MPs hail floating offshore wind as ‘Wales’ biggest investment opportunity’
MPs are calling on the UK Government to implement enabling policies for the development of floating offshore wind farms in Wales, which they are touting as “the single biggest investment opportunity for decades”, with investment potential of up to £20bn.
The call to action has been made through a new report from the Welsh Affairs Committee this week, published as part of its ongoing inquiry into the potential for offshore floating wind. The inquiry is timely given the Welsh Government’s recent commitment to meet its electricity demands entirely with renewable generation by 2035.
Offshore floating wind is in its relative commercial infancy but is an option for harnessing wind from sites further offshore.
The Crown Estate, which is responsible for leasing plots of the seabed to wind farm developers, has stated that there is scope for up to 24GW of floating offshore wind capacity in the Celtic Sea. It has already committed to leasing rounds for up to 4GW of offshore floating wind by 2035. But the Welsh Affairs Committee heard concerns that this potential is unlikely to be met without a stronger long-term vision for offshore wind in Wales from the UK Government, supported by policy interventions to make development easier.
On the long-term vision, the UK Government does have a target for the deployment of 5GW of offshore floating wind by 2030, as part of wider plans for the nation to host 50GW of offshore wind by this time. But it has not clarified the role of each devolved nation in delivering these targets, which the Committee would like it to do.
The Committee also reiterates, in its new reports, its previous calls to address network constraints that make connection to the grid onshore a challenging and lengthy process for many offshore wind developers. The average timeline for a UK-based offshore wind project is currently 12 years, according to the Energy Transitions Commission, with the UK Government itself having posted a 65% increase in delivery timelines for major infrastructure projects since 2012.
Strong direction of travel and smoother development processes should encourage investment in floating offshore wind, the report argues. It notes that energy majors are interested in the technology, as are energy users. On the energy user piece, the report states that the most likely connection point for floating offshore wind in the Celtic Sea would be coastal Pembrokeshire. This would present ample opportunities for the electricity to be used by industrial players at Port Talbot, including Tata Steel, either directly or as green hydrogen.
Safeguards and supply chains
The report not only looks at the potential to develop floating offshore wind, but how best to ensure that the socio-economic benefits of scaling the sector are reaped by organisations and communities within Wales.
It recommends that the Crown Estate implements better safeguards to ensure that developers complete their project, plus a mechanism to hold developers to account on their commitments to invest in local supply chains for wind farm materials, parts and services. Developers bidding for a lease are required to present supply chain investment plans, but experts told MPs that there is little governance in place to ensure the delivery of these plans.
Similarly, the Committee is calling on the UK Government to reform future Contracts for Difference (CfD) auctions for floating offshore wind to include enforceable local content requirements. The delivery of 4GW of offshore floating wind with strong local supply chain requirements could support up to 29,000 jobs within 12 years, the Crown Estate has previously stated.
“The full economic benefits of floating offshore wind should go to the region and not be lost overseas,” the report summarises. “To ensure this happens, the highest level of ambition should be set for regional ports to deliver all the necessary manufacturing and assembly functions of floating offshore wind.”
Preseli Pembrokeshire’s Conservative MP Stephen Crabb, who chairs the Welsh Affairs Committee, said: “Our Committee was told that floating offshore wind in the Celtic Sea could bring £20bn of direct investment into the domestic market. Some of the world’s largest energy companies are already drawing up Celtic Sea investment plans.
“The challenge is to ensure that floating offshore wind creates real long-term economic value for Wales. Ports like Milford Haven and Port Talbot are ideally situated to become hubs for manufacturing and operations, and firms like Tata Steel could form part of a strong Welsh supply chain. Achieving this will require a clear strategy from Government and the Crown Estate to prioritise domestic content and ensure developers meet their commitments.
“Floating offshore wind represents a once-in-a-generation industrial opportunity for Wales – we cannot afford to let this pass us by.”
Nuclear in focus
The report from the Committee comes shortly after it held its last evidence session for a separate inquiry into nuclear energy in Wales. A report is expected in the coming weeks and will likely push the UK Government for plans on the delivery of 24GW of small modular reactors that it has pledged, including sites in Wales.
There are currently two large sites licenced for nuclear generation in Wales, at Trawsfynydd and Wylfa. Late last year, the Nuclear Decommissioning Authority signed a memorandum of understanding on the development of a new small modular reactor at Trawsfynydd in Snowdonia and, this week, the project took a further step forward as Cwmni Egino published a site development plan. The Welsh Government wants the site up and running by 2027.
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