Offshore Wind Farm Plans Could Bring Huge Opportunities to Wales; Yesterday the Government Announced the Winners of Leases to Develop Nine Offshore Wind Farm Sites. Chris Kelsey Assesses What the Development Could Mean for Wales
Byline: Chris Kelsey
IT would be difficult to overstate the importance of the Crown Estate's announcement of the consortia selected to develop the next round of offshore wind sites.
The third round in the process of leasing sites on the seabed around the UK to wind farm development represents a real step change for Britain's renewable energy sector.
The offshore wind farms already operational in UK waters account for almost half the world's 1,500 megawatts (MW) of offshore wind capacity (688MW).
The nine zones selected for development under Round 3 will add 25 gigawatts (GW) to that.
Add to that a further 7.2MW under development or in planning, and additional sites projected in Scottish territorial waters, and the UK's total offshore wind capacity could reach around 40GW.
Compare this to the UK's current average demand for electricity of 44GW and overall generation capacity of 80GW and you can see how significant a development it is.
Britain's offshore wind industry is already the largest in the world. This level of growth will ensure that it continues to attract the lion's share of investment in offshore wind.
The British Wind Energy Association estimates that offshore wind could attract around pounds 120bn of private sector investment. A significant proportion of that must inevitably come Wales' way.
Two of the development sites to be leased under Round 3 lie off the coast of Wales.
The 1.5GW Bristol Channel site, to be called the Atlantic Array and developed by RWE Npower Renewables, a subsidiary of RWE Inogy, lies about midway between the Welsh and English sides of the channel and stretches from a point south of Swansea Bay to one approximately south of Saddle Head in Pembrokeshire.
The 4.2GW Irish Sea zone, to be developed by a consortium led by Centrica Renewable Energy and involving RES Group, occupies a paintbrush shaped area of seabed halfway between Anglesey and the Isle of Man.
Between them they account for more than a fifth of the 25GW capacity of the nine Round 3 zones.
Because offshore wind currently accounts for just 1% of installed wind farm capacity around the world, there has so far been little incentive for suppliers to invest in offshore manufacturing capacity, according to the BWEA.
But with Round 3 alone representing a 16-fold increase in that capacity, all that is about to change.
That could have a significant benefit for the industry, and for consumers, because a shortage of competition in the supply of turbines - the market is currently dominated by two manufacturers - means the cost of installed capacity has doubled, from pounds 1.5m per MW for the early Round 1 projects at the beginning of the last decade to pounds 3.1m today.
The BWEA expects another four turbine manufacturers to enter the market by 2015, when construction of the Round 3 sites should be under way after planning consents, grid connections and final investment decisions have been completed.
Turbine supply is dominated by continental European manufacturers, but the rapid expansion in demand unleashed by the Round 3 projects could give an opportunity for a British manufacturer to enter the field. Even if the continental firms continue to dominate, they may decide to locate manufacturing plants close to the ports that will service the offshore construction sites.
Besides turbines, there are opportunities for construction of installation and service vessels, cables to link the wind farms to the shore, and components such as gearboxes, bearings, and castings. …