OffshoreWindNetZeroInvestmentRoadmapMarch2023Leadingthewaytonetzero2OffshoreWindNetZeroInvestmentRoadmap:Leadingthewaytonetzero■OffshorewindisanestablishedandprovenpartoftheUKenergymixandissettobecomeevenmoreimportantinthefuture.Itwillplayakeyroleindecarbonisingourpowersystemby2035andhelpingtheUKachievenetzeroby2050.■WiththehighestdeploymentinEurope,wehaveprovedthatoffshorewindcanbedeliveredateverincreasingscalewhilstdecreasingthecoststoconsumers.■TheUKhasaworld-leadingambitiontodeployupto50GWby2030,withupto5GWcomingfromfloatingoffshorewind.■InvestorsfromallovertheworldarealreadybenefittingfromthecertaintythattheUKoffshorewindmarketoffers.Ourlong-termambitionsmeansignificant,newinvestmentopportunitiesforprivatecapitalinwindfarms,transmissioninfrastructure,portinfrastructure,newmanufacturing,andservices.Accesstocheap,abundantandreliableenergyprovidesthefoundationforathrivingeconomywithourhomesandbusinessesrelyingonittodeliverourfutureprosperity.Alreadyhometothe1st,2nd,3rdand4thlargestoperationaloffshorewindfarmprojectsintheworld,wearecementingourpositionasamongstthemostattractiveplacesintheworldforinvestinginoffshorewind.TheUKisleadingthechargetowardsanetzero,nature-positivefutureRtHonGrantShappsMP–SecretaryofStateforDepartmentforEnergySecurityandNetZero■Open,liberaleconomy■Stableregulatoryregimewithindependentlegalsystem■Globallycompetitiveandtransparenttaxregime■GenerousR&Dandpatenttaxrelief■TheUK-EUTradeandCooperationAgreementallowszerotariffmarketaccesswiththeEU■Flexiblelabourmarket■WorldclassprofessionalservicessectorsupportingbusinesseswithinsuranceandfinanceReferences:1Dealroom,2EYAttractivenessSurveyJune2022Attractiveness,3Z/YenGlobalGreenFinanceIndex2022(GGFI10),4DHLGlobalConnectednessIndex2021,5Officialstatisticsconvertedatmarketexchangeratesasasource;6Workforcetrends(2022);7UKInnovationStrategy(2021)TheUKhasoneoftheworld’smostattractivebusinessandinvestmentenvironments3OffshoreWindNetZeroInvestmentRoadmap:Leadingthewaytonetzero£22bncommittedtoraiseR&Dto2.4%ofGDP71stforinstalledoffshorewindcapacityinEurope,2ndgloballyEngineeringemploys5.6mnpeople6c.50%ofallEuropeanoffshorewindinstalledcapacity(2010-2020)1stinG20asagloballyconnectedeconomy45thLargesteconomy51stRankedbestglobalgreenfinancecentre32ndinEuropeforFDIattractiveness2£1bnFundingforNetZeroInnovationPortfolio1stinEuropeforvalueofstart–up&scale–upecosystem14OffshoreWindNetZeroInvestmentRoadmap:LeadingthewaytonetzeroWhyinvestinUKoffshorewind?AsectorwithambitioustargetsandmajoropportunitiesforgrowthUpto£160mnUpto50GWUKdeploymentby2030Upto5GWofnewfloatingwindprojectsby2030ClimateChangeCommitteeestimates[1]upto125GWcouldbeneededby2050FloatingOffshoreWindManufacturingInvestmentScheme[1]ClimateChangeCommittee(2020),TheSixthCarbonBudget:TheUK'spathtoNetZero■Longtermvisionwithanambitionofupto50GWoffshorewindcapacityby2030,includingupto5GWoffloatingoffshorewind,andacommitmenttoshortendevelopmenttimescalesforfutureprojects.■UKgeographywellsuitedtooffshorewinddeployment.■SuccessfultrackrecordofGovernmentandindustryworkinginpartnershiptobuildthesectorthroughtheOffshoreWindIndustryCouncil,ajointgovernment-industryforum.■Establishedandexperiencedregulatoryregimecoveringthewholeoffshorewindprojectlifecycle,fromleasing,toconsenting,tooperationanddecommissioning–withactionsunderwaytoacceleratethepipelineandmeetourambitions.■Clear,bankablesupportregimeofferingreliableandlegallysecureincomefornewdevelopmentsthrough15-yearContractsforDifferencewithagovernment-ownedcounterpartyawardedthroughcompetitiveannualauctions.■CommercialPPAs:offshorewindprojectsarebeginningtoproceedonthemerchantmarket.■Stable,regulatedreturnsforinvestmentsinoffshoretransmission.■Enablinginfrastructuresuchasgrid,supplychainandportsinvestment,withsupportivegovernmentschemes.■LeadingUK-basedcompanies,includingtwooftheworld'sleadingturbineoriginalequipmentmanufacturers,plushundredsofothercompanies,toanchoragrowingsupplychain.UKoffshorewindcapacityhasgrownsignificantlyoverthelastdecade50123456789101112131420122013201420152016201720182019202020212022UKoperationaloffshorewindcapacity(GW)■TheUK’sinstalledcapacityhasincreasedrapidlyoverthelastdecade.■Thereis13.8GWofoffshorewindcapacityalreadyintheUK,enoughtopowerover10millionhomes.■Currentdeploymentisover4timeshigherthanthecapacityinstalledin2012.■Thecostperunitofoffshorewindhasfallenbyalmost70%from£119.89to£37.35/MWhsincethefirstContractsforDifferenceallocationroundin2015.1■TheUKcurrentlyhas78MWfloatingoffshorewindoperational–theHywindScotland(30MW)andKincardine(48MW)projects.1.Quotedin2012prices.OffshoreWindNetZeroInvestmentRoadmap:LeadingthewaytonetzeroSource:EnergyTrends:Renewableelectricitycapacityandgeneration(ET6.1-quarterly),uptodateasofQ32022.OffshoreWindNetZeroInvestmentRoadmap:LeadingthewaytonetzeroTheknownpipelineofoffshorewindfarmprojectsshowssignificantpotentialforgrowthandinvestmentFixed-bottomandfloatingoffshorewindpipeline■Thereisaround78GWofoffshorewindcapacityintheUKpipeline.■Around60%ofthispipelineisfixedbottomand40%isfloating.■Wehave6.4GWinconstruction,duetocomeonlinebythemid-2020s,andafurther7.6GWisnowfinalisingprocurementandpreparingforconstruction.■CrownEstateScotlandawardedrightsfor27.6GWofnewcapacitythroughtheScotWindleasinground.TheInnovationandTargetedOilandGasRound(INTOG)couldaddafurther5.4GWoffloatingwindcapacity.■Afurther4GWareexpectedtocomethroughtheCelticSeafloatingwindleasinground.Source:DepartmentforEnergySecurity&NetZeroAnalysisFootnotes:Operational&underconstructionuptodateasofQ32022,committed->pre-planningapplicationuptodateasofQ12023,futureuptodateasofQ32023.FuturecapacityisbasedonpotentialseabedtobeleasedviaTheCrownEstateCelticSeaandINTOGleasingrounds.60102030405060708090100OperationalUnderConstructionCommittedConsentedPlanningSubmittedPre-PlanningApplicationFutureTotalCurrentOffshoreWindPipeline(GW)FixedFloating13.86.47.65.18.241.49.491.9WorldleadingpolicyandregulationsIncreasedourambitionforoffshorewinddeploymenttoupto50GWby2030,includingupto5GWoffloatingoffshorewind.Worldleadingmarketpolicyandmarketframework,runningfourContractsforDifference(CfD)auctionsin7yearstosupportlow-carbonelectricitygeneration.AnnualCfDauctionsfrom2023onwardsstartingwithAllocationRound5openinginMarch2023.ConsideringtheuseofNon-PriceFactorsasareformtotheCfDscheme.Radarmitigation–WorkingwiththeOffshoreWindIndustryCouncilandMinistryofDefencetoputinplacesuitablemitigationthataddresseschallengeswithradarinterferencefromoffshorewindturbines.LeasingroundsdeliveredbyTheCrownEstateandCrownEstateScotlandgivingopportunitiestonewentrants,withfurtherseabedleasingroundsplannedincludingforfloatingwindintheCelticSea.7OffshoreWindNetZeroInvestmentRoadmap:LeadingthewaytonetzeroPhotobyShaunDakinonUnsplashSupportivepolicyandregulatoryenvironmentDeliveringastrategicnetworkLaunchedtheOffshoreTransmissionNetworkReviewin2020toreviewthewaythattheoffshoretransmissionnetworkisdesignedanddelivered,consistentwiththeambitiontodelivernetzeroemissionsby2050.Publishedarecommendeddesignfortheconnectionofoffshoreinscopewindfarmsto2030(HolisticNetworkDesign),outliningasingle,integratednetworkconnecting23GWofoffshorewindprojects,thefirststeptowardsmorecentralised,strategicnetworkplanning.PreparingaHolisticNetworkDesignFollowUpExercise,outliningasingle,integratednetworkconnectingafurther21GWofoffshorewindprojects.Ofgempublisheditsdecisiononacceleratingonshoretransmissioninvestment.Thisdecisionstreamlinesregulatoryandfundingapprovalsandwillinitiallyapplyto£20billionofinvestment.WorkingincollaborationwithindustryAppointedElectricityNetworksCommissionertoadvisebyJune2023onhowthedevelopmentprocessfortransmissioninfrastructurecanbereduced,initiallybythreeyearsbutultimatelybyahalf.OffshoreWindSectorDeal–industryandgovernmentcollaborationtodrivelow-cost,low-carbonenergy,andtheproductivityandcompetitivenessoftheUKsupplychain.DevelopedanddeliveredinpartnershipwiththeOffshoreWindSectorCouncil.EstablishedtheOffshoreWindAccelerationTaskforceandappointedtheUK’sOffshoreWindChampiontospearheadtheworktoacceleratenewoffshorewindprojects.8OffshoreWindNetZeroInvestmentRoadmap:LeadingthewaytonetzeroPhotobyShaunDakinonUnsplashRegulatoryreformforournetworkStreamliningtheplanningprocessTakingforwardmeasurestostreamlinetheplanningprocessandacceleratedeploymentofoffshorewindaspreviouslyannouncedintheBritishEnergySecurityStrategy.TheseincludethecreationofaFastTrackconsentingprocessforNationallySignificantInfrastructureProjects.Publishedacross-governmentNationallySignificantInfrastructureProject(NSIP)ActionPlan,whichsetsouthowthegovernmentwillreformtheNSIPconsentingprocesstoensuretheplanningsystemcandeliverforthefuture,whichoffshorewindprojectswillbenefitfrom.UpdatingtheEnergyNationalPolicyStatements(NPS):workisongoingtoamendtheNPSstoensuretheyreflecttheimportanceofenergysecurityandnetzero,theroleofoffshorewindindeliveringthemandstrengthenthepriorityofrenewableenergyinfrastructure.RevisedNPSswillbereconsulteduponandpublishedinduecourse.Puttinglegislationinplacetostreamlinetheoffshorewindconsentingprocess:throughtheEnergyBill,wewillintroducetheOffshoreWindEnvironmentalImprovementPackage,includingregulationstoadaptenvironmentalassessmentsforoffshorewind,enablestrategiccompensationandintroduceMarineRecoveryFunds.NonlegislativechangesinvolvingthedevelopmentofOffshoreWindEnvironmentalStandardsandstrategicmonitoring.ImplementinganewFastTrackconsentingprocessviapowersintheLevellingUpandRegenerationBill,asreformssetoutintheNSIPReformActionPlan,whichoffshorewindprojectswhichmeetthenecessaryqualitycriteriawillbeabletobenefitfrom.9OffshoreWindNetZeroInvestmentRoadmap:LeadingthewaytonetzeroPhotobyShaunDakinonUnsplashAplanningsystemthatsupportsdeployment10OffshoreWindNetZeroInvestmentRoadmap:LeadingthewaytonetzeroPhotobyShaunDakinonUnsplashGovernmentsupportforoffshorewindinvestmentSupportedinfrastructureEightfreeportsinEngland,twogreenfreeportsinScotlandandtwofreeportsinWales,includingmeasuressuchas:taxrelief,businessratesretention,customs,regeneration,innovationandtradeandinvestmentsupport.FinancialsupportCapitalallowancesupport:Asannouncedinthe2023SpringBudget,Governmentisintroducingaseriesofeconomy-widecapitalallowancemeasuresfromwhichoffshorewindprojectscanbenefit.InvestmentzonesextendedacrosstheUK.TheInvestmentZoneprogramme,designedtoempowerlocalplacesandgrowtheeconomy,willfurtherbenefitfromanewpackageoftaxreliefsasannouncedinSpringBudget.Thesetaxreliefswillbringforwardnewinvestmentbyreducingthecostofdoingbusiness.InnovationsupportInnovativefloatingoffshorewinddemonstrationprogramme–with£31milliongovernmentfundingand£30millionofindustrymatchfunding.SupportingtheFloatingOffshoreWindCentreofExcellence–providing£2millionadditionalfundingover4years.OffshoreRenewableEnergyCatapult(OREC).ORECdeliversproductsandserviceswithindustryinresearch,innovation,testinginnovationandsupplychaingrowth.Jouleprogramme–£5milliontoORECandtheNationalCompositesCentretoincorporateadvancedcompositesintonextgenerationwindturbinecomponents.WindfarmMitigationforUKAirDefenceradarcompetition–£14.15millioninPhase3,buildingon£5.9millioninPhases1&2.11OffshoreWindNetZeroInvestmentRoadmap:LeadingthewaytonetzeroPhotobyShaunDakinonUnsplashGovernmentsupportforoffshorewindinvestmentSkills&capabilityOurpoliciesandproposalsforgrowingtheoffshorewindsectorinlinewithour50GWambitioncouldsupportupto90,000directandindirectjobs.WearesupportingInstitutesofTechnologyacrossEnglandwith£120millionforinstitutesspecialisingindeliveringhightechnicaleducationanddevelopinggreenskills.WearereformingtheskillssystemthroughLocalSkillsImprovementPlans.WehaveinstitutedaLifetimeSkillsGuaranteesupportingworkersgaintheskillstheyneedtotransitiontothegreeneconomy,includingthroughtargetedsupportforretraining.InEngland,DfEisinvestinganadditional£3.8billioninskillsby2024-25.Thisincludesfundingforprogrammestosupportgreenskills,includingapprenticeships,TlevelsandSkillsBootcamps.FreeCoursesforJobssupportseligibleadultstogainhighvalueLevel3(Alevel-equivalent)qualifications,manyofwhichcanhelpthemtotransitiontoorspecialiseinrolesinthegreeneconomy.TheGreenJobsDeliveryGrouphasbeenestablishedasthecentralforumthroughwhichgovernmentandindustryareworkingtogethertoacceleratethesupplyofaskilledworkforceforourlowcarbonsectorsandhydrogenisincludedaspartofthegroup'sworkplan.TheNorthSeaTransitionDealhasdevelopedanintegratedPeopleandSkillsPlantoensurethehighlyskilledoilandgasworkforcewithskillstransferabilitytoadjacentenergysectorscanbedeployedtodevelopouroffshorewindindustry.ProvisionssuchasSkillsBootcamps,FreeCoursesforJobs,HigherTechnicalQualificationsandapprenticeshipswillupskillmoreworkerstolowercarbonemissions.Forexample,theMaintenanceandOperationsEngineeringTechnician,whichoffersaWindTurbineTechnicianoccupationalspecialism.12OffshoreWindNetZeroInvestmentRoadmap:LeadingthewaytonetzeroPhotobyShaunDakinonUnsplashGovernmentsupportforoffshorewindinvestmentStrengthenedthesupplychain■OffshoreWindManufacturingInvestmentSchememadefundingavailabletosupportinvestmentinmajorportandmanufacturinginfrastructure.Throughthescheme,wehavebeenabletoannouncemajorinvestmentsthathelpdelivereconomicgrowth,supplychaindevelopmentandenergysecurity.■SupplyChainPlanpolicyrequiresprojectsover300MWandallfloatingoffshorewindprojectstocommittoaseriesofactionstostrengthentherenewableenergysupplychainintheUKandEuropebeforetheycancompeteinaCfDauction.Supportingmoreinfrastructure■Upto£160millionFloatingOffshoreWindManufacturingInvestmentSchemetosupportinvestmentintheinfrastructureneededforcommercialscaledeploymentoffloatingoffshorewind.■TheUKInfrastructureBankcaninvestacrossthecapitalstructure(seniordebt,mezzanine,firstloss,debtguaranteesandequity)tohelpcrowdprivatefinanceintonetzeroinfrastructure.TheBankhasidentifiedportsandfloatingoffshorewindasinvestmentopportunitiesandisinterestedtohearfromenablinginfrastructureprojectsinparticular.■UKExportFinanceprovidesenhancedsupportforsupplychaininvestmentthroughtheExportDevelopmentGuaranteeandoffersarangeoffinanceproductstogrowexportsonceestablishedintheUK.13OffshoreWindNetZeroInvestmentRoadmap:LeadingthewaytonetzeroPhotobyShaunDakinonUnsplashGovernmentsupportforoffshorewindinvestmentExpandingourexportsupport■InternationalTradeAdvisors:onceestablishedintheUKthereisthepotentialforone-to-onesupportondevelopingyourexportstrategy.■ExportSupportService:onceestablishedintheUK,youcanaskanyquestionforyourbusinessonexportstoencouragegrowth,forexampleonexportingtonewmarkets,paperworkyouneedtosellyourgoodsabroadandrulesforaspecificcountrywhereyouwanttosellservices.Collaboratedwithindustry■EstablishedaSupplyChainandInfrastructureWorkingGroupaspartoftheOffshoreWindAccelerationTaskforcetoidentifyanddevelopactionstoaddressbarrierstoinvestmentandbuildresilienceinthesupplychain.■EstablishedtheFloatingWindTaskforcetotacklebarrierstodeploymentandenablecollaborationinfloatingoffshorewind,creatingtherightenvironmentforinvestmentandbuildingtheUK’sexpertiseinthissector.Offshorewindfarmprojectinvestment14Over£50bninconstructioncapitalexpenditureneededtobuildoffshorewindfarmsintheUKby20301Examplesofprojects:Hornsea2Ørstedhassignedanagreementtodivesta50%ownershipstakeinits1.3GWHornsea2OffshoreWindFarmintheUKtoaconsortiumcomprisingAXAIMAlts,actingonbehalfofclients,andCréditAgricoleAssurances.DetailshereDoggerBankA,BandCDoggerBankAandBisajointventurebetweenSSERenewables(40%),Equinor(40%)andVårgrønn(20%).On2November2021SSEandEquinorannouncedtheselldownofacombined20%shareinDoggerBankCtoVårgrønn(10%each)foratotalconsiderationof£140million.DetailshereMorayEastMorayEastisanoffshorewindprojectlocatedintheouterMorayFirth,offthenorth-eastcoastofScotland,andisajointventureownedbyDiamondGreenLimitedandCTGandOceanWinds.DetailshereInvestmentopportunities:■Projectconceptiontoacquiringaseabedleasefordevelopment■Sitedevelopmenttoconsentandpermitting■Construction■Operation(resaleandrefinancing)■Decommissioning■Throughoutthelifecycleopportunitieswillexistfordebtandequityfinancetoenter■Opportunityforsecondaryinvestmentindevelopedprojects1.SeeappendixAforfurtherdetails.Doesnotincludeoffshoretransmissioncapitalexpenditure,operationalexpenditure,decommissioning,developmentcostsoranyassociatedinvestmentinsupplychainsandinfrastructure.Quotedin2021prices.;£50billionincludesinwardandoutwardinvestmentOffshoreWindNetZeroInvestmentRoadmap:LeadingthewaytonetzeroManufacturingsupplychaininvestment15OffshoreWindInvestmentOpportunities■Inter-arrayandexportpowercable■Towers■Monopilefoundations■Transitionpieces■Transformers■Blades■Nacelles■Specialistoffshorelogisticsandinstallationvessels■TiertwoplussupplychainmanufacturingFloatingOffshoreWindInvestmentOpportunities■Floatingsubstructureassemblyandmanufacturing■Mooringandanchoringsystems■Dynamicinter-arraypowercables■SpecialistfloatingoperationsandmaintenancevesselsSeemoreonhigh-potentialopportunitiesformanufacturinginvestmentExamplesofprojects:SeAHWindSouthKorea’sSeAHWindhaveannouncedtheirinvestmentofover£400millionintoaXXLmonopilefoundationmanufacturingfacilityinTeesside.Thiswillbeoneoftheworld’slargestmonopilemanufacturingfacilitieswiththepotentialtosupplycirca150monopilesannuallyandcreateupto800jobsby2030.DetailshereJDRCableSystemsJDRCableSystemsareinvesting£130millioninaworld-classhighvoltagesubmarinecablemanufacturingfacility,whichwillbefullyoperationalby2024.Theprojectwillcreate170jobsinBlyth,aswellassafeguardingafurther270jobsatJDR’sexistingfacilityinHartlepool.DetailshereSiemensGamesaRenewableEnergySiemensGamesaRenewableEnergyhaveinvested£186milliontoexpandtheirblademanufacturingfacilityinHulltoenablethemanufacturingofthenextgenerationofwindturbineblades.Theprojectwillcreateandsafeguardaround1080jobs.DetailshereOffshoreWindNetZeroInvestmentRoadmap:LeadingthewaytonetzeroEnablinginfrastructureinvestment16Investmentopportunities:■Portsideinfrastructuretosupportthemanufacturing,installation,operationandmaintenanceoffixedfoundationoffshorewindturbines.■Large-scale,deepwaterportsforthefabrication,assembly,storageanddeploymentoffloatingoffshorewindturbines.■Operationsandmaintenancebasesandrelatedinfrastructure.■Highvoltagepowercablemanufacturingforinterconnection.■FutureOffshoreTransmissionOwner(OFTO)TenderRoundstobidfornewlybuiltandcommissionedOFTOassets,whichconnectanoffshorewindfarmtotheUKonshoretransmissionsystem.Seemoreonhigh-potentialopportunitiesforinfrastructureinvestmentExamplesofprojects:TeesworksTeesworksisconstructingalarge-scalesiteformanufacturinginfrastructure.Thesiteismorethan200hainsizewithphase1deliveringaquaythatisover450minlength.ThesitehasalreadysecuredmanufacturinginvestmentfromSeAHWindwhichwillbuilditsnewmonopilefactoryatthesite.DetailshereOperations&MaintenanceBaseonPortofTyneThe3.6GWDoggerBankWindFarmisajointventurebetweenSSERenewables,EquinorandVårgrønn.EquinorandthePortofTynehaveinvestedinanewquayandOperations&MaintenanceBasefortheproject,onthesiteofadisusedoil&gasfabricationyard.Thiswilldirectlycreateupto400skilledjobs,withover2,000jobscreatedorsupportedthroughouttheproject.NorthStarRenewableswillprovidefourServiceOperationVesselsthatwilloperateoutoftheport.DetailshereOffshoreWindNetZeroInvestmentRoadmap:LeadingthewaytonetzeroStrengtheningsupplychaincapabilityacrossbothfixedbottomandfloatingoffshorewind,attractingnewinvestmentandfacilitatingexportopportunities.InvestmentJourneyintheUKandUKGovernmentSupport1.Earlyengagement•SectorteamsinDepartmentforBusinessandTrade(DBT)andDepartmentforEnergySecurityandNetZero(DESNZ)liaisewithpotentialinvestorstohighlightuniqueopportunitiesintheUK.•InternationalengagementfromDBTandFCDOnetworkensuresglobalbusinessescaninvestsuccessfullyintheUK.Theirglobalreachcoversmorethan100marketsthroughouttheworld.5.Goingglobal:InternationalTradeAdvisers(ITAs)•Expert,firsthandsupporttodevelopafirst-classexportstrategytosuccessfullyenteroverseasmarketsorexpandanddiversifyintonewmarkets.•Bespokeadviceonsuitabilityforspecificinternationalmarkets,routetomarket,businessvisionandgoals.3.Benefitfrompioneeringcentresofexcellenceandsupportiveindustryclusters•AccesstoanecosystemofindustryclustersthatencouragecollaborationandconnectivitytotheUKandrestoftheworld.•Accesstoleadingresearchcentres,suchastheOffshoreRenewableEnergyCatapult(OREC).InvestorscanbenefitfromOREC,whodeliverproductsandserviceswithindustryinresearch,innovation,testinginnovationandsupplychaingrowth.4.Exploreexportopportunities:UKExportFinance(UKEF)•UKExportFinance,theUK’sexportcreditagency,hasenhanceditssupporttoattractinvestmentintofixed-bottomandfloatingoffshorewindsupplychainsandexportcapability.•ThroughitsoverseasnetworkandworkingalongsideDBTandFCDO,UKEFisbuildingapipelineofexportopportunitiesforUKsupplychains.2.LandingintheUK•SectorteamsfromDBTintheUKandgloballyandDESNZprovidereliableindustryinsightsinarapidlyevolvingmarket.•WesupportinvestorstotakeFinalInvestmentDecision(FID)intheUK,facilitatingintroductionsandadviceonpotentiallocationsforinvestment.•InvestmentServicesTeam(IST)inDBTdirectlydeliversandconnectsinvestorstoawiderangeofsupportservices–fromtaxadvicetobespokemarketresearch.QuestionsaboutyourinvestmentjourneyorhowtheUKgovernmentwillsupportyou?UKbusinessescancontactushere.Internationalbusinessescancontactushere.OffshoreWindNetZeroInvestmentRoadmap:Leadingthewaytonetzero1718OffshoreWindNetZeroInvestmentRoadmap:LeadingthewaytoNetZeroLifecycleofanoffshorewindfarmandinvestmentopportunities1EarlystageDevelopmentConstructionandInstallationPackagesofworkExamplesofsuppliersCostOperationsandMaintenanceDecommissionAround£50millionfor1GWfarmAround£50millionfor1GWfarmAround£2.5-3billionfor1GWfarmAround£75millionperannumfor1GWfarmAround£300millionfor1GWfarm•Energysectorassessment•Environmentalassessment•Marinespace•Surveys•Consenting•Finance•Legal•Insurance•EngineeringCoversactivitiesuptopointoffinancialclose,including:•Securingplanning•Consents•Environmentalimpactassessments•InfrastructureassessmentAndactivitiesrequiredtodefine:•Design•Engineering•Procurement•Turbineandfoundationtypeandfabrication•Arraypowercableandexportcablefabrication•Offshoresubstationfabrication•Transportandinstallationofcomponents•Assemblyportandcommissioning.•Supportingtheongoingoperationofthewindturbines,balanceofplantandassociatedtransmissionassets•Ensuringsafeoperations,maintainingphysicalintegrityofwindfarmandoptimisingelectricitygeneration•Removalormakingsafeofoffshoreinfrastructureattheendofitsusefullife,plusdisposalofequipment•Properlyfinanceddecommissioningplanstypicallyarerequiredaspartofgainingplanningapprovaltoconstructthewindfarm•Consultancies:e.g.ABPmer,Arup,Xodus,Wood,Everoze,OWC•Lawfirms:e.g.CliffordChance,Linklaters,EvershedSutherland•Banksandcreditagencies:e.g.UKExportFinance,StandardChartered,M&G,HSBC•Insurancecompanies:e.g.Aon,Beazley,Gcube•Environmentalassessment:e.g.Atkins,ERM,Everoze•Projectandprocurementmanagement,specialistengineeringcompanies:e.g.Atkins,Arup,Everoze,OWC,Xodus,ITPEnergised,Osbit,TurnerandTownsend•Surveycompanies:e.g.VenterraGroup,OWC,Acteon•Navalarchitectureandmarinemanagement:e.g.SMC,Chartwell,ABPmer•Blademanufacturers:e.g.SiemensGamesaandVestas•Cables:e.g.JDRCableSystems•Monopiles:e.g.SeAHWind•Transitionpieces:e.g.Smulders•Installation:e.g.Subsea7andSeajacks•Fabricationandassemblyport:e.g.HullGreenport,PortofNigg•Assetmanagementcompanies:e.g.Atkins,Onyx,Synaptic,EDS,Xceco•Windfarminspectionmaintenanceandrepaircompanies:e.g.JamesFisher,GlobalEnergyGroup,CorrellGroup•Marinecompanies:e.g.NorthStar,Bibby,HST,SeaCat•Combinationofassetmanagers,marine,specialistengineeringandinstallationcompanies18OffshoreWindNetZeroInvestmentRoadmap:Leadingthewaytonetzero1.CostssourcedfromORECatapult:Guidetoanoffshorewindfarm(2019):https://guidetoanoffshorewindfarm.com/wind-farm-costs.Basedonatypical1GWprojectusing10MWturbineswithfirstoperationdateof2022,quotedin2018prices.192025203020212035TheCrownEstatetoholdtheCelticSealeasingroundforfloatingoffshorewindprojectsCfDAllocationRound4–7GWofnewfixedbottomprojects&32MWnewfloatingwindScotWindleasinground–27.6GWofnewprojectsGovernmentreleasestheNetZeroStrategyPublicationofFutureFrameworktosignalpolicydirectionforamorestrategicapproachtodeliveringoffshorewindandassociatedtransmissionBritishEnergySecurityStrategyannouncedbyGovernmentwithgreateroffshorewindambitionAchieveafullydecarbonisedelectricitysystem,subjecttosecurityofsupplyReachanambitionofupto50GWoffshorewind,includingupto5GWoffloatingoffshorewind202220242023CfDAllocationRound5opens(startofannualauctions)CfDAllocationRound6opens(furtherroundsannually)PublicationofHolisticNetworkDesignStrengthentheEnergyNationalPolicyStatementstoreflectimportanceofenergysecurityandnetzeroFast-trackOffshoreTransmissionNetworkReviewplanningpilotslaunchApplicationsopenedforCrownEstateScotlandINTOGleasingroundforoil&gasdecarbonisationprojectsFLOWMISRequestforInformationgoesliveDeliveryofBritishEnergySecurityStrategymeasuresAnnualContractforDifference(CfD)auctionsCfDAllocationRoundspre-2021:AR1in2015AR2in2017AR3in2019FloatingOffshoreWindManufacturingInvestmentScheme(FLOWMIS)(upto£160million)FloatingOffshoreWindDemonstrationProgramme(£31million)OffshoreWindManufacturingInvestmentScheme(OWMIS)Our2035deliveryplanOffshoreWindNetZeroInvestmentRoadmap:LeadingthewaytonetzeroINTOGprojectsofferedexclusivityagreementsFLOWMISlaunchedFastTrackConsentingprocessforoffshorewindFurtherwayswehelpyouinvestanddevelopintheUK20Visitgreat.gov.ukHelpfulguidesGuidanceonexpandingtotheUK,includingvisasandmigration;taxandincentives;regulatoryandbusinessplanning;staffrecruitment,retentionandtraining;andimmigration.OfficeforInvestment(OFI)OfIisajointDBTandNo.10teamthatprovidesasinglefrontdoortoGovernmentforhigh-valueandhigh-impactinvestors,facilitatingwithaccessandinsightsthroughaconciergeoffer.TheOfIworksacrossdepartmentstodriveincreasedinvestmentinlinewiththeGovernment’snetzeroagenda.FindaUKspecialistTheUKInvestmentSupportDirectoryallowsyoutofindcompanieswithskillsandexperienceinhelpingoverseasbusinessessetuporexpandintheUK.LinkstokeyorganisationsInadditiontocentresofexcellenceandindustryclusters,wewillfacilitateintroductionstouniversities,LocalEnterprisePartnerships(LEPS)andEnterpriseZones.EconomicdevelopmentagenciesThereareanumberoforganisationswithsignificantexperienceindeliveringpublicsectorinvestmentpackages.Forexample,ScottishNationalInvestmentBankisamission-leddevelopmentbankthatprovidespatientcapitaltobuildastronger,fairer,moresustainableScotland.SupportmovingatechbusinessTheGlobalEntrepreneurProgramme(GEP)helpshigh-growthoverseascompaniesrelocatetotheUK.TheUK'scommitmenttosupportglobalinvestmentisunparalleledTheDepartmentforBusinessandTrade(DBT)DBTsupportsbusinessestoinvest,growandexport,creatingjobsandopportunitiesacrossthecountry.UKExportFinance(UKEF)TheUK’sexportcreditagency,hasenhanceditssupporttoattractinvestmentintosupplychainsandbuildingexportcapability.UKinfrastructureBank(UKIB)TheUKIBcaninvestacrossthecapitalstructure(seniordebt,mezzanine,firstloss,debtguaranteesandequity)tohelpcrowdprivatefinanceintonetzeroinfrastructure.TheBankhasidentifiedCCUSasaninvestmentopportunity,andprojectsareencouragedtocontactUKIBabouttheirfinancingneedsOffshoreWindNetZeroInvestmentRoadmap:Leadingthewaytonetzero21OffshoreWindNetZeroInvestmentRoadmap:LeadingthewaytonetzeroAppendixA–Notesanddefinitions(forslide14)InvestmentneedsaredefinedasthetotalsumofcapitalcontributionsrequiredtodeliverthenecessaryprojectstoachievethedeploymentpathwaysshownintheNetZeroGrowthPlan.The£50billionquotedisfromthelowelectrificationscenariofromTheDepartmentforEnergySecurity&NetZero’sDynamicDispatchModel(DDM).TheestimateofoffshorewindcapitalexpenditureisbasedondatafromtheElectricityGenerationCostsReportandappliedtothelowelectrificationdeploymenttrajectories.Figuresareundiscounted,non-annualisedandarein2021realtermsroundedtothenearest£10billion.Figuresincludeimportswhereinputsarepurchasedfromoverseas.Onlycapitalexpenditureassociatedwiththeconstructionofoffshorewindturbineshavebeenincluded.Thismeansthatcapitalexpenditureassociatedwiththeoffshoretransmissioninfrastructurehasnotbeenincludedinthisestimate.Inclusionofcapitalexpenditureontransmissioninfrastructurewouldincreasethenumberprovidedinslide14.DatafromtheORECatapultguidetoanoffshorewindfarmindicatesthatthiscouldleadtoanincreaseofupto30%,however,toensureconsistencyofsourcedataandunderlyingassumptionsthisapproximationhasbeenomittedfromslide14.Thecostsassociatedwithoperationalexpenditure,decommissioning,developmentcostsoranyassociatedinvestmentinsupplychainsandinfrastructurewhichisrequiredtodelivertheassumeddeploymentpathwayarealsoexcluded.ThisprovidesanestimateofhowmuchcapitalspendcouldberequiredtoconstructoffshorewindfarmsintheUKby2030.Itisframedas‘atleast’asitisbasedonthelowelectrificationscenariosandexcludestransmissioncapitalexpenditurewhichcouldincreasethisestimate.great.gov.ukPublishedDisclaimerTheDepartmentforEnergySecurityandNetZeroisthedepartmentfordeliveringsecurityofenergysupply,ensuringproperlyfunctioningmarkets,greaterenergyefficiencyandseizingtheopportunitiesofnetzerotoleadtheworldinnewgreenindustries.TheDepartmentforBusinessandTradeisthedepartmentforeconomicgrowth.Wesupportbusinessestoinvest,growandexport,creatingjobsandopportunitiesacrossthecountry.LegaldisclaimerWhereaseveryefforthasbeenmadetoensurethattheinformationinthisdocumentisaccurate,theDepartmentforBusinessandTradeandDepartmentforEnergySecurityandNetZerodonotacceptliabilityforanyerrors,omissionsormisleadingstatements,andnowarrantyisgiven,orresponsibilityacceptedastothestandingofanyindividual,firm,companyorotherorganisationmentioned.©Crowncopyright2023Youmayre-usethispublication(notincludinglogos)freeofchargeinanyformatormedium,underthetermsoftheOpenGovernmentLicence.Toviewthislicence,visitnationalarchives.gov.uk/doc/open-government-licence/version/3Wherewehaveidentifiedanythird-partycopyrightinformationinthematerialthatyouwishtouse,youwillneedtoobtainpermissionfromthecopyrightholder(s)concerned.PublishedbyDepartmentforEnergySecurityandNetZeroandDepartmentforBusinessandTrade31March2023March2023