Scotland's sweeping green energy ambitions

Scotland's sweeping green energy ambitions

By Scottish European Green Energy Centre (SEGEC)

If it is up to the Scottish government, the waters around Scotland will become the green energy powerhouse of Europe. The country has formulated highly ambitious renewable energy targets. These will have to be met by an offshore wind power revolution in the rough Scottish waters. The Scottish Green European Energy Centre gives an overview of the plans.

In May, the Scottish National Party (SNP) was re-elected to the government with a landslide victory, becoming the first party to form a majority government in the Scottish Parliament since its resumption in 1999. Along with other plans, the new Government announced an increased renewable energy target: it wants Scotland to generate the equivalent of 100% of its electricity consumption from renewables by 2020. Since Scotland also aims to export as much electricity as it consumes, in practice this would mean that 50% of the electricity production should come from renewables less than a decade from now.

In 2009, Scotland already generated 27.4% of its consumption from renewables. Over half of this was hydropower (12.4%), most of the rest wind and wave power (11.6%). This means roughly a four-fold increase is needed in renewable energy production. As hydropower does not have much growth potential, this will have to come almost entirely from wind power.

Blue Seas

There is little doubt that Scottish wind power resources are, in theory, large enough to meet this demand. Scotland has an estimated 206 GW (206,000 MW) of practical offshore wind, wave and tidal resources, of which 169 GW (169,000 MW) is offshore wind. This is almost 40% of the total UK resource and 25% of Europe’s offshore wind resource. It is estimated that harnessing just a third of this practical resource off Scotland’s coast by 2050 would be enough to power Scotland 7 times over.

It is estimated that harnessing just a third of this practical resource off Scotland’s coast by 2050 would be enough to power Scotland 7 times over

For the time being, however, Scottish ambitions are a bit more moderate. In its March 2011 plan Blue Seas - Green Energy (A Sectoral Marine Plan for Offshore Wind Energy in Scottish Territorial Waters), the government identified six areas for development of offshore wind up to 2020, with a potential to deliver almost 5,000 MW of electricity generation capacity. It also identified 25 additional areas for further exploration beyond 2020. The plan did not include specific targets.

To be sure, there is still a long way to go before even the 5,000 MW mark will be reached. Currently only the 180 MW Robin Rigg offshore wind farm in Solway Firth has been realised (by Eon) in Scottish waters, plus the 10 MW Beatrice offshore wind demonstrator facility. By contrast, some 2765 MW of wind power has been installed onshore in Scotland.

Exclusivity

But if all if all goes according to plan, Scotland’s wind power capacity will grow rapidly in the coming years. Over its previous four-year term, the Scottish Government granted planning permission for 42 large-scale onshore and offshore wind projects totalling over 2000 MW in capacity. Exclusivity agreements (which give developers security over their chosen sites and allow them to commence with site survey works etcetera, and is the step before an Agreement for Lease is granted) have been awarded to these offshore sites in the Scottish territorial waters:

Wind farm	Estimated MW	Developer
Argyll Array http://www.argyllarray.com/	1500	Scottish Power Renewables
Beatrice http://www.sse-beatrice.com/	920	SSE & SeaEnergy
Inch Cape http://www.inchcapewind.com/	905	SeaEnergy
Islay http://www.sse.com/islay/	680	SSE
Neart na Gaoithe http://www.neartnagaoithe.com/	360	Mainstream

Source: Renewables UK.

In addition 2 offshore wind demonstration sites have been awarded Exclusivity Agreements: the European Offshore Wind Deployment Centre (EOWDC) and Methil Offshore Wind Farm (also known as 2B Energy Prototype).

Two other planned projects in Scottish waters are the 3500 MW Firth of Forth project of Seagreen Wind Energy, a 50/50 joint venture between SSE and Fluor Ltd) and the 1300-1500 MW Moray Firth, a partnership between EDPR (67%) and Spanish company Repsol (33%). These two projects are both part of the Round 3 Leasing Programme of the Crown Estate. This means they are UK projects rather than exclusively Scottish projects.

In August, First Minister Alex Salmond said that there are now eight developments being planned in Scottish waters (including Firth of Forth and Moray Firth) that will deliver up to 10 GW of energy from offshore wind by 2020. This would be enough, Salmond said, to reach the target of 100% of electricity demand from renewables.

Supply chain

The Scottish government sees a unique economic opportunity in the development of offshore wind power. It has said that the sector could bring an estimated £30 billion of inward investment into Scotland. The industry could support up to 28,000 directly related jobs and a further 20,000 indirect jobs in Scotland, generating up to £7.1 billion for the Scottish economy by 2020.

Not only does Scotland have large wind resources, it also boasts the presence of an established (offshore) oil and gas supply chain. This gives the country a competitive advantage in areas such as project design, deployment, operations and maintenance of offshore installations. For the oil and gas industry itseslf, the development of the offshore wind power sector represents an opportunity to diversify into a globally rapidly expanding sector.

Offshore wind power is still a relatively expensive form of energy production. This means government support will be essential to develop the industry. Currently, investment is stimulated with the Renewables Obligation mechanism. Projects receive 2 Renewable Obligation Certificates (ROCs) per MWh once they start producing electricity. An ROC is currently worth about £38 (€43), so this amounts to £76 (€86) per MWh. Some projects also got some additional capital support from the UK Department of Energy & Climate Change (DECC).

For the oil and gas industry, the development of the offshore wind power sector represents an opportunity to diversify into a globally rapidly expanding sector

New projects will also receive 2 ROC’s per MWh for the foreseeable future. In the longer term, however, the aim is for offshore wind power to become competitive with other forms of power generation. With costs of building an offshore wind farm estimated to be between £140-170 per MWh, this will need to be reduced to around £100 per MWh to make projects viable. There are a number of initiatives that have been set up to look at this critical issue, including the recent establishment of a Task Force by the UK Department of Energy & Climate Change (DECC), which will be working with industry, the devolved administrations and The Crown Estate in order to set out a path and action plan for reducing the costs of offshore wind. The Task Force’s task is to drive the work necessary to realise the vision of reaching £100/MWh for offshore wind.

Technological developments will also drive down costs therefore increasing the level of RD&D will be critical to delivering cost reduction. It is here where Scotland is rapidly emerging as an important centre with a total of £300 million of inward investment from companies like Doosan, Gamesa and Mitsubishi, which are locating to Scotland to develop their offshore wind interests.

The Scottish government also delivers infrastructural support. Stage 1 of the National Renewables Infrastructure Plan (N-RIP) identified the priority sites for ports and harbours developments to support the growth of the offshore wind sector. Stage 2 (published in July 2010) sets out the investment requirements to fully develop first phase sites. It highlighted that £223 million investment in key port and land-side infrastructure could support an offshore wind sector manufacturing 750 offshore wind units per year. £70 million from the National Renewables Infrastructure Fund (N-RIF) has now been made available to strengthen ports and manufacturing facilities for offshore wind turbines and related components and leverage private sector investment.

Forefront

Scotland is also looking to the EU to help finance its offshore wind ambitions. In 2009, the Scottish European Green Energy Centre (SEGEC) was established by the Scottish Government and private partners to seek access to EU funding for low-carbon infrastructure demonstration and deployment projects. To date SEGEC has delivered over €115M of EEPR funding for demonstration projects (the aforementioned EOWDC and the Moray Firth Offshore HVDC hub), supported two Scottish marine energy bids for NER300 funding (bid total of €99M for total project values of €323M), identified and delivered TEN-E, IEE and INTERREG bids. It has also facilitated funding for a CCS (carbon capture and storage) Regulatory Toolkit and a Scottish-Norwegian grid interconnection project.

The two Marine energy bids for the NER300 funding are a €78M bid application for the Pentland Orkney Wave power Resource (POWER) Ltd which has a project value of €228M and the Islay Tidal Project bid application of €21M with a total project value of €95M. If successfully developed, these projects, and more, will keep Scotland positioned at the forefront of delivering the green energy agenda.

A sample of Scotland’s existing renewable energy projects Whitelee Onshore Windfarm – Operated by ScottishPower Renewables, Europe’s largest onshore windfarm has 140 turbines which can generate 322MW of electricity, enough to power 180,000 homes. The Beatrice Wind Demonstrator Project in the Moray Firth is the world’s first deep water offshore development. At a cost of €41M, it has two 5MW wind turbines installed adjacent to the Beatrice oil field, 25km off of the east coast of Scotland. Plans for the demonstrator were led by Talisman Energy (UK) Limited and Scottish and Southern Energy (SSE) Robin Rigg is E.ON’s third fully commissioned 180MW offshore wind farm in the Solway Firth. It is the first commercial offshore wind farm in Scottish waters. The 60 turbine site began full generation in April 2010 and should provide enough electricity to power approximately 117,000 homes and offset around 230,000 tonnes of CO² emissions. European Marine Energy Centre (EMEC) on Orkney is the world’s only accredited testing centre facility offering developers unrivalled wave and tidal conditions in which to test full scale grid connected wave and tidal energy prototype devices. There are currently 5 devices deployed and operating at EMEC with a total capacity of 2.7 MW. A further 5 are due to be grid connected by the end of 2011, initially with 4.3 MW capacity, increasing to 5.9 MW after 12 months. EMEC is also signing a strategic agreement with the FORCE tidal test facility at Fundy in Nova Scotia. This will help unlock as much as £6 billion of investment, highlighted in a technical report published recently, to deliver the world's only commercially-leased wave and tidal projects in the Pentland Firth and Orkney waters. Saltire Prize: The Scottish Government is promoting global innovation in wave and tidal power generation with the £10 million Saltire Prize marine energy challenge. The competition has attracted more than 150 registrations of interest from 31 countries.

Renewable energy projects on the horizon European Offshore Wind Deployment Centre (EOWDC) - €40M of EEPR funding was secured with the help of SEGEC for this project, to be located off Aberdeen, which will have a project total of around €200M. Collaborative project with partners of Vattenfall, Technip and Aberdeen Renewable Energy Group (AREG). http://www.vattenfall.co.uk/en/aberdeen-bay.htm NorthConnect Interconnector project - A routing study for an interconnector between Norway and GB. With a landfall option in North East Scotland such a link has the potential to form part of a future offshore grid. The project is a collaboration between the European energy companies Agder Energi, E-CO, Lyse, SSE (Scottish and Southern Energy), and Vattenfall AB. This will be the first direct interconnector between the two countries. The five partners have established the companies “NorthConnect AS” and “NorthConnect KS” for this purpose. The interconnector NorthConnect will be planned as an HVDC powercable. http://www.northconnect.no/ Moray Firth Offshore HVDC hub - €74.1M of EEPR funding secured with the help of SEGEC towards facilitating a more optimal transmission solution for the connection of offshore and onshore renewables in far North East Scotland. This €150M project is being developed by SSE's transmission business, whose case to the regulator Ofgem for the balance of costs is significantly de-risked by the EU grant allocation. This project is part of the Caithness HVDC Connection Longannet CCS Demonstrator and Pipeline – A collaboration between ScottishPower, National Grid and Shell (the ScottishPower CCS Consortium) and working with Aker CleanCarbon, the project deployed a mobile test unit at Longannet for an initial 11 month test programme focussed on capture chemistry and now has plans for a full scale demonstrator by 2014. The project also recently announced plans to construct an onshore CO2 pipeline running from Longannet, through Fife to St. Fergus in Aberdeenshire. Under these new plans, National Grid will build a new 18 km pipeline linking the Longannet site on the Firth of Forth, Scotland, to an existing natural gas pipeline that is no longer required. As much as 1.8 km of the new pipeline will run in a tunnel under the River Forth. A new above-ground installation will be built near Dunipace to connect the two pipelines. The gas pipeline, which will require a change of use, travels 280 km to St Fergus to a new CO2 compressor. The compressed CO2 will then be transported down an existing Shell pipeline for permanent storage in the depleted Goldeneye gas field under the North Sea. National Grid will build several other above-ground installations along the route, with existing installations upgraded. http://www.nationalgrid.com/uk/EnergyandServices/NonRegs/CCS/Projects/Longannet/ CCS Regulatory Toolkit - Global CCS Institute and the Scottish Centre for CCS collaborated to design a toolkit to help nations and regions to test their legislative, regulatory and public engagement processes in advance of receiving applications for CCS projects. http://www.sccs.org.uk/regulatory-test-toolkit/ Voith Hydro Wavegen’s 500 KW Limpet on Islay is in its 11th year of successful operation. Limpet (Land Installed Marine Powered Energy Transformer) is a shoreline energy converter and was installed in 2000 and produces power for the national grid. http://www.wavegen.co.uk/ Pentland Orkney Wave Power Resource (POWER) Ltd – is the only wave energy bid being put forward by the UK Government to the EIB for consideration in the first round of the EU's NER300 scheme. A collaborative project bringing together ScottishPower Renewables (SPR), E.ON Climate & Renewables (E.ON) and Brough Head Wave Farm Limited (BHWFL) - a joint venture between SSE Renewables (SSER) and Aquamarine Power, the project has a bid application of €78M and total project value of €228M. If successful, the project will comprise ten near shore Aquamarine Power Oyster 3 devices and 24 offshore Pelamis machines within the Pentland Firth and Orkney Waters leasing area, operating in multi-device array configurations. Islay Tidal Project – A ScottishPower Renewables project which was recently granted consent to develop the largest tidal array in the world. Consisting of 10 Hammerfest Strom tidal turbines, it will generate enough electricity to power more than 5,000 homes. http://www.scottishpowerrenewables.com/pages/sound_of_islay.asp

More information In understanding the significant role that offshore wind will play in achieving the above targets, the Scottish Government, Scottish Enterprise and Highlands & Islands Enterprise have also developed Scotland's offshore wind portal: offshorewindscotland.org.uk - a single site showcasing what Scotland has to offer to both indigenous industry and new investors in this rapidly emerging sector.