In November we announced our plans to bring together all our renewable energy activities in the UK and Ireland under a new entity, SSE Renewables. Creating this focused business fits with SSE’s vision of being a leading energy company in a low carbon world. My aim is to motivate and mobilise our highly skilled people to focus on efficiency and innovation, ensuring that renewable energy represents value for money.
Back in 2004 we first dipped our toes into the Scottish offshore wind industry with the co-development of the Beatrice Demonstrator which was ground breaking at the time. Fast forward to now and SSE currently has the largest consented offshore wind pipeline in the UK and Ireland, some 3.3GW. During that time SSE has proven its ability to deliver and operate industry leading offshore wind projects. These include (with our partners) the 504MW Greater Gabbard offshore wind farm off East Anglia completed in 2012 and the 588MW Beatrice project in the Moray Firth where well over half of the turbines have been completed.
Beatrice is bringing over £1.1bn of added value to UK GDP through its construction and around 90 long-term jobs to the far north east of Scotland at the operations and maintenance base in Wick, creating real economic development in the region. Looking forward, the future is bright for the Scottish offshore wind sector. We are progressing our Seagreen Phase 1 project, located in the Forth of Firth, which could be up to 1500MW. Of course, delivering the project will be dependent on the outcome of this year’s CfD auction, which will be the most competitive and challenging yet.
Offshore wind is delivering where other low carbon technologies are facing challenges. Our view is that 1-2GW deployment a year, resulting in 30GW by 2030, should be the absolute minimum the UK’s ambition for offshore wind. It is certainly not an upper limit with the healthy pipeline of projects we are seeing come through in the UK. When the Committee on Climate Change reports back on its advice regarding the implications of a net zero target, something SSE supports, it is highly likely that we will need as much offshore wind as possible, as fast as possible. In that context it is somewhat counterintuitive that the UK government has decided to cap the amount of capacity which can be successful in the next CfD auction at 6GW.
The Sector Deal, which should be announced soon, will set the industry on a new footing. The offer from the Sector is clear – multibillion pound investment in low carbon infrastructure which creates good quality jobs; innovation; regeneration and upskilling in areas of the country that need it most. We need to make sure that Scotland is at the heart of that Sector Deal. Both in terms of what it can offer and how it benefits. Certainly, more can be done to support the domestic supply chain.
Leasing new Scottish seabed will help to unlock more offshore development. We welcome the Marine Scotland and Crown Estate Scotland leasing work and engagement in recent months. The final Scottish Marine Plan must maximise Scotland’s potential while also balancing other interests. Sites available for lease in future rounds need to include sufficiently shallow water areas where fixed foundations can be used. Deeper waters more suitable for floating technology holds a lot of potential in the longer term but in the near-term are simply not going to be competitive. We understand the concerns expressed by some around constraints and sensitive areas, and we as an industry have and can continue to work collaboratively with Marine Scotland and stakeholders to mitigate these concerns and find a successful way forward.
As set out in the Sector Deal, we need to ensure that there is collaborative approach between governments and the industry to addressing all the barriers to deployment we currently see. Because without doing so, we will struggle to achieve our collective ambitions. SSE is up for the task and we are committed to seeing offshore wind thrive in Scotland and the UK more broadly. 2019 is set to be an exciting year but is just the beginning of the next phase.