The Crown Estate’s announcement on Leasing Round 5 mean that the Celtic Sea is no longer just a speculative market. Much work remains to be done over many years but, with named lease-holders, the stage is now set for offshore wind in the Celtic Sea to be a genuine success for the UK. And to deliver social and economic benefits to people in Cornwall, the South West and South Wales. But much work remains to be done over many years….. Phil Johnston unpacks this much-anticipated announcement:
This is good news
- Uptake of two (of three) Celtic Sea sites (PDAs) is very positive – it represents commitment to build out 3GW of FLOW by the late 2030s (for comparison, Hinkley-C will be 3.3GW).
- Very low option fees, of £350/MW/year, reflect the risk and long-term development required of FLOW in the Celtic Sea. Crucially this may impact how long it takes new lease-holders to shift gear from development to delivery. Until long-term intent is made clear “timing risk” still hangs heavy on our efforts to build capacity in our ports, infrastructure, local suppliers and workforce.
We now know the lease-winners
- Equinor secure PDA 3, with nearest the land-fall to the North Devon/Cornwall border
- A consortia of ESB, EDF Renewables UK & Ireland take PDA 1 off Pembrokeshire
- PDA2? We shall see. It will be progressed say the Crown Estate, with more detail to follow in the autumn.
Everything has changed, nothing has changed
- Knowing who the lease-holders allows engagement to be focused – but challenges on the what, where, when and how FLOW projects can drive social value remain.
- Focus on lease-winners will create stakeholder noise. Offers not asks will cut through more effectively – especially if voiced through #LocallyLedCollaboration.
This is good for the whole region
- The scale and variety of offshore wind opportunities in the long-term should be plenty to spread across Cornwall, the South-West and South Wales.
- A competitive element cannot be denied, particularly with the largest ports, i.e. Port Talbot / Bristol / Portland but any “us or them” narrative is largely a false perception – and unhelpful. Pride should not hinder pragmatism.
- Far more constructive is to prepare. To build capacity of local strengths which match the needs of Celtic Sea FLOW – and the export potential of offshore wind. #NoRegretActivity
But FLOW is not a silver bullet for some of the UK’s most impoverished coastal communities
- Local jobs and economies will not be boosted automatically or immediately. Offshore wind, in the Celtic Sea and further afield, is an opportunity to be grasped not assumed.
- Only proactive, realistic and coordinated efforts on the ground can develop a competitive edge in a global industry. #CredibleAmbition
Stepping stones are more secure
- Uncertainty remains but the LR5 announcements gives “market pull” to preceding smaller projects; TwinHub, Erebus, WhiteCross and Llyr.
- These vanguard projects may have more confidence to go beyond testing and demonstration of <200MW to drive de-risking of the gigawatts to come. Bolder approaches to technology choice, regional capacity building and EPCI strategy would certainly be advantageous to long-term prospects of the Celtic Sea and the UK as a whole.
No more warm words, cool action is required
- Promissory headlines, chatty events and glossy reports will no doubt continue to flow -but the Celtic Sea is now tangible. Actionable details are now necessary: Technology choice? Contracting models? Social value plans? How to practically ensure that 3.5% of the apprenticeships and 10% of 19-24 year-olds not in education, employment and training are embedded in the offshore wind workforce?
- At this stage, details on where the supporting supply chain – and therefore jobs – will be situated can barely be inferred. International lease-winners now take the reigns but a partnership approach, “design to local” principals, and backing for UK-led solutions should be embedded.
- Smart delivery of the £1.1 billion investment plan into UK’s offshore wind supply chain, the UK government’s levers through the CfD process and Clean Industry Bonus scheme and bold action by GB Energy should all now be brought to bear. #TargetedAndTimelyInvestment
Efforts to ensure the success of Celtic Sea FLOW will now ramp up – but they were begun long ago. Stakeholders across Cornwall, the South West and South Wales have been preparing for FLOW from the very earliest stages and we can now welcome Equinor and EDF Renewables UK & Ireland / ESB to put plans into action.
