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Winds of Change

Scotland, and the North-east in particular, is in pole position to capitalise on the massive investment in the development of offshore wind over the next decade.

It is expected to top £100 billion – the equivalent of an Olympic Games every year - creating the most significant opportunity since the pioneering days of offshore oil and gas.

Scotland has the best wind resources in Europe and the country’s engineering expertise, offshore experience and coastal infrastructure, much of it built up as a result of the oil and gas industry, are vital advantages.

More than 6000 turbines up to 180 metres high and with rotors 150 metres across will be sited off the UK coast - 1300 of them in Scottish waters which command 25% of Europe’s wind resource.

Annual capital expenditure will be 50% more than the oil and gas sector creating up to 70,000 jobs, 20,000 of them Scotland.

The Crown Estate is the independent landlord for the UK’s seabed and is investing in its marine asset and making it available for offshore wind developers through a series of licensing rounds.

The Round 1 relatively small sites close to shore are now being completed and construction is underway of the first Round 2 sites.

Round 3, announced earlier this year, involves nine development zones which will generate enough electricity to power more than half of Britain’s homes and include Scotland’s Firth of Forth and Moray Firth developments which will have a combined generating capacity of 4.8 GW.

Scotland has a workforce with unrivalled skills in the developing technologies to capitalise on these opportunities and it has a major advantage in installation and commissioning as well as through to long term maintenance.

Both the UK and Scottish Governments are committed to colossal increases in wind energy generation.

The UK Government plans to achieve a 10-fold increase in wind energy generation by 2020 as part of legally binding European targets for renewable energy. Scotland is aiming to generate 50% of its electricity from renewable sources by the same date and offshore wind will make the largest contribution to these targets.

It is an ambitious rate of expansion but the wind industry globally is accustomed to 20% annual growth and it regularly exceeds projections for installed capacity.

The UK is already the global leader in offshore wind. Projections suggest that it will remain the largest market for the foreseeable future, representing up to 80% of total installed capacity in Europe.

Many companies in the North-east are already working to maximise the opportunities which offshore wind creates and at the forefront is subsea cable installation company Subocean whose director John Sinclair spotted the potential almost a decade ago.

“It was probably around 2001 when I was out looking at what other market opportunities there were that I saw the potential for offshore windpower and although it was being talked about it wasn’t until about 2003 it started to take shape.”

He said that commitment from governments around the world to renewables was driving rapid progress although there were a number of supply chain issues yet to be resolved.

As well as serving the current needs of its customer the company was looking ahead to its clients’ future demands which offer so much potential that ultimately it might force Subocean out of the traditional oil and gas market.

“My faith in the offshore wind industry is now being realised,” he said. The belief we had in it from 2001 is now becoming a reality but there is still a lot of do in the next 15 years. There are major opportunities right across the UK which are not being grasped.”

“I have a big issue with the fact that the UK Government will tell you it is 80% UK content out there in offshore wind but the reality is it is 20%. The major project management companies may be UK and all the money is going through them but it is actually being farmed out to non-UK companies. It is all European companies which are benefitting from it.

“I firmly believe there are more opportunities for UK companies out there. Subocean has about 40% of the UK market just now and I believe if we keep 10% of our business going forward, because of the scale of it, in three of four years time we will still be three times the size we currently are.

“We were heavily involved in traditional oil and gas but the problem is that we can’t do everything. Because of a bit of a setback in the oil and gas industry over the past for 12 months 95% of our business is now coming out of renewables. The question is if, when the oil and gas comes back, we will have the resource and equipment available to really compete in that sector or if we will end up becoming a renewables company. We may end up being a renewables company and only taking oil and gas work on when we have gaps in schedules and vessel availability.

“We have an order book of £150 million and outstanding tenders of £500 million in renewables work in the next three to four years and that is right across Europe.”

Another North-east company which has grasped the potential of windpower, and other renewables, is Ace Winches of Banff.

The company was formed in 1993 manufacturing winches for the fishing industry but eight years later its core business vanished at a stroke with a decommissioning scheme.

“It was a sink or swim situation,” said managing director Alfie Cheyne who went on to swim like an Olympian.

“We were employing 28 people in 2001 and we are now employing 150. Our involvement in fishing is now so small it is hardly even worth noting.

“We switched to marine and oil and gas activities supporting mainly the major marine contractors like Saipem, Technip and Subsea 7.”

Ace was involved in the installation of the Beatrice windfarm project in the Moray Firth and has also worked with tidal energy system company Openhydro in Orkney and in the Bay of Fundy, Nova Scotia.

“But we have had a tremendous relationship with John Sinclair at Subocean who has been very supportive of Ace Winches. We provide the mooring spreads and the heavy pull winches and machinery to go aboard the barges he is taking out to the cable lay. We are supporting him with staff and equipment.

“I think Subocean is a world leader now – they have taken the market by storm and put tremendous resources and manpower into this and I don’t know any other organisation which is leading it like they are. They really are in the forefront.

“We are getting more and more inquiries from other UK and international companies which are getting involved in this and we are hoping to be suppliers to others.

“We did see the potential early but John is the man with the vision and we first worked with him when he was with his previous company.

“We believe windpower has tremendous potential because of our transferrable skills – we are taking the knowledge and expertise in our business and applying it to a new industry and technology.”