09:30 Stephen Crabb (Preseli Pembrokeshire) (Con)

This is a timely moment to discuss the role of floating offshore wind in the UK’s energy mix and to consider what further steps the Government need to take to facilitate the emergence of that new industry. The twin challenges of net zero and energy security mean that the strategic imperative around this home-grown clean energy solution is becoming ever stronger.

There is a high level of expectation that floating wind is going to become an increasingly important part of our energy mix. The Government have set a target of 5 GW of FLOW to be installed by 2030, and Offshore Renewable Energy Catapult estimates that we could have up to 95 GW of floating wind in UK waters by 2050. At that point, the majority of the wind turbines in UK waters would be floating, not fixed to the seabed as they are today.

Early analysis by Cardiff Business School suggests that floating offshore wind, hydrogen and sustainable fuels investment could add an additional 3,000 Welsh jobs to the 5,000 already supported by the Milford Haven waterway. Floating offshore wind will facilitate the transition to a vital new green energy era, supporting the continued evolution of that major hub for another 50 years. On the Milford Haven waterway, we already have a number of very active projects: we have Blue Gem Wind, a joint venture between Simply Blue and TotalEnergies, which is looking to establish the first demonstrator projects in the Celtic sea. We have DP Energy, a joint venture involving EDF, and RWE—which has a major gas-fired power station on the Milford Haven waterway—is looking at floating offshore wind opportunities, in conjunction with exploring the possibilities of producing hydrogen and moving its entire operation in Pembrokeshire to a lower carbon future.

The next area of challenge is getting the right financial architecture in place: a market environment that encourages price competition and industrial development. The contracts for difference have been incredibly effective at reducing the costs of renewable energy projects by reducing wholesale price risk, but the weakness of the structure of the CfD auction scheme is that it considers only the price of projects, and not wider industrial and economic considerations or future cost reductions. The Government should look to reform the CfD system to create a premium or incentive that recognises projects that make substantial commitments to industrial and economic development in the UK and to innovation in the UK. The aim of these reforms should be focused on fostering a market environment in which investment, innovation and economies of scale are incentivised. Consideration should also be given to what form of support can be provided to combined FLOW and hydrogen production projects, which cannot really be assessed alongside conventional FLOW from a cost perspective. I mentioned the work that RWE is doing in Pembroke, looking at the role of floating offshore wind to support hydrogen development, and there probably needs to be a different way of looking at that in terms of price support.

Let me get on to grids, before I bring my remarks to a close. The hon. Member for Aberavon (Stephen Kinnock) is exactly right: potentially even more challenging than delivering port upgrades is achieving a serious step change in the way we increase grid capacity and make available new grid connections here in the UK. The planning and consenting processes are ridiculously slow and difficult—they are not fit for purpose. We on the Welsh Affairs Committee in recent months have been taking evidence on the grid infrastructure in Wales. Our report on that will be coming out soon, so I will not pre-empt that. I was pleased in the evidence we took to hear about steps that are being taken by Government to reduce the offshore wind consenting times, but the truth is that we need to see far more urgent action from Government to address grid capacity. The danger is that developers will increase their capabilities and be able to construct and deploy large-scale renewable energy infrastructure way ahead of the planning process, and that cannot be acceptable. We need more anticipatory investment so that new grid networks are built in time for those major new sources of generation and for demand. We could talk about other planning challenges: in the Welsh context, we have the devolved body Natural Resources Wales. Developers are concerned that Natural Resources Wales should be fully equipped to be able to handle the volume and complexity of the planning jobs that they will be asked to do, to assess the impact on seabeds and things like that.

Floating offshore wind represents a major, exciting opportunity for the UK to tackle a number of critical issues: wholesale prices, energy security, job generation, levelling up and net zero. It is an exciting package. Floating offshore wind presents a compelling answer to all those challenges. The key challenges for us to consider are the risks and potential difficulties around delivery, and achieving the scale of offshore and onshore capabilities and systems that will be required just a few years from now. I look forward to hearing from colleagues and the Minister.

[Source]

09:51 Stephen Kinnock (Labour)

The future of our country is in our air, sea and skies, and mother nature has truly given us a gift in Wales. We were the cradle of the first industrial revolution, and now Wales can be the cradle of the green industrial revolution, with Port Talbot at the forefront. Investing in Port Talbot as the hub for this game-changing form of renewable energy would turn south Wales into a green power superpower in the generation of renewable energy. I therefore urge the UK Government and all other key stakeholders to come together to ensure we grasp this opportunity with both hands.

[Source]

10:08 Kenny MacAskill (East Lothian) (Alba)

The hon. Gentleman has hit on something really important: community benefit. In Orkney and Shetland for the last 40 years we have derived real community benefit from the presence of offshore oil and gas in our communities. It would be an absolute scandal if we cannot get the same benefit from the next generation of clean renewable energy. Does he agree that it is rather perplexing that when the ScotWind round of leasing was facilitated, a cap of £100,000 per sq km was put on bids in the auction? I do not understand for the life of me why that was necessary. It is a real missed opportunity. Scotland’s seabed has been sold cheap.

[Source]

10:15 Cherilyn Mackrory (Truro and Falmouth) (Con)

I was delighted to welcome the Defence Secretary, the COP26 President and the Business Secretary to Falmouth to see first hand how Cornwall can help deliver this vision. It is right that the Government have a target to raise the UK’s floating offshore wind capacity from one gigawatt to five by 2030. Floating offshore wind in the Celtic sea will be crucial to reaching that target, with the Crown Estate recently announcing that the leasing round for the region will be launched in mid-2023. That could deliver 4 GW of installed UK floating offshore wind capacity by 2035, supporting up to 3,200 jobs, with the potential of £682 million spend in the local supply chain by 2030.

[Source]

10:20 Jim Shannon (DUP)

The United Kingdom has announced plans to speed up consent for offshore wind projects across the nation to improve our energy sustainability, which is welcome news. They include reducing the consent time from four years down to one and assessing environmental considerations at a more strategic level. While that is welcomed, all nations throughout the United Kingdom have a role to play on offshore wind. In March 2022, just seven months ago, Simply Blue Group launched its latest offshore wind project in Northern Ireland, called nomadic offshore wind. It will be located between Northern Ireland and Scotland. Our Gaelic cousins, both in Northern Ireland and Scotland, are intertwined on that project. The company responsible is MJM Renewables of Newry, and it is playing a pivotal role in tackling climate change and developing offshore wind in Northern Ireland, this time in conjunction with those in Scotland as well. We are pleased to be part of that project.

Government must play a leading role in incentivising the use of greener energy. This winter has been a real eye opener in proving how global circumstances can impact upon our daily lives. Green energy and offshore wind will create additional projects such as manufacturing facilities, hydrogen production, and data and research centres, thereby creating the opportunity for more local jobs. I am always greatly encouraged by what the Scottish Government do on renewables in Scotland, and I often wish that we were in a position to match that. The UK is one of the world’s largest markets for offshore wind with the projects currently installed. BP has stated that the capability is there to power over 6 million homes, with 11 gigawatt of power currently under construction. Ørsted, the world’s largest renewable energy company, has invested over £14 billion in the construction of new offshore windfarms in the UK, generating 7% of the UK’s electricity.

I have been contacted by the Royal Society for the Protection of Birds, which has raised concerns about the deterioration in UK waters, which is evident through the catastrophic declines of globally important seabirds. I want to ensure that we have protection within the green energy strategy that we are pushing forward. Between 1986 and 2019, the number of breeding seabirds fell by almost a quarter across the United Kingdom. I seek reassurances from the Minister and the UK Government that any further consideration for offshore wind will not impact our marine wildlife. That must be a commitment from not just this Minister, but the Department for Environment, Food and Rural Affairs as well.

There are ongoing concerns over the security, affordability and sustainability of our energy supplies. We have aspirations for our climate strategy, and offshore wind is proving to be one of the leading initiatives. We must do more to put the United Kingdom in the best position to benefit from the growth that the renewable energy sector has to offer. What an opportunity. What possibilities there are for the future.

All nations across the United Kingdom of Great Britain and Northern Ireland have a part to play in achieving our net zero goals by 2050. Offshore wind projects truly present a great opportunity for us all. I call on the Minister and the Department to see this as a priority in meeting our climate change and net zero targets. I commend the right hon. Member for Preseli Pembrokeshire for bringing forward the debate, and I look forward to the Minister’s response.

[Source]

10:26 Stephen Flynn (SNP)

I thank the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) for bringing forward this incredibly important debate. I will start in a slightly unusual fashion, by referring to something that happened 10 years ago. In April 2012, there was a Scottish parliamentary inquiry into renewable energy. An Aberdeenshire hotelier put forward a submission, both in writing and in person. He said that offshore wind was unreliable and an expensive form of power. Much like many things that Donald Trump has said, that has been proven to be completely untrue. As we know, offshore wind is six to nine times cheaper than its gas equivalent, and it is very reliable. He was referring to the Aberdeen Renewable Energy Group, a joint venture with Vattenfall, which sits off the coast of Aberdeen. It has been providing clean, green, sustainable electricity—enough to power all the homes in Aberdeen—since it came onstream. I was fortunate to visit it recently with the team from Vattenfall.

[Source]

10:44 The Minister of State, Department for Business, Energy and Industrial Strategy (Jackie Doyle-Price)

We have heard a great deal, and the Government would completely agree that renewable energy is central to the UK’s decarbonisation and economic growth, with floating offshore wind remaining a part. I am glad that my right hon. Friend the Member for Preseli Pembrokeshire referred to it as FLOW. I absolutely hate acronyms, but it just so happens that this one conveys exactly what we are talking about and is a very good description of floating offshore wind, which is a bit of a mouthful. It provides secure, low-cost and domestically generated electricity, and reduces our dependence on imports from overseas—there is no better lesson than the one we have learned over the past year—so what is not to like? It is absolutely essential that the Government get behind this source.

The Government are working with Ofgem and the National Grid Electricity System Operator to bring forward a series of strategic network designs to determine what the required infrastructure will be to support our net zero targets. A holistic network design was published in July, which includes the 1.5 GW Mona project off the north Wales coast, and an indicative network design for floating wind in the Celtic sea with a connection to Pembroke dock. It is being planned for, but we collectively need to ensure we execute that in order to realise the benefits as soon as possible. I will invite the responsible Minister to write to the hon. Gentleman fully about that, because it is a very real concern, given our experience with renewable energy in the past.

As I said, we recognise the potential of floating wind technology playing a key role in our energy mix as we move towards net zero. The floating wind deployments we have identified in Scotland and the Celtic sea represent a major development opportunity for the sector, which will create major employment opportunities.

Our support for floating offshore wind is demonstrated by the floating wind pipeline being supported in the previous contract for difference allocation round with a ring-fenced budget. That resulted in the first ever contract for difference-supported floating wind project, the 32 MW TwinHub project in Hayle, Cornwall. My Department has also joined the Offshore Renewable Energy Catapult’s floating offshore wind centre of excellence. We are providing the centre with £2 million over four years and strengthening its mission to accelerate innovation in the UK’s floating wind sector. I hope that will put us in a prime position to capitalise on a growing export market as other countries look to use this technology. Our pipeline project is growing. This year’s ScotWind seabed leasing round for Scottish waters resulted in 28 GW of new projects, of which 18 are floating wind projects.

We have heard much reference to the role of the Crown Estate. As we speak, Crown Estate Scotland is running a leasing round for innovation projects to decarbonise, which could result in another 6 GW. There are more than 400 MW of floating pathfinder projects already leased in the Celtic sea next year. The Crown Estate will run its Celtic sea floating leasing round, which will bring forward 4 GW of this innovative technology in the waters around south west England and south Wales. As my right hon. Friend the Member for Preseli Pembrokeshire said, there is potential for a further 20 GW of floating wind by 2045. That is transformational in terms of decarbonisation, and we must ensure we do what we can to secure it.

[Source]