of vessels where possible.
- Design features within the CfD process such as the Supply Chain Plan and Supply Chain Questionnaire to yield information about the UK presence in the
vessel operation and management in offshore wind farms, as this is likely to be underreported. - Introduce initiatives for financing the decarbonisation of the offshore vessel fleet.
- Recognise that vessels should be treated as national infrastructure, rather than being included in a blanket application of the UK ETS.
Industry Offers
Increase collaboration between offshore energy companies and vessel operators. With the added contracting complexities presented by the work packages model and the subsequent lack of transparency this creates, there are a couple of things that need to fall into place to properly enable this kind of collaboration:
- Financial drivers need to be in place for developers and energy companies to invest in decarbonising high CapEx assets;
- Resources must be pooled into a fund that can be used for the purpose of lowering or eliminating greenhouse gas (GHG) emissions from vessels, and with
some potential government financial support; - Support the emerging collaboration with the long-term chartering of vessels to enable a return of investment, and to remove elements of financial speculation and associated risks.
Ports and Port Infrastructure
Government Asks
- Promote changes in procurement rules to reward developers who propose to deliver offshore wind farms with high levels of UK content, thereby maximising the value in using UK content in offshore wind.
- Give more force to Supply Chain Plans through additional non-delivery disincentive mechanisms such as a fining regime or a mechanism to claw back public money.
- Create a dedicated roadmap setting out the range of offshore renewable energy technologies and associated opportunities to ensure that the UK develops a robust supply chain. Maximise the benefits of floating offshore wind by:
1. increasing its allocation within CfD auctions, which currently stands at 5GW by 2030;
2. ensuring that the UK’s capacity is strategically spread across different clusters, reflecting the geographical scope of the UK opportunity;
3. promoting a greater percentage of local content, driven by low carbon targets, as the offshore wind sector develops;
4. encouraging Tier 1 manufacturers to procure or locate their supply chains in the UK. - Rethink government support to future proof a broader range of locations to bridge the gap between commercial business case timeframes and the multidecade timeline of government goals.
- Outline a planning framework for streamlined decision-making to allow ports to develop estate necessary to meet demands imposed by the
transition to net zero quickly.
Industry Offers
- Endeavour to meet the ambitions on the level of UK content set out in the Offshore Wind Sector Deal.
Marine Spatial Planning and Coexistence
Government Asks
- Require seabed lessors to undertake an extensive analysis of current activity and engagement with industry stakeholders prior to permitting
Agreements for Lease (AfLs) with developers for specific sites in order to minimise conflict. - Provide full funding and resources for the Offshore Wind Evidence & Change (OWEC) programme to undertake the holistic research into navigational safety so necessary.
- Safeguard future port expansion and necessary navigational access.
- Require the full removal of infrastructure from the seabed as part of the decommissioning plan to future proof the seabed for future opportunities.
Industry Offers
- Fully commit to engage with seabed lessors and other stakeholders throughout the planning and consenting process for offshore wind farms.
- Provide industry expertise and feedback into the development of purposeful holistic plans that can maximise offshore wind farm development and safety/efficiency of navigation.
- Put forward solutions to co-location and coexistence enshrining navigational safety
Professional and Business Services
Government asks
- Encourage UK lenders and institutional investors to diversify their portfolios by investing in offshore wind, leading to the latter playing a more significant role in the future financing of UK offshore wind farms and initiatives to increase the use of UK content in the supply chain.
- Require, through the Crown Estate seabed leases or CfDs, that UK wind farm related disputes are resolved in the UK and that wind farm development contracts make provision for the use of dispute boards and/or ENE in the same way that international development banks increasingly require them to.
Industry action
- Assist by continuing to build awareness of the success of offshore wind, growing the supply chain and highlighting the opportunities that exist for lenders and investors going forward. Investor appetite is present in the market and finance can be provided by industry, if suitable revenue support schemes underpin this.
- Urge the offshore wind sector to embrace the range of legal and dispute resolution mechanisms, such as ad hoc arbitration and ENE, that are a jewel in the crown of the UK maritime professional services cluster.
Rt Hon Graham Stuart MP, Minister of State in the new Department for Energy Security and Net Zero backed Maritime UK’s Offshore Wind Plan, stated that the offshore wind industry is a major UK success story, with the largest operational fleet in Europe, the world’s four biggest individual windfarms and the highest ambition of energy produced by 2030.
Our ports, such as Grimsby – the world’s largest offshore wind Operations and Maintenance port – demonstrate how offshore wind can catalyse investment and high quality job growth, an impact that should be hugely boosted by the new generations of floating offshore wind.
…said Andy Reay, Head of Offshore Wind for Associated British Ports
