Offshore Renewables in the UK:

Funding and developing offshore wind projects

Nick Medic

Director of Offshore Renewables, RenewableUK

March 2014

RenewableUK: key roles

“The voice of wind and marine energy”

founded in 1978 as the British Wind Energy Association

Roles:

industry forum

representative body

media resource

public campaign

Offshore Renewables Team:

Nick Medic, Director of Offshore Renewables

Dee Nunn, Wave and Tidal Development Manager

Filippo Locatelli, Offshore Wind Development Manager

Clare Daly, Offshore Wind Relations Manager

Structure of today’s presentation

Funding offshore wind projects:

Historical perspective and key statistics

Project funding and future challenges

Development of offshore to 2020 and beyond

Supply chain and socio-economic markers

Role of statutory nature conservation bodies

Presentation running time: 25 - 30 minutes (approx.)

Offshore renewables in UK: key past trends

Growth in UK Deployment

March 2004: 32 turbines deployed

March 2008: 149 turbines deployed

March 2014: 1075 turbines deployed

Over the last 6 years a turbine went

up in UK waters on average every 48

hours!

UK offshore scorecard: summary

Current offshore wind status:

Number of turbines: 1,075

Installed capacity: 3,653 MW

No. of wind farms built: 22

In construction / planning approval: 12

Contribution to UK electricity supply: 4%

More info: UKWED

at renewableuk.com

Development : Round 1 & Round 2

Round 1

Announced: April 2001

Average site: 90 MW

Distance: Near shore

Water depths: up to 15 m

Round 2

Announced: December 2003

Average site: 400 MW

Distance: approx 15 km

Water depths: 5 m to 30 m

Round 3: a full 30% of UK’s electricity

Round 3

• Announced January 2010

• Zones instead of wind farms

• Total capacity: 32,000 GW

• Contribution: 30% of UK supply

• Distance: 150+ km

• Surface: 27,000 km2

• Construction start: 2015

• Estimated turbines: 6,000

Two Rounds in: UK leads the sector

UK position: future trends

In the UK:

Within 5 years

10% of UK net electricity

By 2023

10GW+ deployed

By 2030

Chief renewable technology

on the grid

A global industry:

Financing offshore wind: policy measures

Due to cost offshore wind developed under three financial

support mechanism:

Non-fossil Fuel Obligation: now phased out

Renewable Obligation: phased out in 2017, grandfathered until 2037

Contracts for Difference: inaugurated by Energy Act 2013, coming

into force in 2014

Source: EWEA, 2013

Renewable Obligation key elements:

Renewable Obligation Certificates

unconstrained development

RO demand ahead of supply

renewable energy specific

Conclusion: very successful,

but more needed on

value to consumer

return on investment

other technologies.

RO vs CfD: compare and contrast

£7.6 billion spending cap

contracts for difference

allocations/auctions

RO vs CfD: compare and contrast

£7.6 bn

Key elements of new system:

UK offshore wind: the investors

Offshore wind: deployment trends

Project Timelines: Quantifies

Industry appetite

Offshore: Potential for jobs growth

Growth in

Employment

2008: first survey of

employment in the wind

energy sector (Bain & Co.)

Total: 700 offshore wind

2013: follow on survey

(Cambridge Econometrics)

Total: 6,830 offshore wind

Future employment: trends

Consenting process: key to sector success

Offshore consenting policy

overseen by the Consents and

Licensing Group (C&LG)

Two focus areas:

Fit-for-purpose legislation

Operational readiness

Aim: ‘A robust and efficient

offshore consenting system’

Consenting offshore: current projects

Consenting Preparedness for Round 3:

Project commissioned by RenewableUK, carried out by consultants

PMSS is looking at challenges and resource requirements of Round 3.

Coping Strategy:

Understanding and accelerating solutions for strategic issues associated

with Round 3 development – through collaboration.

Thank you

Questions?

Nick Medic, Director of Offshore Renewables

nick.medic@renewableuk.com