Not enough commercial lessons have been learned – or shared – by the UK wind-ustry over the past 10 years to achieve manufacturing economies of scale and/or to reduce production, installation and maintenance costs.
That is the blunt ‘report-card’ for the offshore wind industry – which has grown from some 50 turbines in 2014 to more than 1,100 today – by the TÜV SÜD PMSS wind consultancy, a trusted advisor to some of the most influential renewable energy businesses and institutions.
Consenting organisations in the UK have a formidable track record, but equally formidable are the challenges facing them as the largest offshore wind pipeline in the world gets delivered amidst substantial austerity measures and mixed messages from central government.
This is further exacerbated by the demands of significant regulatory and organisational reform, a widening skills gap, funding shortfalls and a lack of knowledge sharing opportunities.
Simultaneously, failure to build offshore wind projects at a sufficiently large scale over the short term will prevent the industry delivering on its cost-reduction commitments. If costs do not fall, future Government commitments to support the market will not materialize, the report warns.
Achieving cost reduction requires innovation in technology and investment, but neither of these will come to fruition if projects are not consented.
The overall cost per MW of meeting consent conditions for offshore wind projects has remained static over the past decade, which, while an indication that changing regulatory and legislative regimes have not significantly increased the financial burden of navigating the process, demonstrates that lessons learnt on previous projects have not translated into the expected savings in the long-term.
And Dr Steve Freeman, Director of Environment at TÜV SÜD PMSS, and principal author of the reports, added: “There is a clear challenge facing the consenting of large-scale Round 3 UK wind projects.
“This is not a reflection on the abilities of the regulator, more that they face a perfect storm of issues, sometimes beyond their control, that conspire to force their hands to become more conservative in the consenting process.”
“In such circumstances, the need for having an efficient and appropriately funded consenting system that takes due care of both environmental and developer concerns becomes very clear.”
“As the industry has expanded, the cost profile of meeting consent conditions has changed, but in such a way that developers are not experiencing the cost savings and achieving the economies of scale that they would hope as their projects increase in size.”
“The industry urgently needs to reach a point where it can start putting into practice lessons learnt from over a decade of development – but this simply isn’t possible while the consenting goalposts continue to be shifted.
“Developers and regulators often have difficulty understanding each other’s perspectives. And in order to break the impasse, there needs to be a greater focus on knowledge sharing and inter-organisational coordination.”
However, one of the trade associations, London-based Renewables UK, said that consenting costs have increased significantly in recent years for offshore wind developers. It said that between Round 1 and Round 2 of offshore wind development, average consenting costs went up 15% for each megawatt consented. The average cost of consenting each MW of Round 1 schemes was just over £15,000 but for Round 2 was more than £17,000.