Minutes for Offshore Wind Programme Board OWPB09

Transcription

1 MINUTES Minutes for Offshore Wind Programme Board OWPB09 Meeting date 16 June 2015 Minutes for the 9 th meeting of the Offshore Wind Programme Board held in the Boardroom, RenewableUK, Greencoat House Francis Street, London SW1P 1DH, on 16 June 2015 at 09.30BST Attendees Adam Bruce (Co-Chair) Yuen Cheung (Co-Chair) Blair Ainslie Carolyn Campbell Alastair Dutton Deirdre Fox John Goold Sean Kelly Andrew Jamieson Graham Meeks Maf Smith David Stevenson Ray Thompson Hugh Yendole John Yorston Joshua Willison Global Head of Corporate Affairs, Mainstream Renewable Power Head of Offshore Wind, ORED, DECC Managing Director, Seajacks UK Offshore Wind Industrial Strategy Lead, BIS Strategic Programme Manager, The Crown Estate Director Strategic Business Development, Tata Steel Director of Marine Operations, JNCC Director, Transmission Excellence Ltd Chief Executive Officer, Offshore Renewable Energy Catapult Head of Policy, Green Investment Bank Deputy Chief Executive Officer, RenewableUK Head of Offshore Wind Policy, The Scottish Government Head of Business Development - Offshore UK, Siemens Energy Portfolio Asset Manager, DONG Energy Senior QHSSE Manager, EDPR UK Partnership Manager, The Crown Estate Apologies Jonathan Cole Dan Finch Bryan Payne Keith Waller Offshore Managing Director, Iberdrola Managing Director, EDPR UK Deputy Director, Business of Energy & the Environment, BIS Senior Adviser, Infrastructure UK, HM Treasury Observers Oliver Todd Offshore Wind Industrial Strategy Team, BIS *denotes via teleconference Substitutes underlined OWPB09 FINAL MINUTES.DOCX Page 1 of 5

2 1. Welcome, Opening Remarks & Actions 1.1. Adam Bruce welcomed attendees to the meeting. Apologies listed on the previous page were noted The Board then formally approved the OWPB08 Minutes Adam Bruce reviewed the previous actions The competition statement was noted by members. John Goold stated he may have a conflict of interest for the item on Special Areas of Conservation so would excuse himself from the room if necessary. No other conflicts of interests on the agenda were declared. 2. OWPB Risk Committee update 2.1. Alastair Dutton provided an update to the Board from the 11 th and 12 th Risk Committees. Version five of the risk register was approved. A control statement and heat map were presented which summarised the risk register update. Two thirds of the cost reduction potential is still uncertain thus still requiring action from industry and OWPB. Action: Alastair Dutton to include commentary on the top risks to next OWPB John Goold explained the European Commission action against HM Government for nondesignation of special areas of conservation for Harbour Porpoise. Defra is acting as the lead Department so has commissioned JNCC to lead technical work on identification of possible areas for harbour porpoise. The technical side has been largely signed off so JNCC is working with other SNCBs and engaging informally with stakeholders as a precursor to a public three month consultation. Following that, if new information is submitted it will be reviewed. If areas are designated, then they will be subject to habitats regulations assessments Hugh Yendole stated that developers were concerned about the process which in their view has not been completely visible and the timeframe truncated. The mitigation measures that seem to have been proposed do not have a conservation objective, which means there might be a reasonable chance of legal challenge. There is also developer concern over data sources and the methodology which in their view has been derived by the consenting process for offshore wind farms. If HMG has to change consents, then developers may opt for compensation as it threatens project viability and thus adds to levelised cost. The issue has been flagged with the industry OWIC co-chair. It should be noted that industry is in agreement that this work should be done, but with the proviso of good data and objectives Adam Bruce reaffirmed that OWPB is not a lobbying body so agreed to raise it here as a significant risk to cost but the high level engagement is taken by OWIC and reinforced by RUK Yuen Cheung stated that DECC is putting a process in place so PINS can give guidance on what projects are to do. The DECC planning team has already drafted guidance which is being approved by their legal team. The next steps will be for developers to engage with relevant bodies once the consultation is launched. It was also commented that a lot of developer data is in silos so the industry needs to start helping itself. Action: Alastair Dutton to ensure the issue is on the Risk Register. Action: John Goold to feedback comments to JNCC colleagues involved with the process. Action: Adam Bruce to engage with Benj Sykes on the issue. Action: Alastair Dutton to feedback issue via the SEASTAR Alliance to DG-Energy. OWPB09 FINAL MINUTES.DOCX Page 2 of 5

3 3. G9 Health & Safety Report 3.1. Maf Smith highlighted that the G Incident Data Report has been released. It was done on behalf of the entire Round 3 programme. The report shows zero fatalities but still serious incidents so it was suggested that H&S is included as a Developer Day item. It was agreed that work is still needed on common issues so RUK is looking at developing training standards on lifting which will allow better tracking of data and movements over time OWPB congratulated the industry on its H&S achievements, particularly given such statistics did not exist five years ago; there is a long way to go but there has been good progress made Deidre Fox mentioned that Tata had done a lot of work so offered help on their learnings. 4. Updates 4.1. The Norstec Academy will become the Offshore Wind Academy. Its various strands will be completed through other bodies. Engagement with continental colleagues will be done through the SEASTAR Alliance; public facing communications will be through OWIC and RUK DECC and The Crown Estate attended an Offshore Wind Workshop set up by the Danish Energy Agency. The workshop brought together North Sea offshore wind regulators to share lessons learnt. It was agreed at that workshop that there would be two more this year looking at tender design, costs and risk. The next workshop is due to take place in London on 9 September and the one after in Paris in November The next Developer Day will take place on 17 June, where experiences on Westermost Rough and Gemini will be shared Maf Smith provided an update on the National College based in the Humber. A shadow board is now in place but would still welcome comments from the industry on the curriculum. Site construction is hoped to begin next year with course starting in Following OWIC signing off the UK content methodology, RUK has developed guidance with BVG Associates on completion. Data from developers has not been forthright as hoped for and there is a risk that companies across the supply chain are not putting processes in place to make the process easier. BIS views this work as very important particularly as it has now made offshore wind an exemplar to other industries. Adam Bruce highlighted this as important and should be brought to OWIC Maf Smith presented the 2015 Project Timelines update. We now have 5GW of operational capacity and by end of 2020, there will be a total of 25GW of FID capacity. It should be emphasised that the project timelines work is a bottom-up process which reflects ultimate industry appetite of what can be achieved. The key messages about long-term certainty remain important. 5. Cost Reduction Monitoring Framework (CRMF) 5.1. CRMF showed industry is making good progress towards 100/MWh. The lagging indicator analysis cannot be repeated this year due to insufficient projects to ensure anonymity. The leading indicator qualitative analysis can however be repeated on an annual basis The OWPB approved the paper s two recommendations: Prioritise continuation of the CRMF Quantitative assessment in the UK in 2016; OWPB09 FINAL MINUTES.DOCX Page 3 of 5

4 Agree that the OWPB should not lead on establishing a European wide assessment of Levelised Cost of Energy. 6. Future GVA & Job Creation 6.1. Carolyn Campbell presented a paper on future GVA and jobs for the offshore wind sector. OWPB has adopted a target for cost reduction: a levelised cost of 100/MWh by FID OWPB has not yet adopted an equivalent target for UK economic value to reflect its role of delivering actions to build a successful, competitive UK-based industry BIS has carried out provisional modelling, in order to provide OWPB with input which could form the basis for setting an OWPB target for economic value. The model can be used to explore the sector jobs and GVA generated by pursuing different offshore wind deployment, cost and UK content scenarios in the UK out to The report provides the following estimates for the UK offshore wind sector in 2013 (the latest year for which data is available): 600m direct GVA, 400m indirect GVA, 1bn total GVA, 7900 direct jobs, 5800 indirect jobs and total jobs The outputs obtained from the model for GVA and jobs in 2020, using the inputs above, are 1.2bn direct GVA and direct jobs. It is possible to use the economic multipliers in the BIS report The size and performance of the UK low-carbon economy to crudely estimate total (direct and indirect) GVA of 2.1bn and jobs in OWPB agreed that the export narrative should be introduced to the work. The Board noted that the early modelling results were extremely valuable so asked BIS to continue the work and present findings in advance of the OWIC terms of reference review. 7. Performance Bonds 7.1. Carolyn Campbell presented a paper on performance bonds. A key issue highlighted in the supply chain review led by Matthew Chinn was that the demand for performance bonds from developers and Tier One suppliers to companies in their supply chain (whilst understandable) is having a detrimental effect on growth and competition as suppliers cannot afford to tie up working capital in bonds Following on from the agreement of the OWPB Risk Committee on the 19th of May, the paper sought the approval of OWPB to submit a full paper to OWIC with a view to building consensus about the appropriate level of bonding and exploring the acceptability of alternative options OWPB approved the paper s two recommendations: BIS will engage with developers to understand their requirements for performance bonds and develop a paper for OWIC with a view to building consensus about the appropriate level of bonding and exploring the acceptability of alternative options to on-demand bonds BIS should identify additional evidence or support that OWPB can offer to the work on performance bonds. 8. Offshore Wind Vision & Industry Communications 8.1. A group led by Julian Brown was put together to draft a document on what the industry could deliver by Ownership has now transferred to OWIC and is with the industry co-chair for OWPB09 FINAL MINUTES.DOCX Page 4 of 5

5 review and socialisation. There is a clear cost reduction trajectory in the document that industry will need to get behind. This is separate to an RUK piece of work that has policy requests from the industry. Adam Bruce thanked Graham Meeks for his contribution to the formulation process Maf Smith updated the Board that Amber Rudd and Fergus Ewing will be speaking at RUK Global Offshore Wind. 9. Any Other Business 9.1. There was no any other business. The 10 th meeting of the OWPB will be held in Glasgow in October OWPB09 FINAL MINUTES.DOCX Page 5 of 5