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Renewables Pipeline Tracker: Higher, faster, stronger - the changing nature of offshore wind

Lucy Dolton Lucy Dolton Analyst
18th November 2020

Having released our October 2020 Renewables Pipeline Tracker report, which covers the latest developments for pipeline renewables sites across GB, this blog explores our recent findings on the pipeline and in particular offshore wind.

The Renewables Pipeline Tracker is updated quarterly and includes information across over 1,000 prospective renewables sites (including battery storage) in Great Britain through an accessible database. Coverage spans publicly available information on metrics such as site ownership, capacity, co-location and planning, through to confirmed and forecast grid connections and network connection locations. It also includes details on confirmed routes to market, and the subsequent analysis report also provides topical case studies on industry hot topics.

From reviewing sites currently in the database, the dominance of particular technologies in the pipeline is immediately apparent. Just four technology types—offshore wind, battery storage, solar PV and onshore wind (excluding Remote Island Wind), account for 77% of all sites in the database and 81% of capacity. As a result of this prevalence, the October 2020 report takes a closer look at fixed-foundation and floating offshore wind sites currently in the development pipeline. In this case study, we identify 22 sites classified as either offshore wind (fixed foundation) or floating offshore wind.

Out to the horizon: Seabed depth, distance from shore and turbine capacity

Our analysis shows how new offshore wind sites are developing in deeper waters at locations further from shore than the existing fleet. For the pipeline of new build sites, the median seabed depth across each of the 22 sites ranges from 15m to 85m. While floating offshore wind technology has developed to enable the deployment of offshore wind in areas of deeper water, such as at the under-construction Dounreay Tri Floating Wind demonstration site where seabed depth reaches 80m, newer fixed-foundation sites in planning are also reaching greater depths. Exemplifying this, Hornsea Two and Three wind farms are located in waters ranging between ~25m to 46m and ~27m to 72m deep.

While project-specific factors ultimately influence the location of sites, the growing capability to deploy offshore wind in deeper waters is clear. Not only are sites reaching greater depths of water, but sites such as Hornsea Two and Three, in addition to Dogger Bank A, B and C, and Sofia wind farm are also further from shore. Of these sites, the distance from shore ranges between approximately 120km to 165km. Comparatively, the average distance from shore of sites that gained planning up to and including Allocation Round (AR) 2 of the Contracts for Difference (CfD) scheme (approximately pre-2017) is just 20km.        

The competitive tensions created through offshore wind’s primary route to market, the CfD, have also helped to drive innovation and improvements in turbine capacity. On average across the 22 sites listed in the report case study, turbine capacity is 8.5MW. Amongst others, notable site mentions here include Dogger Bank A & B, which announced on 21 September 2020 that it had signed a contract to use GE’s 13MW Haliade-X turbines. The GE Haliade-X 13MW prototype turbine also recently set a new world record for daily output, producing 312MWh in a single 24-hour period (equivalent to a 100% load factor). Additionally, Siemens Gamesa confirmed on 22 June 2020 that it has conditionally received an order to supply Sofia wind farm with its flagship 14MW SG 14-222 DD turbines, which are expected to go into production in 2024.  

Getting to 40GW: AR4 and beyond

Recent announcements by BEIS have confirmed that the CfD AR4 auction will take place in “late 2021” and look to procure up to double the 6GW seen in AR3. Industry eyes are now turning to how much of the pipeline of offshore wind and other technologies could compete for this potential 12GW opportunity. To help create a view on the “CfD pipeline” our database filters and categorises all 1,000+ sites on a number of key criteria including planning and grid approval, route to market confirmation and build status to create a tiered ranking. Three tiers are used, with Tier 1 highly likely to develop, Tier 2 likely and Tier 3 unlikely to develop in their current state.

Employing this tier ranking categorisation, specifically for more likely Tier 1 and Tier 2 sites, we provide a view of potential capacity that could enter into the upcoming CfD AR4. Splitting offshore wind as a separate “pot 3” as has been put forward as an option by BEIS in their March 2020 scheme consultation, we see that 7.9GW is currently likely to be eligible to bid. Additionally, the 2.4GW Hornsea Three site and 1.8GW Norfolk Boreas site are still awaiting Nationally Significant Infrastructure Planning (NSIP) approval and could also enter AR4 should they gain approval in time.

Across Pot 1 “established technologies” and the remaining Pot 2 “less established technologies” up to a further 9GW of sites could be eligible to compete based on our tiered ranking with the full report detailing the breakdown by technology, owner and site. In total across all eligible technologies this equates to 17GW.

Competition in the CfD amongst offshore wind and other technologies could well be fierce. However, as we note in our analysis even if all 22 offshore wind sites in our pipeline are awarded CfDs or come forward as subsidy-free options in the coming years, total offshore wind capacity would only reach 29.7GW by 2030 (figure 1) assuming all prospective sites are built. This is well short of the 40GW by 2030 target recently reiterated by government and would actually start to fall by the end of the decade as the earliest offshore wind sites under the RO start to reach the end of their economic life.

Increasing the pipeline of prospective offshore wind sites is therefore needed to reach the 40GW ambition. Signs are promising, following the Prime Minister Boris Johnson announcing his Ten Point Plan for a Green Industrial Revolution today. In addition to this, the Energy White Paper is due to outline further details for offshore wind support in the coming weeks, and the Scottish government announced on 28 October that it will aim for 11GW of offshore wind by 2030. Critical to the pipeline will be upcoming seabed leasing rounds in 2021. The 8GW-10GW ScotWind Leasing round is due to open in early 2021, alongside the bidding stage of the Crown Estate’s Offshore Wind Leasing Round 4, set to create the opportunity for “at least 7GW” of new projects, also expected early next year. Both the ScotWind and Crown Estate Leasing rounds will be the first of their kind in a decade, and as such will be highly indicative of the magnitude of development that has occurred in offshore wind within this time frame. No doubt, future offshore wind sites will likely continue to develop in deeper waters, further from shore and with even large turbine capacities in the pursuit of ever cheaper costs.

Our Renewables Pipeline Tracker Report is available as a subscription service detailing the latest developments for offshore wind and the wider renewables pipeline. For more information please contact Lucy Dolton l.dolton@cornwall-insight.com