How the Buchan Offshore Wind project highlights industrial opportunity
The floating challenge that faces ScotWind
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This week, Crown Estate Scotland (CES) issued a progress report on the huge pipeline of offshore wind projects under the ScotWind leasing round. It involves a big number: £25.6 billion.
This is the amount that developers behind 16 of the currently active 19 wind farm projects have so far reported they are committed to spend to create the supply chains needed to build and operate them.
Yet as Mike Spain, CES interim director of energy and infrastructure put it, the prize of ScotWind “will only be secured by working collaboratively to target support and investment where it is needed most to overcome the challenges faced by the sector.”
Those challenges include insufficient grid and transmission capacity, transmission charging that penalises Scottish wind projects, global tariff and geopolitical uncertainty, and inflation.
To this list we can add work by the National Energy Systems Operator (NESO), the government agency responsible for ensuring electricity supply and demand are balanced, on the UK’s first “strategic spatial energy plan” (SSEP).
Expected next year, this will identify the best locations for energy generation and storage on a zonal basis across the UK from 2030 to 2050, in anticipation of an expected doubling in electricity demand by mid-century.
The concern in the industry is that ScotWind could be disadvantaged if the SSEP focuses on defining a theoretically optimal energy system at the expense of taking sufficient account of the future economic value of floating offshore wind as a vehicle for developing industrial capacity. The fear is that some of ScotWind could even be bypassed.
This matters because two thirds of ScotWind envisages floating wind farms that won’t be operational until after 2030 – the SSEP’s sweet spot.
Existing industry challenges have already caused some ScotWind developers to delay their projects, triggering discussions between them, CES and the Scottish government over whether and how fees might be levied on developers if they want to extend their lease options, which are to be converted into leases under which the wind farms would eventually operate.
All of this is high on the agenda of Buchan Offshore Wind, a one gigawatt, 67-turbine floating wind farm planned northeast of Fraserburgh, and one of the leading ScotWind projects. Shareholders are a French developer called BW Ideol, Elicio, a Belgian developer, and Baywa, a German-Swiss developer.
Buchan highlights not only the jeopardy faced by ScotWind projects, but also the opportunity they present. “The next couple of years are very critical for us in terms of execution of the project,” says Clare Lavelle, project director.
Buchan is one of the very few ScotWind projects to have made an early commitment to a key building block in floating wind: the foundation on which a turbine sits.
This is a major hurdle for any floating project because the nascent industry is still figuring out which foundations can be manufactured to standard specifications at scale, thus making them financeable. It’s a key milestone before shareholders in floating projects can give them the financial green light to proceed to construction - known as “financial investment decision” (FID).
Buchan, which is aiming for FID in 2029, decided early on to go with a square-shaped ring made of concrete known as a “damping pool” – so-called because it calms the waves inside the ring, helping to stabilise the turbine that sits on top.
The technology has been in development since 2018 by BW Ideol on demonstrator wind farms in France and Japan. “Because we made this technology decision at quite an early stage, we've been able to do a lot of design development of the damping pool, adapting it for the North Sea,” Lavelle explains.
Moreover, Buchan has committed to manufacture the foundations in Scotland at Port of Ardersier, involving a £200 million investment. Concrete will be made in the UK by Swiss building materials group Holcim which, helpfully, owns the Glensanda aggregate “super-quarry” on the Argyll coast.
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Using this local source means Buchan will be able to retain a key part of the supply chain within the UK at a time when reliance on global supply chains has become riskier due to geopolitical instability. “By shortening supply chains, I think there's a real economic security aspect here,” Lavelle says.
It also means jobs can be created locally. Buchan anticipates that the Ardersier facility will support 1,300 people by 2031, when construction would begin. Ultimately, the whole Buchan project could employ 2,900. Lavelle says enough people with the right skills ought to be available with some upskilling. Yet without policy certainty, ensuring this happens is by no means certain.
This matters because the marine engineering experience required for floating offshore wind is similar what’s already in the oil and gas sector. Yet Paul de Leeuw, director of the Energy Transition Institute at Aberdeen’s Robert Gordon University, warned last month of an “ever-narrowing window of opportunity” to ensure that such skills are not lost as oil and gas declines, warning that the Northeast “risks … an erosion of supply chain capacity” without the right policy support.
Buchan’s supply chain commitments amount to £4.7bn of the £25.6bn ScotWind total. It has earmarked as much again in what CES categorises as spending “ambition” if supply chain opportunities develop as expected.
Meanwhile, the project’s backers have already spent about £70m in development expenditure, with the same amount poised for further investment. That is, if things pan out satisfactorily.
“We see ourselves as a ‘pathfinder’ project that catalyses manufacturing capability and creates a legacy that extends beyond our projects,” Lavelle says.
“So we think we're well aligned with government’s ambitions, and we're very hopeful that we're going to see that reflected within the SSEP.”
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