1. Offshore and Onshore Wind UK Market Outlook Rebecca Williams, Offshore and Onshore Lead

2. About RenewableUK
RenewableUK was formed from the British Wind Energy Association (est – 40 years ago). Over time we evolved from a group of engineers, academics and enthusiasts to a professional association with staff and a dedicated Westminster office and staff in London, Wales and Northern Ireland.
Our aim is to ensure increasing amounts of renewable electricity is deployed sustainably across the UK, and to support our members to win business in renewable markets around the world.
We have two, equally important, purposes which flow from this aim:
To make sure that renewable energy plays a leading role in powering the UK, with RenewableUK members at the heart of this delivery, whether as developers, as members of the supply chain, or in any other capacity.
To bring demonstrable benefits to our members from their membership of RenewableUK. This means providing them with the highest possible quality services and information, supporting them in any way we can to do more, and better business.
Renewable uk made up of 450 companies from small supply chain guys making bolts in Halifax to major utilitiy companies. We represent manufacturers, surveyors, shipping companies, consultants fabricators – whole range.
offshore, onshore, W&T and floating wind.
Exciting sectors but nascent technologies and small project stage so will focus on onshore and offshore
Set the scene – outline policy and context
What does this mean for deployment

3. What is happening in the energy market?

4. The UK Market Installed wind capacity UK over time
Installed offshore and onshore capacity now 18.4GW
Powering over 12 million homes
World leading offshore wind sector
Exporting to every continent apart from Antarctica
Largest single renewable source in UK mix MW
UK wind has grown from humble beginnings – UK’s first commercial wind farm Delabole, began generating on 21st December Offshore wind farm Blythe was the UK’s first operational, commercial farm – 2000.
RenewableUK Project Intelligence - installed wind capacity

5. Decarbonisation Decentralisation Digitalisation The 3Ds
We used to have the concept of the trilemma.
But now the energy market is undergoing rapid change and is becoming decarbonised, decentralised, digitialised.
Heat and transport decarbonisation increasing demand

6. UK Market Scenarios: Capacity vs RES Deployment in the 2020s
Generation Gap from decommissioning Coal, Gas and Nuclear plants reaches almost 120TWh by 2030
Total power demand is expected to grow by + 30TWh from current levels in the next 12 years
High RES deployment will be able to fill the energy gap, but falls short when we include demand growth forecasts
Decarbonisation:
UK carbon budgets mean that UK will need an additional 120TWh of low carbon generation by 2030 due to retiring plant
Subject to change due to amount of demand from electricity and heat. Even under the most optimistic renewables scenarios, there is a significant capacity gap in the 2030s. This is a policy problem for government that renewables could solve.
RenewableUK analysis of FES data and RUK Project Intelligence. Includes new nuclear, with Hinkley Point C from Offshore and Onshore generation based on our High Capacity Deployment scenarios and National Grid’s empirical load factor estimates per year for these technologies

7. UK Market Forecast: Renewables Incumbency in the 2030s
In every major scenario to 2032, renewable generation will be the major source of electricity generation.
To meet the fifth carbon budget, electricity is expected to be at a grid intensity of gCO2e by 2032
The main scenarios have modelled this with combinations of nuclear and renewables
- This is mapping the different scnearios for the power mix against each other. Out to 2032, in every majopr scenario RES will be major energy generation source
RenewableUK analysis comparing FES, CCC scenarios

8. Some see much greater decentralisation
“The idea of large power stations for baseload is outdated”
Steve Holliday, ex-CEO National Grid:
There are nearly 1,000,000 FiT deployed units, >99% under 100kW
Increasing EV demand will be matched by household generation (solar) and storage – e.g. vehicle to grid or Tesla Power wall – as battery costs fall

9. Wind – the Cheapest Renewable Power
Baringa report estimates £49.40 (2017) for onshore
Most recent German auction 38EUR (onshore)
CfD AR2 £57.50 (offshore)
Whatever happens securing dercarbonised electircty at the the lowest cost electricity will be the key to the success of these trends.
This slide shows the plummeting LCOE at a European level of onshore and offshore wind.
CfD AR2 secure record low prices last year.
Onshore not able to compete in UK auctions currently but most recent research suggests an auction for onshore wind could come in at real time price.s

10. Focus on Onshore Wind

11. Record 2017 Onshore Deployment but Facing a Cliff Edge
There is opportunity for more onshore deployment.
RUK Project Intelligence

12. All scenarios suggest more renewables, just a question of scale - Onshore
According to the onshore Project Intelligence, repowering projects listed resulted in a 36% increase in the original capacity.
We assume that 1/3 of projects reaching 20 years of age is respectively repowered, extended or decommissioned
Figures up to 2020 are based on real RUK data, the rest is forecasted
However, these scenarios do not meet the FES Two Degrees scenario.
There is opportunity for more onshore deployment.
RUK scenarios:
High: New auctions every 3 years between 2018 and 2030
Medium: No auctions. Independent developers build consented projects over 50MW subsidy free + current projects under planning and development
Extreme: No auctions. Only the projects currently under development are built. Nothing after 2020.

13. UK Capability

14. Onshore Investment
The new onshore wind capacity installed in 2017 represents an overall investment value of £7.69 billion across the projects’ lifetimes.
£5.3 billion, of the investment value is retained in the UK.
£3.7 billion is spent either in the region or devolved nation
£2.07 billion is retained within local authority.

15. Policy and Politics

16. Policy and Politics
Research finds that onshore wind is the cheapest form of new generation – £46.1/MWh (Baringa)
But UK Government’s 2015 changes mean that onshore not able to access large scale renewables funding mechanism, CfD, and faces restrictive planning regime.
Change in attitude?
Claire Perry, House Magazine

17. Where is the conusultation?
Feed in Tariff
Where is the conusultation?
Clarity of policy is vital for business investment – no visibility post 2019 for small scale/community energy.
Potential sector deal?

18. Offshore Wind

19. Total Portfolio - UK Project Spotlight
The UK portfolio currently has the potential to deliver 34.5GW of offshore wind if fully constructed
UK Portfolio by Owner Share (%)*
UK Portfolio by Status (MW)
* does not include capacity that is ‘On hold’
UK Commissioning Activity & Forecast by Status (MW p.a.)
Hornsea Project One
Status: Pre-construction
Owner(s): Ørsted (100%)
Country: UK
Location: North Sea (England)
Capacity: 1,197MW
#Turbines: 174
Turbine model: SWT
Turbine manufacturer: Siemens Gamesa
Distance to shore: km
Water depth: 20-36m
UK pipeline has potential to deliver 35.5GW
Project Spotlight

20. Recent UK Policy Developments – Offshore Wind
Dramatic cost reductions
Cost of offshore wind dropped 50% since 2015 in last CfD allocation round – with prices as low as £57.50/MWh for Hornsea 2 and Moray East
The Government’s Industrial Strategy featured offshore wind as a UK success story and mentioned the dramatic reduction in the cost of offshore wind as “an example of how business innovation can be supported through effective market design”
Third Contracts for Difference auction
Next CfD round scheduled for spring 2019, with £557 million available for allocation
New Control for Low Carbon Levies policy replaces the Levy Control Framework – guarding against boom-and-bust policy uncertainty
Future developments
Crown Estate Scotland working with Government and industry to consider new leasing round for fixed and floating offshore wind projects in 2018
Subsidy-free offshore wind?
Floating offshore
Even under the most optimistic renewables scenarios, there is a significant capacity gap in the 2030s. This is a policy problem for government that renewables could solve.

21. UK Offshore Wind Scenarios: subsidy free in the 2020s?
Offshore market will continue to grow into the 2020s
There are enough projects in the pipeline to deliver National Grid’s most ambitious scenario
However, the extent of future growth depends on further auction rounds, followed by a clear framework to deliver long-term deployment
RUK Scenarios:
High: Based on RUK PI model
Medium: This scenario assumes that there will be a 3rd CfD round occurring in 2020 with the results being announced in Projects will be built subsidy free from 2025 onwards
Low: This scenario assumes that there will be no further CfD auctions after the one in Sep. Projects will be built subsidy free from 2025
For offshore Wind, the story is subsidy-free and scalability
Issue to consider:
Next leasing rounds could/should be brought forward
Future of balancing services – getting more sophisticated, can the OFTO regime support this?
Increasing deployment means increasing conflict with natural environment and NGOs challenging planning constraint
Role of industrial strategy and opportunities for export

22. Offshore Wind Forecasts: O&M Spending in the 2020s
O&M spend per year in the UK has steadily increased over the past decade and can be expected to continue to increase into the 2020s
CAPEX spend for the offshore sector is influenced by the frequency and predictability of the UK auction rounds
Auction results in September returned 3 successful projects with the lowest strike price at £ Further auction rounds, with £557m allocated, are expected before 2020 but not yet timetabled
How can we adapt our events to reflect changes in the market?

23. Wave and Tidal

24. Wave and Tidal
Priority for wave and tidal is enabling deployment to get costs down
OREC report due out shortly, shows that costs will become competitive with other generation [1GW deployment <£90/MWh]
Access to CfD funding is one option for larger projects [e.g. Atlantis]
Innovation PPA, to enable route to market for smaller deployment and development projects
Even under the most optimistic renewables scenarios, there is a significant capacity gap in the 2030s. This is a policy problem for government that renewables could solve.

25. More Information Policy Analytics
Project Intelligence:
RUK Policy Analytics: