In our soon-to-be published report, BVG Associates estimates that should the UK grasp this chance to industrialise, up to 65,000 jobs could be created in wind farm construction and a further 10,000 associated with ongoing maintenance. While no one is in any doubt as to the economic potential of developing the UK's offshore sector, what is less certain is whether and how this potential will be fully realised.
UK offshore map One concern of overseas wind companies investing in the UK and expanding their offshore supply chains has been a perceived shortage of available port capacity and related manufacturing land. A number of European ports, such as Bremerhaven, in Germany, and the Danish seaport of Esbjerg, are already successfully servicing the North Sea offshore wind sector, meaning the UK is missing out on a large slice of the cake and will continue to do so until it improves the facilities on offer.
Three-pronged role
In simple terms, the effective development of an offshore wind farm requires ports for three main stages. The first is manufacturing, typically involving the assembly of nacelle components and the manufacture of blades and towers. Next comes construction, in which the parts of a turbine are prepared for assembly and loaded onto specially designed ships before being taken out to sea. Finally, the need to operate and maintain an offshore wind farm over its lifetime means the owner will require a coastal base from which to undertake the necessary work.
Each stage of this process has different requirements as far as ports are concerned. Operation and maintenance, for example, is essentially about moving people between land and turbines, meaning limited requirements in terms of space and access only for smaller vessels.
On the other hand, because of the size of components involved, the manufacturing stage is much more land intensive; manufacturers usually want to source components locally to avoid unnecessary road transportation and so are looking increasingly to portside turbine assembly facilities. Construction, too, requires its own infrastructure, for example an appropriate amount of quay space to accommodate the specialist vessels used to install foundations and turbines.
In our research on ports last year, we identified construction as a key ingredient for stimulating a UK-based offshore supply chain. The UK ports industry is successful but that means less availability of port-related land with deep-water access. The danger at the moment is that because of the lower availability of suitable construction sites, wind farms destined for UK waters are being installed without ever touching UK soil. But if construction gets going in this country, then the product automatically has to come here so it is a logical next step to establishing local manufacturing.
Plenty of available land
In our survey of UK port potential, we looked around the country for suitable sites to accommodate the sort of infrastructure required. Our assessment considered how many gigawatts will be built and where, and how many hectares of land would be needed to support the level of manufacturing and construction required to deliver that capacity. Typically, using today's technology, 10-15 hectares would be required to construct in the order of 300MW a year, although technology is of course improving.
Our initial fear was that the UK simply would not have sufficient commercially available land to cope with the likely port requirements of a domestic offshore sector, but our conclusion now is that there absolutely is enough.
Overall, we have identified up to 20 ports that meet the necessary criteria, in terms of physical size and marine capabilities (click to view enlarged map on left). As a general rule, thanks to ports such as Belfast's Harland and Wolff, and Mostyn, the west coast has been better served than the east. This is because most offshore activity to date in the North Sea has made use of existing ports in Europe, not a practical option for projects in the Irish Sea. But with a large share of the future market slated for the North Sea, it is here that the need to develop the UK port infrastructure is most urgent.
In these likely east coast hotspots, we envisage the development of ‘super-hubs'. These would be ports that combine geographical location with a large amount of available land to support manufacturing and construction, and the right quayside infrastructure for specialist vessels. We have identified four suitable estuary sites: Medway; Humber; the Tyne and Tees taken together; and the Firth of Forth. They face the right way, are in the right place and have the combination of vessel capability and land availability to employ thousands of people in those areas.
Secondary port locations will also attract manufacturing activities that address local markets on the east and west coasts. These sites will also create hundreds of jobs.
From a ports perspective, the offshore wind industry represents a potentially significant market. Port-related expenses account for around 1% of the total installed cost of an offshore wind farm. This translates into a potential market for UK ports of more than £150 million a year at peak installation rates, totalling up to £800 million by 2020.
A number of factors are holding ports back from leaping headfirst into this new market. Until fairly recently, port owners were not all that familiar with the wind market, although this has now changed with a generally high level of awareness across the industry. But the main factor that has so far prevented ports' wholesale espousal of the wind business is the fundamental economics of the market.
UK ports are generally in private ownership, so their operators are motivated by maximising the yield from their piece of land, and they have been successful in doing exactly that. An industry like wind that has high demands but is always seeking to reduce costs presents port owners with a tough call, particularly when they have a choice of different, higher-earning uses for their land. That is where the market fails: the wind industry demands top-quality quay space and large areas of manufacturing land, but cannot afford the premium rates of port operations.
Ports reconsider wind
Two factors may help overcome this wrinkle in the market. One is the £60 million competition fund announced in this year's Budget to help create waterside manufacturing sites and prepare for growth in the offshore market. The ports industry is eagerly awaiting further details of this initiative.
But perhaps more significantly, at least for the time being, is the fact that the recession has prompted a slump in container shipping, one of the cornerstones of the ports' business. In a number of locations across the UK people who either are planning to build container capacity or have existing container capacity are having another look at the wind industry and reconsidering the value of the sector. That is good news for the offshore industry and could be just the catalyst the market needs.
Julian Brown is associate director of BVG Associates, a specialist wind industry consultancy that provides support in technology, supply chain and investment for clients including the UK Department of Energy and Climate Change, the Crown Estate, leading wind turbine manufacturers, private equity investors and wind farm developers. Contact info@bvgassociates.co.uk
Developer's perspective - Ole Bigum Nielsen
When Vattenfall acquired the rights to develop the Thanet project, included in the package was the use of Ramsgate harbour in Kent as our base for building the plant. Overall, we have been very happy with Ramsgate's facilities and we are on track to complete the project successfully from this base.
However, the process has not been without its challenges. For example, before we could use the port we had to undertake extensive and costly dredging work to make the harbour deep enough to accommodate our installation vessels. And we were frequently at the mercy of the elements, with tide and weather conditions often preventing us leaving or accessing the port.
Issues such as these will give us food for thought as we prepare for other offshore projects under Round 3. The suitability of ports is a huge consideration in the overall logistics of developing an offshore wind farm, and with the scale of our future work off the Norfolk coast, we will need facilities that are a step up from those at Ramsgate.
For example, space will be a big requirement. Wherever we choose to base ourselves will need to be able to accommodate a large number of people who will be located there for several years, warehouse space for large amounts of equipment and tools, and buildings for our future operations and maintenance work. We will also want our suppliers to be located nearby, so space for them will be a further prerequisite. Suitable quay capacity will be needed to allow large installation vessels in and out easily.
What's critical now is for wind farm developers, port authorities and landowners to talk to each other. If a harbour has to be extended, that takes time. So it is a question of the relevant parties opening a dialogue as soon as possible to define and agree what will be needed to deliver the ambitions of Round 3 and beyond.
Ole Bigum Nielsen is project director of Vattenfall's Thanet Offshore scheme
The ports' perspective - Steve Gobbi
There is considerable activity in the UK port industry to understand and embrace the new markets offered by the offshore renewables energy industry, possibly our greatest maritime advantage since North Sea oil. Our import-oriented ports have been propelled into considering how they can be part of the supply chain to an industry with enormous potential.
UK ports have so far been prudent in their approach to industry hype. But accused of circumspection, the industry is now engaging with regional development agencies (RDAs) to gauge the underlying requirements and investment needs.
There are some early wins in the operations and maintenance part of complicated supply chains, and some smaller ports have moved quickly to claim their advantageous geographic position. However, it is the prime sites or ‘super-hubs' that are now developing their strategy with the main infrastructure players.
The UK port industry realises it is in competition with mainland Europe, where cheap and plentiful land, city and state support and the advantage of a mature turbine construction industry mean that the playing field is inclined in the wrong direction.
So, how do our potential super-hubs counterbalance this? Well, they must have the basics: plenty of land, deep water and minimal vessel restrictions in terms of draft, beam and importantly height (no bridges or overhead cables). Access to the Round 3 zones is also a critical driver.
The ports industry is faced with stark facts. Initial infrastructure costs will be substantial and land requirements potentially exponential should the hub concept succeed. Long-term partnerships will be essential, together with an effective strategy for substantial labour supply through the RDAs and local councils. A clear route through the planning system is also a key requirement.
Last comes funding. The Renewable Obligation Certificate (ROC) has been effective in incentivising the generating industry. But what about ports and manufacturing jobs? A £60 million government competition to provide infrastructure assistance for turbine manufacturing ports, coupled with centres of excellence and R&D facilities, is a good start. But is it enough?
More support needed
What is needed is less simplistic than a one-off handful of cash. A long-term and effective system, perhaps tax incentive-based to complement the intent of the ROC, would show real commitment. If the port industry does not receive coordinated and effective help from the highest levels we will experience a temporary warm feeling during the assembly years but not the true boom we so dearly need.
Steve Gobbi is marine director of Peel Ports, which supplies services to the offshore wind sector at Port of Liverpool, specifically for Dong Energy and their support vessel for Burbo Bank
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