Planning and licensing issues, high grid connection charges and access to finance have been identified as some of the main challenges to the future growth of Scotland's offshore wind sector.
Planning and licensing issues, high grid connection charges and access to finance have been identified as some of the main challenges to the future growth of Scotland’s offshore wind sector, in a survey by the law firm Brodies LLP which also highlights some of the key opportunities to expand the country’s renewable energy industry.
The Brodies survey, conducted in conjunction with the leading turbine manufacturer Gamesa, canvassed the opinions of offshore wind developers, operators and supply chain businesses across Scotland on the main issues affecting the sector. Respondents also included local authorities, advisors, funders, contractors, port operators and trade bodies.
When asked to identify the most important factor on which the future growth of their business depends, planning and licensing were cited by 27% of those who responded to the survey, followed by financing (16%) and improvements in technology (11%).
Commenting on the findings, Neil Collar, head of planning at Brodies, said: “The issue of planning for offshore wind developments was brought to the fore again earlier this month when the American tycoon Donald Trump launched a legal challenge against the Scottish Government’s decision to grant permission for a wind farm off the Aberdeenshire coast, which he claims will spoil the view from his golf course on the Menie Estate.
“Offshore wind is expected to play a vital role in delivering the Scottish Government’s target of generating 100% of electricity from renewable sources. Marine planning is still new, and it is not surprising that it is seen as a key issue for developers. There is good news for developers though, with the proposal from the Scottish Government to designate onshore aspects of offshore wind developments as national development in the new national planning framework, NPF3.”
The online questionnaire was sent to a cross-section of more than 1000 people in the renewables sector, including members of AREG and Scottish Renewables, readers of Subsea UK and delegates at All-Energy 2013, where the results were revealed today (May 22).
Those taking part in the survey demonstrated faith in bank lending, with 29% citing bank project finance as the most important source of funding for offshore wind projects. Corporate balance sheets came second with 26%, followed by institutional debt with 14%.
Keith Patterson, head of Brodies’ projects, energy and infrastructure team, commented: “The level of faith in bank and corporate sheet finance is interesting when you look at the scale of the investment required – it is unlikely that these two sources of finance have the capacity to fund the offshore sector. The Green Investment Bank understands this and has made clear it will seek to support construction finance in the offshore sector. The results suggest developers need to think carefully now about structuring their projects flexibly to suit a range of investor needs – balance sheet, bank or institutional finance.”
When asked to identify the most significant change to the grid that should be made to help Scotland realise its potential for offshore wind, 29% of respondents said lowering the cost of grid connections and the same proportion urged greater collaboration between offshore developers to share transmission assets, such as transmission cables and onshore connection facilities. Establishing a direct connection from Scottish waters to south east England was the second most popular choice with 16%.
Brodies LLP is a leading law practice delivering legal services of the highest quality to Scottish, UK and global organisations. With offices in Edinburgh, Glasgow, Aberdeen and Brussels, the firm offers legal advice to private and public sector clients both in the UK and internationally in its core business areas of corporate and commercial; energy (both renewables and oil & gas); property; litigation; banking and financial services; employment, pensions and benefits and trust and tax. Brodies has 21 practice areas that are ranked top tier by the UK’s independent legal directories. The achievements of Brodies and its partners have been recognised with numerous independent awards in recent years. Bill Drummond, Managing Partner of Brodies, was named UK Management Partner of the Year at the Legal Business Awards 2013 and Brodies was named the Scotland Law Firm of the Year 2012 at the Who’s Who Legal Awards.