Written Statement: Offshore Wind Action Plan Update

Since the publication of the Offshore Wind Action Plan in Spring last year, two offshore wind projects in Welsh waters have been awarded UK Government Contracts for Difference.  RWE’s 755 MW Awel y Môr fixed bottom project off the coast of North Wales and Blue Gem Wind’s 100 MW Erebus floating project in the Celtic Sea represent a step-change in Wales’s potential to deliver green electrons from offshore wind into the Welsh grid.

These projects represent significant investments which align with our government’s renewable energy goals and demonstrate the importance of taking the Offshore Wind Action Plan forward and creating the environment to maximise the value for the people of Wales.

We have called on UK Government and the Crown Estate to ensure the test and demonstration projects in the Celtic Sea have access to appropriate funding to create momentum throughout the region and act as a stepping stone to the delivery of the Round 5 projects.  This would also act as a catalyst within the supply chain and help to demonstrate regional delivery capability and expertise.

We have also held constructive discussions with UK Government around the evolution of the Contracts for Difference support, particularly around the inclusion of deep-water wind technologies. 

Welsh Ministers have also met with our UK counterparts to reinforce the importance of ensuring a pan-UK package of support being delivered via the Clean Industry Bonus and future Contract for Difference Allocation Rounds.  To promote the opportunity, Marine Energy Wales recently delivered a session covering the Clean Industry Bonus to the Welsh supply chain, to raise awareness of the support available for potential projects.

To support the Action Plan’s recommendations, I have delivered additional resource within my portfolio to coordinate the development and delivery of the investment and supply chain actions, which includes an increased budget for Business Wales to specifically support supply chain activities across the energy sector.  Additional resources from other portfolios have also been made available to focus on the skills agenda. 

We have also published a Welsh Ports Prospectus which details our port’s priorities and their ambitions to invest to deliver support to the offshore wind sector.  We have used this promotional tool extensively since last Autumn, including at the Wales Investment Summit to reinforce the fact that Wales is ‘open for business’ across the sector’s value chain. 

As a follow-on my officials are proactively working with Welsh port operators to further develop the Prospectus with specific regional offerings.

We are also working closely with GB Energy, the Crown Estate and the National Wealth Fund to leverage funding into Wales, both for port infrastructure and the wider supply chain.

As part of this activity, Marine Energy Wales delivered a funding round table in January for the organisations to outline their individual funding streams and where the opportunity for investment lay.

We have also worked with the Department for Business and Trade and the above partners and Equinor to deliver a trade and investment event in Oslo during February.  The aim of the session was to outline supply chain collaboration and investment opportunities in Wales. 

We have and are continuing to proactively reach out to Tier 1 supply chain companies to gauge their interest in investing in Wales.  However, our ability to achieve success is dependent on offshore wind projects surrounding Wales reaching financial close.  Therefore, it is critical that developers and the wider supply chain have confidence that there is a sustainable long-term market pipeline. Only with this in place will we be able to unlock the high value manufacturing and employment opportunities across Wales.

To that end, I welcome the positive outcome of The Crown Estate’s Round 5 leasing process for the Celtic Sea.  All three of the project developers Equinor, the ESB and EDF Power Solutions Gwynt Glas joint venture and Ocean Winds have reached Agreement for Lease.

I can also confirm that the Crown Estate has established a Celtic Sea Developers Forum, with secretariat support provided by Marine Energy Wales, which includes both the test and demonstration projects in the Celtic Sea plus successful Round 5 bidders.  The Forum will initially focus its attention on social value and environmental permitting.

Welsh Ministers and officials have continued to actively engage with all of the offshore wind project developers, to fully understand their challenges and to press for them to maximise the value of their investment in Wales. This includes a meeting I held with the JERA Nex bp joint venture to discuss the next steps for their Mona 1.5 GW project off the coast of North Wales.

Enabling actions that we have undertaken in the past nine months include providing additional funding to Natural Resources Wales (NRW), for the ongoing improvement of the marine licensing function and to support consenting for offshore wind projects.

We have also had extensive engagement with UK and other Devolved Governments to progress appropriate environmental compensation measures.  I can confirm that the Marine Recovery Statutory Instrument has been laid and the Marine Recovery Fund has opened. We have agreed with UK Government that any offshore projects in Wales will have the option to access the fund should any compensatory measures be required for damage to a Marine Protected Area.  

We are working with NRW and contributing to the Collaboration for Offshore Wind for Strategic Compensation process to identify suitable strategic compensation for Wales.  We are also collaborating on the UK Environmental Compensatory Measures Reform policy, and the UK Government laid the Statutory Instrument on 26^th February.  The reform will include a new hierarchy of compensation options for damage to Marine Protected Areas by offshore wind development.  

Alongside this, we are working collaboratively with The Crown Estate to leverage their marine mapping expertise and understand how the Marine Delivery Routemap can feed into the marine planning process.  This work will include the development of a spatial assessment of Welsh seas that will inform marine planning.

We recognise that grid is a priority for the sector, and we are inputting to NESO’s Strategic Spatial Energy Plan (SSEP) process providing advice on mapping approaches for the Welsh marine area and identifying opportunities to align marine planning with the SSEP.

More broadly, Welsh Government and NESO have been working together to ensure that Welsh policies and data are incorporated into the evidence used to develop the SSEP pathways we expect to see this summer. 

While we must wait until we see the outputs of the SSEP process to assess how well they meet our strategic aims, we recognise the concerted effort NESO has made over the last year to involve Welsh organisations in its thinking.

Skills and workforce development will be a critical enabler to successfully deliver the outcomes we want.  Colleges in Wales are taking the initiative in exploring what opportunities the sector require.  Two of the Crown Estate’s recent Supply Chain Accelerator projects in Wales are skills focussed.  Firstly, the Neath Port Talbot Group of Colleges are undertaking a feasibility study on establishing a floating offshore wind academy in Port Talbot, whilst Pembroke College is taking an M4 Corridor view on skills encompassing offshore renewables and industrial decarbonisation technologies.

This activity sits alongside Coleg Llandrillo Menai’s excellent work in delivering apprenticeships for the offshore wind sector in north Wales.

Finally, I am pleased to announce that I am making an £8 million investment into Marine Power Systems, who is based in Swansea and designs a range of deepwater technologies for the offshore wind sector.  The company was co-founded by two Swansea University graduates in 2018 and has developed a comprehensive set of Intellectual Property rights covering platform architecture, mooring systems and modular design.

This investment will unlock additional technical feasibility and manufacturing modelling activities, which will be the bedrock of the company’s future expansion.

In providing this support, I wish to underline this government’s commitment to developing a high value-added supply chain in Wales, to maximise the economic opportunity and retain as much value as possible here in Wales.