Lessons learned over the past decade as the UK offshore wind industry has expanded – from around 50 turbines in 2004 to 1,183 turbines today – have not yet contributed to a commensurate reduction in the cost of discharging consent conditions, highlighting that economies of scale have not been achieved as expected, and emphasizing the need to address shortfalls in a pressurised consenting process.
This is according to a pair of interrelated reports published today by trade association RenewableUK and European offshore wind consultancy TÜV SÜD PMSS.
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 conflicting 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, which stretch the coping abilities of many consenting bodies to the limit. In this context, there is a natural tendency to act with a precautionary principle when awarding permission for projects. In brief, consenting bodies are faced with having to ‘do more with less’.
The studies assert that long-term policy aspiration to promote cost reduction and stable financial support measures needs to be supplemented with short-term enabling measures to ensure that a steady stream of consented projects go into construction. This can only work if consenting mechanisms and their interactions with the industry remain fit for purpose.
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 materialise. 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.
Likewise, a counter-intuitive and disproportionate rise in consenting costs per turbine as they have grown in size and capacity can be attributed not to their environmental impact, rather to increasingly strenuous regulatory and legislative requirements and the introduction of best practice guidelines that have, in turn, contributed to more extensive resourcing demands.
The first paper, entitled Consenting Preparedness of Offshore Wind Stakeholders: Survey and Recommendations looks in detail at the pressures faced by regulatory bodies and proposes measures including a redistribution of resources for Round 3.
The second, Managing Regulatory and Consenting Costs for Offshore Wind, is the product of a multi-stage analysis of how the cost of meeting consent conditions changed in the period 2002 to 2013. It identifies eight detailed recommendations aimed at reducing the consenting burden and cost profile of delivering offshore wind.
“There is a clear challenge facing the consenting of large-scale Round 3 UK wind projects,” said Dr Steve Freeman, Director of Environment at TÜV SÜD PMSS, and principal author of the reports. “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.”