In this Q&A, Ocean Winds’ head of external affairs and policy Nikki Keddie discusses the business case challenges posed by network costs for projects in Scottish waters, how further support could be given to floating wind and the likely prognosis for the UK’s offshore wind deployment targets.
Q: What are your main messages for industry at the show in Glasgow?
A: The Scottish Government needs to consent our 2GW Caledonia wind farm in the Moray Firth urgently to ensure it can be best prepared for Allocation Round 8. Also, the UK Government needs to urgently provide confidence on transmission charges, both for operational assets as well as future projects looking to prepare CfD bids.
Q: What is your reaction to the result in AR7 for fixed-bottom wind?
A: It was a good result for the UK and Scotland, but the underlying problem remains of high transmission charges disincentivising projects in northern Scotland – as seen by development being paused for the 2GW West of Orkney wind farm.
Q: What changes does Ocean Winds believe are required to the CfD system for future allocation rounds?
A: One option is to remove the current grid (TNUoS) charges from bid costs until market reform is implemented. There should also be an extension of delivery years for floating wind projects and a bilaterally agreed (non competitively auctioned) CfD for stepping-stone projects up to 300MW.
Q: What are the biggest challenges for developers at the moment?
A: Transmission charges are eroding value from operational assets that cannot respond to the escalating location signal to avoid new generation in the north of the UK, thereby eroding investor confidence. Projects in the north of Scotland that are eligible to bid for CfDs face huge uncertainty on TNuOS and are therefore likely to bid uncompetitively or not at all.
Q: What are the industry’s key asks of government?
A: Fix TNUoS for operational assets and provide confidence in TNUoS charge levels for CfD rounds until market reform is implemented.
Q: Is the UK government’s Clean Power 2030 target still viable?
A: The Clean Power 2030 target is very ambitious given the current circumstances yet provides a worthwhile target to continue urgency on delivery.
Q: Can you give a quick update on the Caledonia project in terms of the next big milestones and when you hope to get consent, a route to market and go into construction?
A: We are hoping to secure full consent in the first half of this year. This will lead to us preparing a CfD bid in AR8 – assuming some change is made to TNUoS, and then financial close ahead of the start of construction in 2028.