The National Renewables Infrastructure Plan – published by Highlands and Islands Enterprise and Scottish Enterprise – identifies a number of key sites identified for investment which could play a key role in the expanding offshore renewables market, as CALUM DAVIDSON, Director of Energy at Highlands Enterprise, explains:
What does the national renewables infrastructure plan set out to do?
The report was developed in response to a key need identified by the Energy Advisory Board, chaired by First Minister, to understand the true potential for Scotland to play a major role in the expanding offshore renewables market.
It comes at a very exciting time for the offshore renewables sector and at HIE we see the huge long term economic benefits for the coastal communities across the region, from Shetland to Kintyre and the Outer Hebrides to Moray.
Port infrastructure, which includes deep water, suitable quayside, craneage, and sizeable laydown areas, is seen as key to unlocking the potential to the offshore renewables sector, and acting as the catalyst for developing the renewable energy supply chain.
Which sites does the report focus on?
The plan covers 11 sites in Scotland that have been identified as offering the greatest potential for being involved in offshore wind manufacturing . Five of these are in the Highlands area – Campbeltown, Kishorn, Arnish, Nigg and Ardersier.
This latest report recommends that the Scottish sites are developed into three regional manufacturing clusters that would support the fabrication of offshore wind components and tap into Scotland’s existing wealth of subsea expertise. The report demonstrates that there is market interest in these sites and we will be working closely with the site owners to attract offshore wind supply chain companies to use the site and therefore realise its potential.
Although still too early to say what this will mean for individual site owners, we know that over the next two years, supply chain companies will be making decisions about locations so it really is all to play for.
Why are these sites looked at in terms of ‘regional clusters’?
Intelligence from Scottish Development International and from industry feedback has shown that the region’s offering to an offshore wind developer can be increased by a number of the sites working together as clusters of complementary specialist providers.
The report highlights three areas where there is currently a growing market interest. In these three areas, clusters of ports can offer complementary sites for companies in the supply chain. In order to be able to meet immediate market demand, we need to ensure investment is prioritised in these three areas initially.
These clusters would support the fabrication of offshore wind machinery and tap into the wealth of subsea expertise that already exists in Aberdeen and Peterhead.
Which areas are currently attracting most development interest?
All 11 sites have had some interest from developers, although currently the strongest market interest is in the Forth and Tay cluster area, where Dundee, Leith and Methil are all considered prime locations, and Nigg in the Moray Firth. There is also steadily growing interest in the West Coast.
Nigg is one of the key fabrication sites for Scotland and it stands to play a strong part in supporting both the renewables and oil and gas sectors.
With Arnish and Campbeltown/Machrihanish being used by BiFab and Wind Towers Ltd respectively, the West Coast already has some key players in the offshore wind market.
Working with the Highlands and Islands ports, the challenge will be to attract local and new inward investment into these areas to support current and planned activities at these sites.
What will the investment be used for?
Investment in the renewables infrastructure sites can be broken down into three categories.
‘Enabling’ infrastructure might include upgrading quaysides, improving water depth, land remediation, site clearance, site access and upgrading utilities.
Then there is the requirement for manufacturing facilities. Although some sites have existing fabrication sheds, we expect most will need new facilities to meet specialist requirements of businesses such as wind turbine manufacturers.
Possible needs for more bespoke equipment and facilities will depend on each site and what it will be used for but could relate, for instance, to craneage and other specialist equipment.
Where will the investment come from?
A range of potential funding sources have been identified within the report. We expect the majority of funding to come from the private sector and our priority is to work with individual port owners in raising the necessary investment for projects to go ahead in time to meet demand.
Depending on the project, we’ll consider a number of different public sector funding options using existing methods of support. For instance, co-investment funds for equity investment or Regional Selective Assistance (RSA) funding may be appropriate, as may be joint venture or direct investment routes.
What about public sector investment?
Some level of public sector support may be required for the commercial sector to respond quickly to immediate opportunities. Any public sector investment will have to be prioritised in line with where there is strongest market demand.
We have seen some successful examples during 2010 and 2011, with HIE providing significant investment in Machrihanish, Arnish and Nigg.
Meanwhile, BiFAB received £2m of RSA and £4m commercial loan from Scottish Enterprise to help finance its new production facility at Methil. This helped the company form a partnership with Scottish and Southern Energy, who purchased a 15% stake in the company in return for an agreement to produce 50 turbine jackets a year.
What happens to sites not included in the report’s ‘three clusters’?
The investment route included in the report is open to any other port authority in Scotland that can demonstrate strong market interest in their site. The report outlines a clear route and process for how port authorities can access investment.
What types of manufacturing are expected?
The manufacture of sub-structures, towers, nacelles, blades, monopiles and components will all be needed for the offshore wind industry. For instance, Scotland currently manufactures sub-structures at Methil and towers at Macrihanish.
How many jobs will this bring?
The report quotes the figure of 5,180 jobs and around half of these could be in the Highlands and Islands region.