The government’s recently published Powering up Britain plan sets out an ambitious strategy to accelerate the development of offshore wind in order to help achieve the UK’s net zero targets.
Floating offshore wind (FLOW), which can harness the wind power potential of the open seas with less disruption to ecosystems, has been positioned as the ‘next frontier’ for offshore wind. 
It may also offer opportunities for companies in the South West to become involved in the supply chain for these next generation projects.
The Crown Estate Scotland awarded a record-breaking 17GW of FLOW projects following the ScotWind offshore wind leasing round, out of nearly 30GW of the total awarded capacity.
The Celtic Sea programme
The Crown Estate is now delivering a new leasing opportunity in the Celtic Sea, under which it will award up to 4GW of FLOW capacity to successful bidders for deployment between 2030 and 2035. The leasing round is designed to advance the commercialisation of the FLOW technology even faster.
Unlike previous offshore wind leasing rounds, the Crown Estate will accelerate the Plan Level Habitat Regulation Assessment (HRA) process, which is expected to be completed before the tender launch. Clearing this hurdle at the beginning of the process will increase efficiency and reduce the risks for developers and investors.
In addition, successful projects will be allowed to be developed in a phased ‘stepping stone’ approach, intended to provide opportunities for growth and investment and to facilitate the co-ordination of supporting infrastructure, such as ports and grid connections.
Preparing for success
Prudent participants in the Celtic Sea programme will pay close attention to:
- Preparation of a well-considered Supply Chain Investment Plan (SCIP) – building regional supply chains that will create economic and social value is one of the key aims of the leasing round. The key word here for South West companies is that these plans are regional. While SCIPs may not be included in the scoring criteria they are still expected to play a key role in assessing bidders’ ability to deliver their projects, as in the Scotwind Round. Failure to meet SCIP commitments may amount to a contractual breach of the lease.
- Enabling Infrastructure – some analysts suggest that ambitious FLOW plans are at risk of inadequate support from enabling infrastructure. Existing ports may not yet have the capacity to accommodate the record-height floating turbines, nor the fleets of vessels required for their construction and maintenance. In addition, finalised plans for key grid infrastructure are still absent from the Holistic Network Design plans.
- Contracts for Difference (CfDs) – the current design of the CfDs mechanism may pose further challenges for developers. For example, regional supply chain development is undermined by the lack of alignment of requirements in CfDs and SCIPs. Moreover, strike prices do not necessarily reflect increased costs due to the current financial crisis threatening the financial viability of projects.
- Planning process – understaffed authorities and new requirements on biodiversity net gain will add extra complexity to project development.
Looking forward
Despite the challenges, the Celtic Sea Round remains an exciting opportunity to make the UK the world leader in FLOW technology and for companies in the South West to become involved in these projects.
Womble Bond Dickinson’s energy team is part of the Celtic Sea, Solent and Scottish Clusters. We have been advising on clean energy projects for three decades and been heavily involved in the UK’s Round 4 and Scotwind leasing rounds. We have supported clients on offshore wind projects totalling 14GW, accounting for 26% of the UK’s current net zero target.
If you are an offshore wind project developer and would like to discuss the issues raised by the above, please get in touch with Womble Bond Dickinson energy partner Chris Towner (chris.towner@wbd-uk.com).
