The UK government has pledged £60 million to kick-start the upgrade of UK port facilities between now and the construction phase of Round 3. But will private sector investment flow thick and fast enough to realise this vision?
By Andrew Williams, UK correspondent
In order to cater for Round 3 and other European offshore wind build-outs, several key ports and harbours will need to be upgraded, each requiring quayside manufacturing facilities, adequate space for quayside turbine assembly, transport links and appropriate technology.
Although it depends on the scope and volume of throughput for each ‘super-hub,’ the biggest ports could easily be involved in full manufacture and offshore construction, could be several hundred acres in size and use over 1km of deep water quay. However, doubts still remain as to whether these super-hubs can be developed in time.
UK government support yet to take shape
In response to these concerns, the United Kingdom (UK) government earlier this year pledged to set aside £60 million for 'the development of port sites to support offshore wind turbine manufacturers'.
The principal objective of the government investment is to support the development of UK waterside manufacturing facilities that are capable of accommodating the manufacture of wind turbines and foundations, as well as encouraging adjacent supply chain development.
However, competition rules have yet to be announced and the most appropriate mechanism for supporting the development process is still under consideration. As a result, no sites have yet been identified as potential funding recipients for port and harbour upgrades under the UK government scheme.
However, it is likely that east coast ports in Forth, Tyne, Tees, Humber and Medway will be strong contenders, as well as Mersey on the west coast.
“We just want to see UK ports regenerated so that they can supply the renewable sector,” says Peter Madigan, Head of Offshore Renewables at RenewableUK.
“Different UK ports are better suited to fulfil different roles for manufacturing, construction and operations and the maximum potential of all should be explored,” he adds.
When – and if - the ship sails in
The scale of investment required to develop these so-called super ports is a subject of hot debate. Some within the industry believe around £60 million (£72mn; US$92mn), which is the amount already set aside within the government scheme, might be just enough to assist ports in making the necessary improvements.
However, others warn against the threat of spreading the funds too thinly in an effort to cater for the requirements of a maximum number of sites.
“To create a super-hub, the money made available shouldn’t be divided between too many sites,” says Madigan.
Other commentators point out that the money currently set aside under the government scheme is likely to fall short of the total needed to ensure the development of a UK port infrastructure that is fully equipped to deal with the future demands of the offshore wind industry.
“The level of and type of investment required at each location varies widely, depending on size, geography and the aspirations. In some cases it could exceed £150m,” says Julian Brown, Associate Director at renewable energy consultancy BVG Associates.
Private funding indispensible
In the light of these predictions it is quite likely that the planned government funding, which will provide a useful early boost, will need to be supplemented from other sources. In fact, it is possible that the bulk of the financing will need to come from elsewhere. Private sector port operators and manufacturers have already begun investing in some ports - a trend that looks set to continue.
“The establishment of new manufacturing hubs will require some government regeneration funds as an initial stimulus, which will then leverage private sector investment,” says Madigan.
“[It’s] still [too] early to say as different business models are being explored. [But I] would expect it to [come from] the private sector,” says Brown.
So, how realistic is it that these facilities will be developed? According to Brown, the plans are very realistic, provided that government commitment to offshore wind development is maintained in the long-term.
“Land owners, offshore wind farm developers and supply chain contractors are working hard to ensure facilities will be available in time,” says Brown.
However, there is still a lot of work to do in ensuring that valuable manufacturing jobs and investment opportunities are not lost to overseas competition.
“The government needs to take action this year to stand a chance of getting offshore wind manufacturers sited in the UK,” says Madigan.
The current super hubs initiative represents the UK’s best chance of establishing a strong domestic offshore wind manufacturing industry. In light of this it not only is essential that the government remains committed to its objectives, but also that stakeholders throughout the industry continue to push in the same direction.
To respond to this article, please write to: Andrew Williams
Or write to the editor: Rikki Stancich
Image: Thanet Offshore Wind Ltd
We explore the best practices in future trends for offshore wind finance.
The traditional maritime fishing industry has long nurtured a tolerance for risk. Fishermen, plying a difficult trade stretching back over thousands of years, operated within a deeply entrenched culture of fatalism in the face of danger. Now they face a different challenge.<