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National Renewables Infrastructure Plan
National Renewables Infrastructure Plan Stage 2Report from Scottish Enterprise and Highlands and Islands Enterprise
July 2010
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2National Renewables Infrastructure Plan Stage 2 Report | Contents
Contents
Stage 2 Report - Executive Summary .......................................................... 3
1. Introduction .............................................................................................. 5
2. N-RIP Industry Collaborative Approach .............................................6
3. Market Interest in Port Clusters/Groups ..............................................7
4. First Phase Site Investment Cases ......................................................... 8
5. Planning Processes ............................................................................... 11
6. N-RIP Funding Approach ....................................................................... 13
7. N-RIP Total Site Capacity Potential Economic Impact .................... 17
8. Wave and Tidal - Port Infrastructure Needs ....................................... 19
9. Conclusions and Recommendations .................................................... 24
Appendices ....................................................................................................26
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For sites identified as having the scale required
for integrated manufacturing in N-RIP Stage 1 acombination of these facilities could be accommodated.
For those sites identified for distributed manufacturing
at least one of these uses could be housed in the
location. In addition cable manufacturing facilities will
be required and will have a different layout to those
listed above. There is also potential for Scotland to
host substation platform fabrication and monopile
production at these sites.
Based on knowledge of existing buildings and costed
designs of particular types of facility, a generic
benchmark cost for these types of facilities is set out.
This is indicative and a guide to the order of building
costs envisaged. The costing relates to a shell buildingonly. In addition, there will be a range of internal fit out
costs and external site costs driven by the particular
users needs. Table 1 below sets out these benchmark
costs.
Table 1 - Estimated building costs.
[Source: SE Estimates of shell building costs based on indicative floor areas]
Manufacturing Building Type Indicative Cost(shell building)
Jacket production facility 10m
Nacelle production facility 10m
Blade production facility 25m
Tower manufacture facility 10m
A range of options are available for the procurement
of these new facilities user procured, asset ownerprocured and third party developer procured. Each of
these instances leads to different beneficiaries from the
revenue streams arising from the manufacturing use.
Bespoke Equipment/Facility Requirements - The
third element of infrastructure investment is to support
particular users requirements. This relates to craneage/
lifting equipment, load out quayside configuration and
bespoke plant and equipment required by the particular
manufacturing process for example steel casting, gear
box testing plant.
It is difficult to predict these elements at this stage
as they are directly related to the user and their
requirements. A range of approaches to financing theseelements are available and these would be considered
with any user by the asset provider.
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[Source: Site-owner supplied investment plans]
Port Cluster Site OwnerEstimated Investment
Costs (excl. Building) mScale of potentialManufacturing Use
Forth/Tay Leith Forth Ports plc 35 Integrated
Forth/Tay Dundee Forth Ports plc 5 Distributed
Forth/Tay Fife Energy ParkSE own site/JV agreement withFife Council
8 Distributed
Moray Firth Nigg KBR Ltd/ Wakelyn Trust 22 Integrated
Moray Firth ArdersierWhiteness Property CompanyLtd (WPC)
15 Integrated
Subsea Aberdeen Aberdeen Harbour Board 24 Distributed
Subsea PeterheadPeterhead Port Authority /ASCO
27.3 Distributed
West Coast Hunterston Clydeport Ltd 65 Integrated
West Coast ArnishStronoway Trust own land/ HIElease
13 Distributed
West CoastMachrihanish /Campbeltown
Argyll & Bute Council/ HIElease
5.5 Distributed
West Coast KishornThe Crown Estate / ApplecrossEstate Trust / Kishorn Port Ltd
2.75 Distributed
Total Estimated Infrastructure Cost 222.55
Table 2 shows the estimated infrastructure cost for
each site excluding building costs. Depending on marketinterest, the investment in infrastructure at each site can
progress on a phased basis. Sites are grouped by the
clusters set out in Section 3 that relate to offshore wind.
Table 2 Estimated Site Investment Cost Excluding Buildings (Phasing Not Shown)
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12National Renewables Infrastructure Plan Stage 2 Report | Planning Issues
Dredging will need to be considered at those ports and harbours which cannot
currently accommodate vessels of the required draft. Dredging is likely to resultin increased turbidity, with consequent effects on fish, light penetration and
smothering of sediments. Sedimentation patterns along the coast could be affected
which could affect bird feeding areas. Increased vessel movements could also
affect sedimentation patterns.
Mitigation has been considered using the mitigation hierarchy of avoid, reduce, remedy
and/or offset. Measures include:
avoid land reclamation that would encroach on biodiversity interests;
use alternative extant land where habitat losses may result from reclamation and/
or land clearance;
undertake construction work (particularly piling) at times of the year appropriate for
the species in question.
Measures for the mitigation of these adverse effects will need to be integrated into portand harbour planning and design. Consultation with organisations with responsibility
for the environment at an early stage of project development is key to successful
mitigation of adverse effects.
These issues will be addressed through the N-RIP, as required or by the site owner as
they progress their approach.
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13National Renewables Infrastructure Plan Stage 2 Report | N-RIP Funding Approach
6. N-RIP Funding Approach
The investment decision for a site owner is based on their assessment of
future revenues arising from the use of their site by this industry. There area range of beneficiaries from this investment who are seen to be potential
partners in the process.
For developers who hold The Crown Estate leases, investment that creates efficient
installation bases can reduce installation costs and risks. Investment that attracts
manufacturers will help to create a strong and innovative Scottish based supply chain
which will drive down costs through design innovation and increased competition.
For manufacturing supply chain companies (turbines, towers, jackets, blades, cables),
practical locations that have modern fit for purpose quayside and load out capacity
are at a premium in the UK and a finite resource around the North Sea. Investment
by Scottish port owners, with support from the public sector where appropriate will
expand the range of potential locations.
For port and fabrication location asset owners, investment in infrastructure willfacilitate the use of their facilities by the industry and thereby drive lease payments
and port income. Port income will relate to installation processes where items will
be brought into the quayside and then loaded out (requiring in and out handling) and
manufacturing uses where there will be a load out port charge. Where ports are used
for operation and maintenance there is the potential for long term port fees for regular
small vessel uses and planned maintenance uses.
Asset owners and any public sector pump-priming decisions on investment will need to
weigh this range of potential beneficiaries and consider how each may contribute to the
investment needed and the revenue streams arising from investment. Funding support
by the public sector will be focused on securing a sustainable economic impact.
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16National Renewables Infrastructure Plan Stage 2 Report | N-RIP Funding Approach
Support to Jacket Manufacturer BiFab
In spring 2010 BiFab was offered 2m of Regional Selective Assistance by Scottish
Government and a 4m commercial loan from Scottish Enterprise to help finance a
new Jacket production facility at Energy Park Fife, Methil.
At the same time Scottish and Southern Energy Plc (SSE) purchased a 15% stake
in BiFab for a total consideration of 11m to further enhance the companys
competitiveness. In addition, SSE secured an agreement with BiFab for the supply of a
minimum of 50 jacket substructures per annum commencing around 2014 for a periodof 10 to 12 years. BiFab currently has around 350 employees at their Methil facilities
producing 40 structures per year. It is anticipated that the company will more than
treble its annual production to 130 structures a year helped by the Scottish Enterprise
and SSE investment.
BiFabs jacket production facility is located at Energy Park Fife. This location has
already attracted 23m of public sector investment from Scottish Enterprise, FifeCouncil and the European Union to develop infrastructure on the site and support
company growth.
BiFab also operates a facility at Arnish, currently employing 70 people and fabricating
components and sub assemblies for the renewables sector. HIE has invested
15million in the Arnish facility over the last 10 years creating a multi-user site with a
strong renewables focus.
Support to Tower Manufacturer - Campbeltown/Machrihanish
In early 2010 Welcon Towers, a subsidiary of Skykon began a 25m investment at
Machrihanish backed by 9.2m of Regional Selective Assistance and 5.6m from
Highlands and Islands Enterprise. The new buildings will modernise production at
the plant and enable the manufacture of larger turbine tower sections for both the
onshore and offshore renewables market. The investment safeguards 100 existing
jobs and Skykon aims to increase the workforce to 300 over the next two years.
The Local Authority, Argyll & Bute Council with assistance from the EuropeanRegional Development Fund are making an investment of 12million in Campbeltown
harbour which will facilitate the export of larger tower sections and improve
the capability of Campbeltown to respond to future Operations & Maintenance
opportunities.
Case Studies
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17National Renewables Infrastructure Plan Stage 2 Report | N-RIP Total Site Capacity Potential Economic Impact
7. N-RIP Offshore Wind Potential Direct Manufacturing Economic Impact
N-RIP aims to ensure that Scotland can offer a range of locations that can
be developed in a sustainable fashion. To understand the scale of potentialeconomic impact that would arise if sites are developed for manufacturing
use, a high level economic impact model has been developed. This model
sets out gross indicative direct manufacturing jobs only.
Alongside this, Scotland can expect to see significant additional economic impact
arising from the design and development processes for offshore wind, construction/
installation phases and from the associated ongoing operation and maintenance of
the installed offshore wind arrays. In addition to these direct benefits and the benefits
from other core aspects of the industry there will be potential significant indirect and
induced benefits to other sectors such as transportation, material suppliers, service
suppliers such as Health and Safety support and vessel suppliers.
As this industry is still evolving exact direct employment in each type of facility is
difficult to predict. However, based on estimates derived from discussions with supply
chain companies and relating this to employment densities for other similar industries
it is possible to broadly estimate potential direct employment for different kinds of
manufacturing use. As the industry develops, it will be possible to predict the potential
impact with greater certainty. For example, some manufacturers have indicated an
intention to potentially scale up production to a three shift working pattern which would
lead to greater direct employment and increased annual output. This, displacement
and local parameters have not been factored into the current model.
Based on the capacity of the sites it is estimated that Scotland could accommodate at
least five plants for each of the following manufacturing uses nacelle, tower, blade,
jacket. Many of the sites have the potential to serve a range of uses depending on the
environmental impact of these different processes. Table 4 (page 18) gives a broad
estimate of the potential gross direct employment from that scale of use in Scotland.
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18National Renewables Infrastructure Plan Stage 2 Report | N-RIP Total Site Capacity Potential Economic Impact
Notes - Gross Direct employment estimated from market information/employment density for industrial/manufacturing plant use. GVA based on 1
year only presented in 2010 prices. Annual estimates based on the first full year of full operation. 30% optimism bias factor included in line with the
principles of best practice Green Book guidance for risk and uncertainty.
N-RIP shows that, if the market were to grow to this extent, Scotland could be able to provide facilities that would
support a large proportion of the offshore wind supply chain.
If the output of a typical facility is 150 units a year, this suggests that if these uses were based in Scotland then output
would be in the order of 750 units a year.
UK Round 3 and STW leases would require c 7000 wind turbines over the next decade. In addition construction
continues on Round 2 and newly leased Round 2 Extensions. Outwith UK waters, there are growing demand pipelinesthrough seabed leasing off France, Netherlands, Belgium, Germany, Denmark, collectively offering a potential
European market in excess of 80GW.
There is therefore a significant economic opportunity for Scotland to become the home of the offshore wind industry
both in terms of providing the critical infrastructure to ensure timely, economic delivery of offshore projects, and a
commitment by industry and public sector partners to support the development of this new industry for the economic
benefit of Scotland.
Gross DirectEmployment
(Single Facility)Annual GVA
(Single Facility)
Estimated Capacityof First Phase(N-RIP Sites)
Potential TotalGross DirectEmployment
Potential TotalAnnual GVA
Nacelle 120 6.8m 5 600 34m
Tower 327 18.6m 5 1635 93m
Blade 327 18.6m 5 1635 93m
Jacket 262 14.9m 5 1310 74.5m
Total 5180 294.5m
Table 4 Annual Gross Direct Jobs and Gross Value Added (GVA) associated with indicative facilities
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19National Renewables Infrastructure Plan Stage 2 Report | Wave and Tidal - Port Infrastructure Needs
8. Wave and Tidal - Port Infrastructure Needs
Scotlands lead in the development of the wave and tidal energy sector is
demonstrated by the establishment of the European Marine Energy Centrein Orkney, the only grid connected, UKAS accredited, wave and tidal test
facility in the world for fullscale testing, combined with arguably the best
financial support in the world with enhanced Renewables Obligations
Certificates (ROCs) (5 ROCs for Wave and 3 ROCs for Tidal), capital
investment in R&D demonstrated by the recent WATERS 13million awards
and the 10million Saltire Prize. This activity and encouraging environment
has lead to the worlds first commercial scale leasing round and thedevelopment of a new consenting regime, with Marine Scotland to enable it.
In comparison with the offshore wind sector, the wave and tidal energy sector is,
however, in the early stages of development. At present, there are a number of
prototype devices being tested to move towards proving that marine energy converters
can produce electricity at a competitive rate.
As part of N-RIP Stage 2, further consultations were undertaken, following Round 1lease option awards in the Pentland Firth and Orkney waters and building on those
undertaken by HIE in November and December 2009. A list of those consulted is
attached as Appendix 5. Any assumptions made at this point in time are likely to be
subject to considerable change as the technology and sector develops over the next
five years.
As indicated in the N-RIP Stage 1 Report any infrastructure to support the PentlandFirth and Orkney Waters leasing area is the most immediate need. Other lease option
awards for the Saltire Prize and any other future leasing rounds would need analysis
when locations for these become clear. Currently there is a leasing process underway
for a site in the Inner Sound in the Pentland Firth. Award of this site is expected later
in 2010. The areas currently with options for lease for development are highlighted in
Figure 1 on the next page.
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20National Renewables Infrastructure Plan Stage 2 Report | Wave and Tidal - Port Infrastructure Needs
Figure 1: Map of development sites under the Pentland Firth and Orkney Waters Leasing Round
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21National Renewables Infrastructure Plan Stage 2 Report | Wave and Tidal - Port Infrastructure Needs
For the purposes of this report the time periods have been divided into three periods:
2010-2015 immediate needs being for deployment of devices at EMEC and other
testing facilities, before moving on to the deployment of small scale arrays, both at
sites identified under the Pentland Firth and Orkney Waters leasing round, as well
as any other future leasing rounds, and at other locations identified by developers
themselves. Up to 50MW is planned for deployment on known sites, including those
in the Pentland Firth and Orkney Waters leasing area in this initial five years period,
the bulk of this likely in 2015.
2016-2020 assuming the continuing progression of technology development and
subject to the necessary grid infrastructure being in place, the industry should
be moving towards deployment of arrays of over ten devices using established
installation techniques. 1,150MW (plus the Inner Sound, anticipated to be 200MW
to 500MW) is planned on known sites during this period, primarily in the Pentland
Firth and Orkney Waters leasing area. Further the Saltire Prize is aimed to
incentivise at least two years commercial production of electricity from wave andtidal technologies by June 2017.
2020 onwards operations and maintenance of installed devices.
Figure 2 below illustrates the aggregate installation proposed under lease agreements
for the Pentland Firth and Orkney Waters leasing round. These dates for capacityinstallation are the deadlines under lease agreements and so deployment will
potentially anticipate this schedule.
Figure 2 Wave and Tidal Build Out Timescales
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23National Renewables Infrastructure Plan Stage 2 Report | Wave and Tidal - Port Infrastructure Needs
Planned port developments to support Medium and Longer Term Activity
All ports in both Caithness and Orkney that could host or are already hosting deployment
activity have development plans with at least guideline costs for expansion of existing
facilities. Lead times vary, but three years to delivery, including obtaining planning
permissions and financing should be allowed for, and hence developer input on
requirements for larger scale deployments scheduled from 2017 onwards will need to
be determined by 2012-2013 at the latest and work needs to begin by 2014 at the latest.
Therefore, some decisions on port development and use may have to be made beforethere is any specific certainty in the market in order to meet the deployment timetables
as they are currently planned.
Providing deepwater quay space and cranes at deployment sites will increase the
number of technologies that will be successfully able to deploy, to include those that
have not designed around minimal infrastructure.
Quay space and cranes at deployment sites could enable manufacture and fabrication
to happen further afield from the lease sites as devices can be transported over a
greater distance by barge than wet towing. Moving on from this, delivery to deployment
sites in batches will create a greater need for laydown areas at both fabrication and
deployment sites.
The N-RIP Stage 2 analysis indicates that a range of locations could support wave and
tidal installation, fabrication and ongoing operations and maintenance. There will intime be a need for locations to support these uses, both in the initial Pentland Firth and
Orkney Waters leasing area, and other areas that may be leased in future around the
Scottish coast. These potential locations are shown in Appendix 6.
Under the auspices of the Pentland Firth and Orkney Waters Delivery Group,
comprising The Crown Estate, the Scottish Government, HIE, Local Authorities and
the developers, work to refine these locations and investment opportunities will beundertaken as developer requirements become clear in the next phase of work.
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25National Renewables Infrastructure Plan Stage 2 Report | Conclusions and Recommendations
Wave and Tidal Infrastructure
The report concludes that there will be a need for investment by port owners in
various locations to make sites ready for this industry in the future. The specifics of
the port infrastructure required in the medium term for large scale deployment will
be developed by the Pentland Firth and Orkney Waters Delivery Group with knowledge
from the port sector and proposals for potential port development informing the
development of deployment and operations and maintenance plans. SDI will continue
to market the investment potential of port facilities servicing this sector.
The Crown Estate will shortly commission work to detail the Build Out story of
the Pentland Firth and Orkney Waters leasing programme by November 2010 in
partnership with Scottish Government, HIE and Local Authorities. This will be used to
help further collective understanding of opportunities and to help construct business
cases for investment.
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Appendices
Appendix 1............................................N-RIP Delivery Group Membership
Appendix 2 .................................................................Port Cluster Mapping
Appendix 3..........................................N-RIP First Phase Sites Information
Appendix 4..................................................................... Sources of Finance
Appendix 5.................................. Wave and Tidal Stage 2 Consultation List
Appendix 6 ............................................Wave and Tidal potential locations
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28National Renewables Infrastructure Plan Stage 2 Report | Appendix 2
Appendix 2 - Port Cluster Mapping
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39National Renewables Infrastructure Plan Stage 2 Report | Appendix 3
Quayside Length/ Weight Bearing - Cargo handling
capability over 130m single straight edge quay that
can accommodate up to 3500 DWT vessels and 1 x
150 metres straight edge and 2 x 80 metres straight
edge.
Planning Status - This site is currently recognised
in the Highland Structure Plan as having potential
for oil and gas related development for the Atlantic
Frontier and appears on the Wester Ross Local Plan,which was adopted 2006.
Potential Offshore Renewables Infrastructure Role:
Kishorn lends itself to offshore wind manufacturing,
assembly and fabrication, operations and maintenance
and decommissioning. It also has the added feature of
concrete casting facility on site, if concrete gravity base
structures or concrete casings are required.
Market Use and Interest: In the last 8 months the
facility at Kishorn has had interest from 4 developers. It
has also been put forward for consideration for Offshore
Wind, Wave and Tidal Energy uses.
Infrastructure Development Requirement: The sitecurrently comprises:
A slipway and dry dock deep approximately 150m in
diameter.
Large pre-casting yard and 26 hectares of hard
standing and lay down areas.
Four deepwater quays.
On site concrete batching facility with 1.5milliontonnes of concrete.
Craneage and dock handling facilities.
Warehousing 4000 pallet dockside warehouses.
Sea freight services to the fish feed, forestry and oil
related industries.
On site quarry for supply of concrete aggregates.
Welding & fabrication workshops adjacent to site.
Kishorn Port Limited is in the process of developing a
masterplan for the port which includes costings for:
Strengthening the existing quays and lay down
areas.
Opening up the dry dock and slipway.
Erecting of sheds for manufacture, and operations
and maintenance.
Deepening of the water channel and improving the
on-site support services.
Further quay facilities achieving deeper water i.e.possibly up to 20 metres.
Delivery Approach: The anticipated delivery programme
is being considered by the owners with key next steps
being progressing detailed planning processes and site
development investment phasing.
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Appendix 5 - Wave and Tidal Stage 2 Consultation List
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44National Renewables Infrastructure Plan Stage 2 Report | Appendix 5
Appendix 5 Wave and Tidal Stage 2 Consultation List
The following were consulted:
Aquamarine
EON Climate and Renewables
Pelamis
Marine Current Turbines
Scottish Power Renewables
SSE Renewables Developments
Open Hydro Site Development
Powerbuoy (OPT)
Tidal Generation Ltd
EMEC
Appendix 6 - Wave and Tidal potential locations
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45National Renewables Infrastructure Plan Stage 2 Report | Appendix 6
Appendix 6 Wave and Tidal potential locations
Front cover image courtesy of Calum Davidson
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National Renewables Infrastructure Plan
Scottish Enterprise
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Helpline: 0845 607 8787
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