Floating Offshore Wind and Contracts for Difference

Selaine Saxby Excerpts

Thursday 23rd May 2024 Westminster Hall

[Selaine Saxby (North Devon) (Con)]

I beg to move,

That this House has considered floating offshore wind and Allocation Round 6 of the Contracts for Difference scheme.

It is a pleasure to serve under your chairmanship, Sir Philip. I thank the Backbench Business Committee for allowing time for the debate and the Minister for agreeing to continue it despite yesterday’s announcement. This topic will be ongoing, regardless of what happens over the summer. I also thank the Department, the Minister and the rest of the ministerial team for their ongoing engagement on the issue, and for increasing the administrative strike price for allocation round 6, which I will refer to as AR6.

The industry welcomed the administrative strike price for AR6, with the uplift of £60 from £116 per MWh to £176 per MWh, demonstrating that the Government have listened to the industry and signalled a policy change that acknowledges the changing economic landscape for developers. Following the Climate Change Committee’s recommendations, floating offshore wind, which I refer to as FLOW, is set to make up to 5 GW of our energy generation by 2030 and 50 GW by 2050. The UK is a leader in FLOW, having the largest pipeline of floating projects globally, with leases of 33 GW and two pioneer projects in Scotland—Kincardine and Hywind.

FLOW has the potential to bring 29,000 jobs and £43.5 billion in gross value added to the UK by 2050, a prospect that should fill us with optimism. We need to ensure that we are ahead of the curve and not just deploying this technology for energy generation, but harnessing its full potential by developing the manufacturing element. However, all that is technically feasible only if we develop FLOW at a large scale. To do so, we need port investment from FLOWMIS—the floating offshore wind manufacturing investment scheme—and, most importantly, a co-ordinated strategy with stepping-stone projects to make that happen.

As chair of the all-party parliamentary group for the Celtic sea, I will make a strong case for FLOW in that region. I have had significant input from Professor Deborah Greaves at the University of Plymouth and the team at RenewableUK. I thank them for their contribution to my speech.

FLOW in the Celtic sea offers unique advantages, allowing us to harness energy regardless of wind direction. Despite its previous neglect due to seabed depths, FLOW can now be deployed in waters deeper than 60 metres, unlocking 80% of our offshore wind resource. That technology presents a significant opportunity for the region’s economic growth and net zero benefits. In 2024, the Crown Estate launched the leasing round for up to 4.5 GW in the Celtic sea, a crucial component in the battle to mitigate climate change and to make progress to net zero greenhouse gas emissions. I am pleased that the Crown Estate is taking what steps it can to drive onshore benefits through its leasing round, but a tender process is only one mechanism for realising the opportunities arising from such projects.

A co-ordinated national infrastructure approach for the Celtic sea is crucial. Such an approach, ideally as a bespoke strategy, is necessary to overcome the ongoing delays and issues we are facing and to ensure the successful development of FLOW in the region. I am glad to hear that RenewableUK, the Crown Estate and others have published an industrial growth plan to co-ordinate the investments needed to realise the opportunity, including prioritising where those investments will have the most impact. Using the growth plan as a blueprint for an industrial strategy for the Celtic sea—to give clarity on how those private investments can co-ordinate with public investment in critical infrastructure such as ports—will provide other investors with the long-term certainty they need to ensure that allocation round 5 and future Celtic sea projects are as successful as possible.

The importance of AR6 cannot be understated. At the moment, investor confidence is low, partly due to the failure in 2023 of AR5 of the contracts for difference, or CfD, to secure any contracts for offshore wind. That has been compounded by international competition and the attractiveness of other markets, which are investing significantly in FLOW infrastructure. Competition, in my mind, is stopping the evolution of FLOW. Currently, four FLOW projects can bid into AR6, with a total capacity of 658 MW: Blyth, which is a 58 MW project in Northumberland and is presented by EDF Renewables UK and Ireland; Erebus by Blue Gem Wind, which is a 100 MW project in the Celtic sea and is backed by TotalEnergies and the Simply Blue Group; Pentland, which is a 100 MW project in Scotland and is backed by Copenhagen Infrastructure Partners; and one new innovation and targeted oil and gas project, Green Volt, which received consent in April and can bid 400 MW.

The budget for AR6 needs to be big enough to accommodate not only the projects that lost out in AR5, but those that would have bid into AR6, so as to not have a knock-on effect on future allocation rounds. I cannot stress enough the future benefits of getting the budget right in this round, and of getting as many viable projects out to sea as rapidly as possible.

The opportunity is to not only regain lost ground, but support FLOW’s growth into the future. That means that while a typical budget might accommodate one or two projects, this year’s budget needs to accommodate three or four. Without these stepping-stone projects, we run the risk of higher costs for future commercial-scale projects and of creating mixed signals for investors in projects, supply chains and ports. Every project that bids and has cleared the hurdles set by the Department should be able to progress, especially if projects are ready to float.

Historically, Celtic sea ports have not received the same investment that has helped their North sea counterparts to develop the supply chain and port capabilities necessary to deploy FLOW. It is indeed hugely disappointing that the only successful FLOW project in AR4—the Hexicon project in Cornwall—did not see its associated port, Falmouth, receiving any funding from FLOWMIS. The dislocation of these spending decisions is bewildering to those of us working with developers in the region.

As I said, investor confidence is low following the lack of bids into AR5, so we have to encourage external investment, but that is simply not the direction of travel we have seen in recent Government spending decisions. I understand that the budget is a matter for the Treasury—the future Treasury—and I have met the Exchequer Secretary to the Treasury to ask for a pot 2 budget big enough to accommodate multiple projects, so that we can maximise the number of winning projects and accommodate those that could not bid in AR5. That is essential to allow Celtic sea projects to move forward at the same pace as North sea projects.

The Celtic sea region of the south-west and Wales includes economically deprived areas, so there is a great opportunity for impact on the economy and society there, but there also needs to be huge innovation to fully commercialise the sector. With my Celtic sea hat on, effective routes to investment could include Celtic sea ringfenced CfD allocations—indeed, I would allow each region to have its own pot. We need these small test and demonstration sites to succeed before any business will invest the kind of money required to deliver the FLOW of the future that the country needs. I was told yesterday that developers are spending £50 million before they even get in their bid for their contract for difference, and that it costs £1 billion to build a stepping-stone project. We should also look to the past, as fixed offshore wind projects were not required to bid in this competitive way until 5 GW had already been secured.

We also need dedicated Celtic sea FLOWMIS allocations, place-based investment, regional co-ordination of public funds and proper net zero plans for the region. The CfD budget plays a vital role in supporting the development of FLOW in both the North sea and the Celtic sea, but it must be substantial enough to ensure the progress of multiple FLOW projects each year, thereby preventing a monopoly in the North sea and ensuring a fair distribution of resources.

On port investment, I am pleased that one Celtic sea port has been supported through Port Talbot in Wales, but I urge the Government to look at a multi-port strategy. We know that no single all-purpose port can accommodate the scale of FLOW development and the need to serve such a large area of ocean. An increase in budget requires more FLOWMIS funding rounds. The decision criteria for allocating grant funding should be reviewed to better apportion the budget to support multiple ports in the Celtic sea region, taking into consideration the stepping-stone nature of the Celtic sea FLOW projects.

I was, as I mentioned, hugely disappointed that no funding had been made available to Port Falmouth, given its partnership with Hexicon’s TwinHub. It had successfully bid for its CfD in AR4, and the TwinHub project is therefore far more advanced than others. However, the absence of FLOWMIS funding will now make it more challenging for those partners to deliver their project, and will almost certainly see all the onshore benefits of that vital project go overseas. The stepping-stone nature of the Celtic sea FLOW project seems to have been omitted from the decision criteria for FLOWMIS. The all-party parliamentary group will continue to seek to engage with Ministers to secure additional port funding for Falmouth and other ports around the Celtic sea as more projects secure a lease.

I will take this opportunity to share the diverse mix of port facilities across the region, including Falmouth, which is ideal for deep-water logistics and fabrication; Appledore, which has shipbuilding, low-carbon vessel innovation and servicing; Plymouth and South Devon freeport, which has marine innovation, blue tech investment and the Smart Sound Plymouth autonomous vehicle test range; Portland port, which is a potential logistics hub; and Ilfracombe in my constituency, which is ideally located for ops and maintenance. In Wales, my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) made me aware of the challenges with the port of Milford Haven. Although he could not be here today, he has worked closely with me as vice-chair of the APPG for the Celtic sea to ensure the Department’s support of the port of Milford Haven project.

The port of Milford Haven stands ready to create a new green energy terminal in Pembroke Dock. As the closest port to the Celtic sea development sites, the port of Milford Haven’s development ambitions at Criterion quay for a 400 MW test and demonstration phase and a fit-for-purpose site for integration and operations and maintenance activities are crucial to support future commercial-scale phases of FLOW in the Celtic sea.

The APPG’s main ask today is for subsequent rounds of FLOWMIS grants and an increase to the £160 million scheme budget. The Government’s support of Hexicon’s TwinHub project is crucial, especially as the sector has been battling a much-changed economic environment since its bid. With Falmouth port ready to match Government funding, this first stepping-stone project needs that vital FLOWMIS leg-up to see optimal onshore benefits alongside this innovative, leading offshore project. Funding decisions should be made on FLOWMIS as quickly as possible to allow our ports and supply chain to gear up for that huge opportunity to ensure that ports work collaboratively and optimise supply chain expertise.

Another issue that can pose a stumbling block for FLOW, which I am dealing with at first hand in my constituency of North Devon, is the National Grid and cable routes with the White Cross wind farm project. Since my election, I have championed floating offshore wind, and getting the Celtic sea projects right would create huge economic opportunities for the local economy in North Devon.

I have previously raised concerns about the White Cross wind farm because of the route submitted to planning, which would involve tunnelling through several miles of highly designated sand dunes and would severely disrupt several businesses for many years to come. Although some community engagement has been ongoing this week, the community benefit proposed for the project and the manner in which engagement has progressed has been severely lacking. Although local communities are hugely supportive of FLOW, there are environmental concerns with cable corridor routes, and certain developments risk undermining all the support that has been generated along the south-west coastline in particular.

Because of the scale of the project, the decision on whether it goes ahead now lies entirely with the Marine Management Organisation that approved the work to the shoreline and North Devon Council’s planning authority. Although I have no influence on that decision, I am pushing for the community to be properly recompensed for any associated disruption. The White Cross project is not yet through the planning process and is now blighted by an issue with bats. Bizarrely, there are now objections from Natural England, which was the main reason that that cable route was chosen in the first place, as well as nearly 1,000 objections on the North Devon Council planning portal.

The site has been leased from the Crown Estate, and apparently the only viable grid connection is at Yelland, which is a highly contentious site in its own right. Getting from the wind turbines to that connection will be hugely problematic, whichever company tries to develop it. I know that strategic work on the grid is ongoing, but we need to better link these huge infrastructure projects together, as the current piecemeal approach is causing unnecessary distress to communities and businesses and untold environmental damage as a result of a project that is designed to help to reduce our carbon footprint in the long term. Frankly, we need to follow Tim Pick’s strategy to deliver FLOW right around the coast effectively and efficiently.

My genuine fear is that if the budget is not increased adequately for AR6, the Celtic sea project, which we hope has bid, may not proceed, as Hexicon alone will not be a big enough step to the next project. As I have said countless times, for those doubters of wind, the wind blows the other way in the Celtic sea—to the north- east. We therefore optimise our wind resource and energy security by ensuring that all the regions are able to participate in FLOW. Again, I urge the Minister to hear the objectives of the APPG for the Celtic sea to co-ordinate a more strategic approach to this new region for offshore renewables to avoid some of the cabling issues we have already seen on the east coast. The National Grid also needs to work to minimise onshore disruption from that vital infrastructure.

Let me restate the asks. We need dedicated Celtic sea funding and an integrated port and infrastructure strategy, working across the Celtic sea region to derive maximum benefit from FLOW developments and ideally treating the entire region as one national infrastructure project. That could also include establishing sector-based working groups that engage developers, the Crown Estate, National Grid, ports and regional stakeholders to ensure strategically phased developments to support supply chain engagement and prioritisation of infrastructure spend in the region.

Future CfDs need to support multiple FLOW projects a year to ensure their progress and to make up for lost ground in AR5. The individual support for the Celtic sea’s first FLOW project, TwinHub, with recognition of its stepping-stone nature, is vital to ensuring the development of the supply chain. We need to remove the barriers to FLOW and although I know the Celtic sea is a different kettle of fish to FLOW elsewhere, there is one thing in common and that is the barriers to planning and applications.

The barriers to delivering FLOW must be removed to ensure lasting benefits. Streamlining the planning and consenting process and increasing co-operation between Government Departments—from the Department for Energy Security and Net Zero and the Department for Environment, Food and Rural Affairs to the Department for Transport and others, taking a whole systems approach—could be transformational. For the Celtic sea, the APPG preference throughout has been that a single cable corridor to Devon and Cornwall and one to south Wales should be established to reduce sea floor damage and cabling onshore, as the bigger projects go out to sea. A strategic view taken on cable corridors might also reduce costs.

At a deeper level, there is also a skills piece that interlinks with our FLOW projects. The Crown Estate estimates that up to £1.4 billion could be generated for the UK economy, with up to 5,300 new jobs created within the supply chain. The creation of a skills taskforce to strategically bring together sector developers and education providers will unlock the workforce needed to deliver and ensure that local people, particularly those in economically deprived areas, develop career opportunities for now and for future generations. Getting that right has financial implications, so I know some of the decisions will involve the Treasury.

I will continue to lobby for a budget big enough to maximise the number of winning projects and accommodate those who could not bid into AR5. One part of my six-point plan for North Devon is to ensure we fully benefit from the green economy. I am doing that today because, if fully recognised, FLOW will create high-value jobs and strengthen local economies, while bolstering research and development within the industry so that the UK can become a world leader and exporter of FLOW.

--- Later in debate ---

[Selaine Saxby]

I thank all hon. Members for their contributions. I echo the Minister’s comments about the shadow Minister, the hon. Member for Southampton, Test (Dr Whitehead): I wish him all the best.

This debate has been small but perfectly formed. We very much agreed, as has been the case for all Celtic FLOW debates and projects that I have worked on. Whatever happens over the next few weeks, I very much hope that that cross-party consensus continues. Having been with developers and the Crown Estate this week, I know that there is a huge drive for it to succeed. It is about how we get those projects over the line in a pragmatic manner to bring bills down in the longer term. We need to get these things moving; otherwise, we will not get there in the end. I thank everyone for their contributions to the final Westminster Hall debate of this Parliament.

Question put and agreed to.

Resolved,

That this House has considered floating offshore wind and Allocation Round 6 of the Contracts for Difference scheme.

Oral Answers to Questions

Selaine Saxby Excerpts

Tuesday 16th April 2024 Commons Chamber

The Secretary of State was asked—

[Selaine Saxby (North Devon) (Con)]

1. What steps her Department is taking to support floating offshore wind projects in the Celtic sea.

[Sir Desmond Swayne (New Forest West) (Con)]

14. What plans she has to support floating offshore wind farms.

[The Secretary of State for Energy Security and Net Zero (Claire Coutinho)]

Britain is a pioneer of floating offshore wind. We are working with the Crown Estate to lease 4.5 GW of seabed capacity for floating offshore wind in the Celtic sea, and we are supporting emerging technologies with a separate funding pot in allocation round 6.

[Selaine Saxby]

The White Cross project in the Celtic sea has a cable due to come ashore in my constituency, and it advises me that it is unable to agree compensation to businesses disrupted by these works due to a lack of Government guidance. Will my right hon. Friend meet me—and, ideally, come to see where the project is due to make landfall—to find an alternative cable route, and if not, will she ensure that White Cross is in a position to fully compensate the businesses that will be hugely impacted if the planned cable route proceeds?

Offshore Petroleum Licensing Bill

Selaine Saxby Excerpts

Committee of the whole House
Tuesday 20th February 2024 Commons Chamber

[Dr Whitehead]

The hon. Lady is absolutely right. New licences are an international issue. If we had new exploration licences around the world, we would simply produce far more oil and gas than is compatible with the 1.5° climate target. We should just keep it in the ground.

Finally, amendment 21 would go some way towards correcting another element of the carbon intensity test. As currently drafted—the Minister will want to listen to this bit—the test will not take account of methane emissions, which is a serious flaw. The whole case for comparing UK-based natural gas with LNG is based only on production emissions. The emission of methane at various stages of the production and transportation of LNG is, in aggregate, worse than the emissions of UK-produced and piped natural gas, but they are not carbon dioxide emissions, which is what the Bill says should be measured.

LNG’s potential carbon dioxide emissions upon burning are roughly the same as, or perhaps slightly greater than, the carbon dioxide emissions from UK natural gas. As the right hon. Member for Reading West said, that is elevated by the current UK practice of flaring surplus gas, which can be measured in carbon dioxide emissions.

Methane is a much more potent greenhouse gas than carbon dioxide over 20-year and 100-year timeframes. Its lifetime in the atmosphere is shorter than the lifetime of CO₂, but its impact is far more significant. The Climate Change Act 2008 is quite specific on how this should be measured. Section 93, which the Bill mentions but does not act on, states that

“greenhouse gas emissions…and removals of greenhouse gas from the atmosphere shall be measured or calculated in tonnes of carbon dioxide equivalent.”

Proposed new section 4ZB(1) of the Petroleum Act 1998 mentions the carbon intensity of natural gas, but proposed new subsection (3) defines “carbon intensity” as

“the carbon dioxide emissions attributable to its production”.

But carbon dioxide emissions in production are not the principal concern here, as the gas has not been burned at that point. Indeed, I can conceive of smart climate lawyers challenging the test’s validity on precisely that point. The Minister might therefore see amendment 21 as providing a vital lifeline to the integrity of his Bill. To that extent, the amendment might be seen as helpful, but I somehow doubt that he will take it up. To coin a phrase, “It’s the methane, stupid.” The Bill should say so.

Proposed new section 4ZB(4) already gives the Secretary of State the power to amend the carbon intensity test to include emissions other than carbon dioxide. Perhaps the Secretary of State or the Minister will shortly take that up to save the test. We can anticipate a fairly amusing statutory instrument debate when he tries to do that.

Amendment 21 would simply require the Government to produce a report analysing what the impact of that change will be. In the spirit of trying to improve a Bill that, by design, is fairly resistant to improvement, we welcome the amendments tabled by the right hon. Member for Reading West and the hon. Member for North Devon (Selaine Saxby).

The Climate Change Committee and the Environmental Audit Committee have called for a ban on routine flaring and venting, and such a ban is long overdue. A marine spatial prioritisation policy would help to organise and plan an optimal long-term, low-carbon economic strategy for the North sea.

There is clearly significant strength of feeling across the Committee that this is an inadequate Bill, and some of the proposed tests could undoubtedly make a bad Bill a little better, although some of those tests have internal problems. We would not want to vote against those tests, but the only comprehensive climate change and net zero compatible test is the one that we and, in principle, the hon. Member for Brighton, Pavilion (Caroline Lucas) have set out. It is the best available route, within a severely constrained process, to align this deeply flawed Bill with our essential energy security and climate change priorities.

[Selaine Saxby (North Devon) (Con)]

I rise to speak to new clause 2 on spatial prioritisation. The competing pressures on sea space mean there is essentially a spatial squeeze. I fully understand the Bill’s importance, as we all know that the oil and gas industry will have a key role as the UK transitions towards cleaner energy. The Bill will provide reassurance to the industry.

I am grateful that the Government have stated that each annual licensing round will take place only if key emissions tests are met, to support the transition to net zero. I thank the Minister and his team for their ongoing engagement on this issue but, as we seek to turn to renewables and clean energy, we need to ensure that we have the space and infrastructure to carry this forward, otherwise the energy transition will never come to fruition.

I brought up this issue directly with the Minister for Food, Farming and Fisheries, my right hon. Friend the Member for Sherwood (Mark Spencer), at the Environment, Food and Rural Affairs Committee, as my concerns extend beyond just oil and gas. I am also concerned about how floating offshore wind and fishing can cohabit the same ocean space, and I am also concerned about marine protected areas. There is clearly a balance to strike.

It was good to hear the Fisheries Minister’s response about cross-departmental work to ensure that our fishermen have a future in the light of our need to expand our renewable energy sources, but there is an opportunity in this Bill to ensure that we do not repeat these conversations as other energy sources compete for space in the precious waters around our coast. This will help not only the UK’s energy security but our push towards renewable energy, which will support our fishing fleets and retain a simultaneous focus on biodiversity and improving the condition of marine protected areas.

As a coastal MP, all these points are especially important to me. Being an eternal optimist, I think we can do all these things simultaneously if we can plan strategically where we have the opportunity.

[David Duguid]

My hon. Friend is making some very good points, particularly on the spatial squeeze. She says that this is not a choice between one thing and another. Opposition Members tend to see this debate as black and white, and that we have to go in either one direction or the other. Does she agree that, whether from the perspective of fishing, offshore wind or offshore oil and gas, it is very important that we come together so that everyone has a say?

[Selaine Saxby]

As always, I agree with the points my hon. Friend makes. Prioritising space is critical, as the Government have committed to delivering 50GW of offshore wind, which this represents approximately £93.3 billion-worth of investment and requires nearly 8,500 sq km of new marine space. I need to declare an interest, as the chair of the all-party group on the Celtic sea. As such, my particular concern is about the deployment of floating offshore wind, as it will open up areas such as the Celtic sea so that we can generate energy no matter which way the wind blows. As it can be deployed in waters deeper than 60 metres, that technology opens up 80% of our offshore wind resources.

The Celtic sea is an environment where strategic planning at this early point in the development of FLOW—not just for spatial prioritisation on the seabed but for clear planning of cable routes to optimise how power transitions to the grid—minimises blue carbon disruption from our ocean floors and onshore environmental damage from multiple plug-in points. Indeed, given the long-term commitment to energy generation in the Celtic sea, as well as the North sea, the chance to plan strategically and include all future leases within a national framework comes now. More renewable energy and greater energy efficiency contribute more to energy security than new oil and gas. This integrated spatial planning will require new licences to ensure that enough sea space is allocated for nature recovery and climate change mitigation. Otherwise, there is a risk that industrial activities could crowd out those important environmental purposes, which, with the right strategic planning early enough in the evolution of these vital new technologies, can coexist alongside those that are now waning.

Currently, the Bill has no provisions to require spatial prioritisation testing of the geographical blocks that become available for oil and gas search and production. That means that the North Sea Transition Authority will be able to grant new licences in areas of the sea where the cumulative impact of activities is incompatible with the achievement of Government targets in the Climate Change Act 2008 and the Environment Act 2021.

[John Redwood]

Does my hon. Friend accept that in several cases potentially useful oil and gas deposits in the North sea are adjacent to existing pipes and existing development production platforms, so one great advantage would be that the infrastructure is already in place and it has spare capacity because of the decline of traditional fields? That would be far less intrusive, would it not?

[Selaine Saxby]

My right hon. Friend makes a valid point. However, for me, this is about opening up that conversation and making sure that these things are considered in the round. If we are going to put an extra pipe in, we should consider what we are offsetting somewhere else.

Polling found that 80% of the UK public believe our ocean protection laws must be strengthened, and I know how important our waters are to the residents of North Devon and the wider UK. We must ensure that we do all we can on this, while understanding the vital role that oil and gas plays and will play in our energy security. Spatial prioritisation is important to ensure that continuing to drive forward our new green energies is not done at the expense of our traditional industries, such as fishing, and gives due consideration to the marine environment, which we on land owe so much to and are still finding out more about. Balance and optimisation are the objective of this amendment, and I hope the Minister will consider this opportunity, so that we really can have it all and decarbonise our energy, improve our biodiversity, support our fishermen and improve our energy security.

[The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)]

I call the Scottish National party spokesman.

Oral Answers to Questions

Selaine Saxby Excerpts

Tuesday 16th January 2024 Commons Chamber

[Graham Stuart]

I thank the hon. Lady for her support for the introduction of a carbon border adjustment mechanism. This is to make sure that we do not have carbon leakage—to use the jargon—where carbon costs imposed on companies here lead to that production simply going abroad, with no betterment to the planet. His Majesty’s Treasury takes the lead on this particular policy, but I will ensure that her sentiments are passed on to my Treasury colleagues.

[Selaine Saxby (North Devon) (Con)]

Can my hon. Friend confirm that, given all the questions about carbon accounting, sustainability and value for taxpayers’ money, the Government will not be guaranteeing Drax billions more in subsidies?

[Andrew Bowie]

As my hon. Friend knows, we will shortly be consulting on potential support arrangements to help facilitate the transition of large-scale biomass generation to power bioenergy with carbon capture and storage. Power bioenergy with carbon capture and storage could deliver negative emissions to support our climate change targets and the UK’s energy security.

Floating Offshore Wind

Selaine Saxby Excerpts

Thursday 16th November 2023 Westminster Hall

[Selaine Saxby (North Devon) (Con)]

I beg to move,

That this House has considered floating offshore wind.

It is a pleasure to serve under your chairmanship, Dame Angela. I will start by welcoming the work of the Department for Energy Security and Net Zero and, in particular, that of my right hon. Friend the new Secretary of State in developing floating offshore wind—which I will refer to as FLOW for the rest of the debate—right here in the UK.

FLOW represents a huge opportunity for the UK as a whole, but especially for coastal communities such as my own in North Devon. I particularly thank the new Secretary of State for her engagement following the results of the contracts for difference allocation round 5. Indeed, in her own maiden speech, she celebrated the role of her constituency in pioneering renewable energy and celebrated our being a world leader in offshore wind.

Yesterday’s announcement that the Government have halved inflation since the start of the year was very welcome, as is the reduction of energy bills. As we all know, the price jump was caused by Russia’s illegal invasion of Ukraine, but it demonstrated just why we need to accelerate the development of sustainable British energy generation. We live on a very windy, very tidal and sometimes even sunny island, and my North Devon constituency is particularly blessed with all three. If we can increase the amount of energy that we generate from these renewable sources, British households will be better insulated from global energy price shocks and able to rely on secure, clean energy.

We have already seen the potential that onshore wind and fixed offshore wind has, and it is fantastic to see it generating more and more of our energy mix. FLOW can potentially take that even further. A common criticism of our continued development of wind turbines is that they only work when the wind blows the right way. Traditionally, our offshore wind farms are situated off our north-east coastline, where the waters are shallower and the current is less temperamental—conditions that work for fixed offshore wind. In the Celtic sea, the wind blows the other way around, but the Atlantic Array was unable to go ahead because of the deeper waters and the strong currents coming in off the Atlantic. FLOW will open up areas such as the Celtic sea, so that we can generate energy no matter which way the wind blows. As it can be deployed in waters deeper than 60 metres, this technology opens up 80% of our offshore wind resource.

FLOW is set to make up to 5 GW of our energy generation by 2030, and 50 GW by 2050. It has the potential to bring in 29,000 jobs and £43.5 billion in gross value added to the UK by 2050, but we must ensure that we are ahead of the curve by not just deploying this technology for energy generation but harnessing its full potential by developing the manufacturing element as well.

The lack of bids in AR5 was incredibly disappointing for developers across the industry. Missing out on a year of development has increased uncertainty in the market at a time when both the EU and United States are offering more support to develop FLOW. It also put at risk £20 billion of short-term investment into the UK, which will be crucial for developing not just FLOW itself but the associated manufacturing and supply chain.

We are currently a global leader. Of the 200 MW of FLOW deployed worldwide, 70 MW can be found here in the UK. However, to maintain our position, we must provide developers with certainty and get this technology off the ground and out to sea. There is concern about FLOW being treated the same as fixed offshore wind in AR5. When fixed offshore wind was at a similar point in its development, it had access to final investment decision enabling for renewables and renewables obligations certificates. FIDER and ROC both provided revenue and business-case certainty, reduced competition and created the conditions for much-needed investment, and we are now reaping those benefits. Fixed-bottom wind farms were able to trial different cutting-edge technologies and take higher risks, where they could accurately model best-case and worst-case scenarios.

FLOW is currently in a similar situation. Pre-commercial projects in the UK need to be able to trial different approaches. FLOW will reach price parity with fixed, but with this new complex technology, it cannot be all about price at this stage in its development journey. As one industry expert observed at our last meeting of the all-party parliamentary group for the Celtic sea:

“We have to stop obsessing about cost reduction for a technology that has not yet been deployed at scale, that if we support it to get it going like we did for fixed wind, costs will fall. Cost reduction occurs by deployment of technology, not the passing of time.”

The administrative strike price offered today for AR6, alongside the announcement that offshore wind will get its own pot, provides the Government with the potential to unlock a record level of investment in FLOW. To ensure we achieve that potential, I ask that the budget for offshore wind in AR6 is large enough that it is not consumed by one project, so that we can see as many eligible projects as possible get afloat.

That is counterbalanced by the need to ensure that the budget, to be announced next March, is not set so tightly that it forces violent competition during this fledgling stage of FLOW’s development. Today’s AR6 announcement is warmly welcomed by the industry and means we still have the opportunity to hit 5 GW by 2030, to safeguard those stepping-stone projects, and to cement our position as a global leader. It is also crucial to rebuilding confidence in the existing FLOW development pipeline. Now that we have the administrative strike price, I would welcome the bringing forward of AR6 for FLOW technology so that we can keep pressing to get FLOW afloat and minimise the delays caused by AR5.

Developing FLOW turbines and substructures is a considerable engineering endeavour, as substructures alone can be up to 80 metres across and weigh thousands of tonnes, with turbine heights expected to reach as high as 300 metres, as tall as the Shard. The manufacture and assembly of components will therefore need significant port requirements if the UK is to seize the first mover advantage. The £160 million floating offshore wind manufacturing investment scheme, known as FLOWMIS, which opened for bids this spring, is welcome, and the industry looks forward to seeing a fair share coming to key Celtic sea ports. However, funding decisions should be made on FLOWMIS as quickly as possible to allow our ports and supply chain to gear up for this huge opportunity, along with a strategic overview to ensure that ports work collaboratively to optimise supply chain expertise.

Developers also need certainty on leasing rounds to secure the sites they need to develop a full business case and make applications for future allocation round auctions. The recent update from the Crown Estate on the steps it is taking to increase transparency through the auction process was welcome. However, there remains uncertainty on the timelines for the leasing round, and it now appears leases will not be awarded until later in 2024. At this stage of technology development, it is essential that innovation projects start their journey now, if they are to succeed and help grow a flourishing UK supply chain. Initial opportunities need to be maximised to develop the capabilities to secure the economic benefits of the subsequent large-scale FLOW projects so that we can maximise exports to the growing global market in the future.

My right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) chairs the Welsh Affairs Committee. He could not join us today, but he has done a huge amount of work to support FLOW and the projects potentially coming onshore in south Wales, where community engagement has ensured that they are now hopefully ready to bid straight into AR6 and proceed. The Committee recently released “Floating Offshore Wind in Wales”, which is a relevant document for this debate. I was glad to see its recommendation for the Department for Energy Security and Net Zero to work with the Crown Estate to provide visibility beyond the current leasing round and to bring out a strategy as to how it will be delivered.

Although I welcome the Government’s response to the report that the “Powering Up Britain” energy security plan already sets out the steps that they are taking, it would be good to see a more strategic lead on the development of FLOW, especially in the Celtic sea, where it is a brand-new technology. We need to look at the development of FLOW strategically, particularly in the Celtic sea and at a national level. We must work on the main prize, which is the gigawatt arrays and getting the demonstrators that are ready to proceed afloat.

Far too much time and energy is being spent in my constituency on the distraction of the seven turbines of White Cross. The time it takes to get these projects afloat means that early decisions are out of date by the time we get to crucial decisions. Indeed, the controversial White Cross project due to come ashore in my North Devon constituency may have only been able to secure a plug-in point at Yelland when it applied back in 2021, but National Grid seems to think now that it would be possible to connect at Alverdiscott, where the majority of the other projects coming into England will plug in. However, I suggest that this hugely unpopular project at White Cross, which has now attracted more than 500 objections from across North Devon, including from our Biosphere, Natural England and an energy expert, will never get through planning. Community consultation and engagement are vital for such projects to succeed. This project is being bulldozed through my community, taking up vital local authority planning time when planning is the No. 1 reason that development of all types is delayed in North Devon.

In its objection to the development, Natural England said it still has fundamental concerns about the application as currently submitted. It also asks that the application is put on hold until further information and evidence are provided. I hope that someone can look more strategically at the Celtic sea, incorporate White Cross into the main projects and consider the whole Celtic sea project as one national infrastructure project, rather than subjecting small planning authorities to this amount of additional work. Indeed, we should learn from what happened down the east coast and secure one cable corridor in the Celtic sea, probably a split into Pembroke and Alverdiscott. We do not need one into Yelland as well. We should recognise that areas that rely on tourism are potentially less receptive to cables landing in beach car parks and to reduced income for multiple businesses in the area. I hope the Minister can bring whatever powers his Department has to bear to ensure that White Cross, if it goes ahead, delivers proper community benefits, fully recompenses the community for the inevitable damage to our core current industry, and shows more respect to the community of North Devon that I represent than its engagement programme has to date.

I set up the APPG for the Celtic sea to bring a strategic overview to the development of FLOW. That is not only about the process of getting the turbines afloat, which is obviously the priority, but looking further down the line to the supply chain, where cabling will land, the use of our marine areas, the environmental concerns, the operation and maintenance of the turbines once they are afloat, and how we service what should be an enormous industry in our region.

As has been seen with the proposed White Cross development in my constituency, many people who are otherwise supportive of the development of FLOW are concerned when it has an outsized and unnecessary impact on the local environment and businesses. It is crucial as we move forward that cabling routes are planned for the 250 turbines to minimise the disruption of blue carbon locked into the seabed, and we need to continue to focus on that long-term objective of getting the 250 turbines afloat.

Similarly, consideration needs to be taken for local industries, such as fishing, and of the effect that turbines will have on marine wildlife, such as seabirds. It is certainly not the case of supporting one of those things over the other, but by considering the development as a whole, we can minimise the impact the turbines and associated activities will have and can ensure that we develop clean green energy with community support.

As I have laid out, FLOW will be key to our secure and sustainable energy future. While I welcome today’s AR6 administrative strike price, I reiterate my ask that the AR6 for FLOW specifically—if at all possible—is brought forward. There is a concern that even the one- year delay may cause a far greater delay to these projects due to international supply chain pressures. We cannot lose our first mover advantage and watch development of this exciting technology float overseas. I ask the Government to consider the Celtic sea development as a national infrastructure project so that we can consider it as a whole and bring the benefits to all our communities in the south-west and in Wales as swiftly as possible. Clear long-term plans are the best thing for the industry and the other industries that rely on our beautiful coastal areas.

--- Later in debate ---

[Kirsty Blackman (Aberdeen North) (SNP)]

Thank you for chairing this debate, Dame Angela. I congratulate the hon. Member for North Devon (Selaine Saxby) on securing the debate and allowing us to have the opportunity to talk about floating offshore wind.

I really enjoy coming to Westminster Hall, where we can have a conversation in which we largely agree. In the main Chamber, it is not often that Conservative Members will stand up and I will agree entirely with the content of the speeches they make, but I think we are all pointing in the same direction on floating offshore wind; we all have the same ambitions for it.

Currently, two out of four of the floating wind groups in the world are in Scotland. That is a pretty amazing statistic, and it is amazing how much better it could be. With the calls on AR6, the more we ensure that that happens as quickly as possible, so that we do not lose any more of the time that has been lost because of the farcical issues with AR5 and so that these projects have the confidence, ability and agreements with Government in place to go ahead, the more likely we are to be able to capitalise on this technology.

There are an awful lot of moving pieces—that was not meant to be a pun—in relation to this. An awful lot of things have to come together to ensure that it is as successful as possible. We have heard mention of grid connections: I would push the Minister again to ensure that, whatever happens with floating offshore wind, or, in fact, offshore wind in general, as much pressure as possible is put on to ensure that those grid connections are delivered timeously. Having spoken to a number of organisations that are leading the way on renewables, I think that not being able to get those grid connections is genuinely putting a number of the projects at risk. In some cases, the issue is communication, rather than the length of time. The length of time is not ideal—in fact, it is pretty bad—but if they will not even come back to say when the connection could be made, that causes problems. Even an increase in the communication on that would help investor confidence and would help with some of the final decision making needed in order for the project to go ahead.

Mention was made of some of the work being done here, and I agree with the hon. Member for North Devon that the budget needs to be large enough for multiple projects to go ahead. We have done incredibly well with ScotWind. Some of the clauses and requirements that were put in by the Scottish Government related to local content and developers having to ensure that they proved the work that they were doing with it. It is incredibly important: most people do not see Aberdeen as some sort of manufacturing hub, but the Minister will know very well that an awful lot of manufacturing goes on in and around Aberdeen. People see us as an oil and gas capital—an energy capital—but we make plenty of widgets, often for offshore work. A lot of that work is incredibly transferable as an awful lot of the incredibly precise instruments that are used for managing and measuring offshore oil and gas installations can be used for offshore wind, particularly once we get far away from the coastline.

On the transferability of skills, I understand that there has been something of an agreement between OPITO and the Global Wind Organisation, and a reset around passporting the offshore skills, and accreditations that are available. The relationship has been somewhat fraught in the past, particularly between some of the unions and organisations such as GWO. Anything the Minister could do to ensure that these organisations keep collaborating and working together would be in the interests of his and my constituents and all those around the UK who work in the offshore industry, so that they can use the skills they have already and so that new entrants can join the offshore industry without the need to go through multiple different, yet incredibly similar, training courses. Helicopter ditching training is the same whether someone is working in an offshore wind installation or working on an offshore oil and gas installation. There is very little difference. Anything that can be done to ensure that the passporting of those skills is allowed between the two industries will ensure that we have a better, more flexible workforce. The reality is that there is an awful lot of companies currently working in both spheres. They are working in offshore oil and gas, and they are working in offshore wind and other renewables. Innovation and Targeted Oil and Gas will particularly ensure that those two things are incredibly integrated. Just as the companies are working in those spheres, we need the individuals to be able to work in both of those spheres too.

I also urge the Minister to support—I am sure he does—Developing the Young Workforce to ensure that young people in school, particularly in our area of the north-east of Scotland, are not saying, “I’m not going into engineering, because my uncle was made redundant in the oil and gas industry.” I do not want young people to have that concern stopping them pursuing careers in science and technology, which I am quite concerned will happen. I do have a huge amount of confidence in DYW; I do not want to try and take away from that, and I am glad about what it has done. DYW was created as a Sir Ian Wood project, and it has put a link person in each of the secondary schools in the local area to ensure that businesses and secondary schools are linked and that we are creating a workforce for the future. But we need to ensure that science and technology jobs are sold to young people, who should not be scared away by previous family experiences.

In terms of science and technology and development of things, there is the Advanced Research and Invention Agency, and I was on the Bill Committee for the related Bill. I asked for ARIA to focus on renewable technology and on technology that would ensure we are moving towards meeting our climate change objectives, and towards net zero. The Government refused that. I do not imagine the Minister could tell me now, but at some point it would be useful to know whether ARIA has been directed in any sort of way to focus on green technology. It is important that with those cool, new inventions coming out as a result of that Government funding going to ARIA, we consider tackling the most important issue facing the planet today, and ensure that we meet our objectives in relation to that.

I have one last thing to say on jobs and on the transferability of skills. When we are building floating offshore wind, the likelihood is that if you are building a very large floating offshore wind platform, there will be people living out there to take part in the building. It will not be dissimilar to the kinds of routines that people undertake working on an offshore oil and gas installation. They will be doing three weeks on, three weeks off, they will be travelling in helicopters and they will be spending a significant length of time offshore. My constituents and other people working in the offshore industries have transferability of skills. They have a lifestyle set up to work on a three-and-three basis, so they will find it easier to transfer.

We have probably not spoken enough about how— I did make this point to Offshore Energies UK this week—that workforce has got the mindset and the lifestyle. It is not ideal that in Aberdeen we have a lot of women at home looking after the kids while the guy works offshore, but if your husband is working three weeks on, three weeks off, there is very little you can do other than have a part-time job. When we are trying to find that workforce, we need to think about the lifestyle choices that people are making, and realise that there is a workforce in Aberdeen city and Aberdeenshire, and there is actually a workforce in a lot of places in, for example, the north of England. People who work offshore will be able to go and do it pretty easily.

I want to focus for a moment on the ownership of the wind that we have. I have been to visit the Kincardine wind farm—I went on a boat, and I was incredibly, unbelievably sick. I have not been on a boat since, and I will not be going on a boat ever again as a result, but it was an amazing thing to see up close—it was really cool. The flexibility of those wind turbines is immensely cool: they are able to turn and tip, and they are remotely controlled. I thought that wind farm was ginormous—the turbines are absolutely huge—but I was told that the ones that we are likely to have further offshore are something like three times the size; they will be huge pieces of engineering equipment, and it is really important that we have as much local content as possible.

Ports have been mentioned, and we need to work collaboratively with them. It is difficult to do that, particularly because ports have different ownership methods. In Aberdeen, we have a trust port that works on a different basis from some of the commercial ports. I do not envy the Government’s job of having to ensure those collaborations, but I encourage them to do that and ensure that, where a differential offer is needed for different ownership of port models, that is in place so that ports can speak to each other, and so they understand the impetus and the structure that drives and creates them.

[Selaine Saxby]

I thank the hon. Lady for her kind words and her speech. Does she agree that, because we do not have the same learned past and piecemeal development, the Celtic sea is like a blank canvas, so there is an opportunity to take learning from elsewhere? We do not want ports to replicate each other, but they should work collaboratively to get momentum behind these projects.

[Kirsty Blackman]

The hon. Lady is absolutely correct. That is exactly what needs to happen: one port should focus on one thing and another port should focus on another thing. I know the Government do not like to pick winners, but encouraging ports to work together collaboratively is not about squashing competition; it is about ensuring that these projects happen. I completely agree with the hon. Lady on that.

We previously called for tax relief or a subsidy scheme, like the US and the EU have, to encourage green energy companies to invest. It is pretty shocking that the Government of Malaysia own more of the UK’s offshore wind capacity than UK public bodies. I think UK public bodies should own it, but one of the issues is that pension funds have not had the flexibility to invest in a lot of renewable technology. Anything the Minister can do to push the Chancellor to ensure that pension funds have the extra flexibility to invest in green tech would be incredibly important. We know that these things will make money; they are technologies of the future.

In the North sea, we have the gold standard for offshore health and safety. We have been through incredible tragedies such as Piper Alpha, and therefore have incredibly high health and safety standards in the North sea. I would like much more floating wind to be developed in the UK, not just because it would be great for jobs and tax revenue, but because those incredibly high safety standards would be embedded at the very beginning of the expansion of this technology. When we sell it around the world, people will look at what we have done here and, hopefully, embed the highest possible safety standards in all floating offshore wind anywhere around the world. Floating offshore wind does not have exactly the same issues as offshore oil and gas, but it is still very important that we have the best possible safety standards.

On consistency and certainty for companies, I am concerned that the UK Government’s direction of travel on things such as AR5, and the Prime Minister’s statements about cutting back climate change targets, including on net zero, have affected investor confidence. Since I became an MP, all that the energy companies have asked of me is that they have certainty, particularly on things such as tax regimes. Companies are genuinely finding it difficult to convince investors to invest in the United Kingdom, because investors are concerned that the Government will stop backing these things. The more positive statements the Government can make about things such as floating offshore wind, the more confidence they will give the industry to make final investment decisions and ensure that as many of these projects as possible go ahead, whether in the North sea or the Celtic sea.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Andrew Bowie)]

It is a pleasure to serve under you in the Chair this afternoon, Dame Angela. After quite an exciting political week, it is a pleasure to end with such an—on the whole—agreeable and positive debate in Westminster Hall. I think we all agree on the potential of floating offshore wind and the huge contribution it makes to the United Kingdom, our economy and our drive towards net zero, energy security and independence.

I congratulate my hon. Friend the Member for North Devon (Selaine Saxby)—she is a friend—on securing this important debate. She has been a vocal champion of floating offshore wind at all levels—from her constituency through to the wider Celtic sea region—in her role as chair of the all-party parliamentary group for the Celtic sea. She rightly highlighted the benefits that this new technology could bring to the United Kingdom as a whole.

Far be it from me to disagree with the shadow Minister, the hon. Member for Croydon Central (Sarah Jones), but the United Kingdom is actually one of the world leaders in floating offshore wind. The world’s first floating offshore wind farm was built in UK waters. Since then, we have built a strong base of new projects and development to grow our industry still further. Indeed, in the oil and gas industry, which has already been referenced by the hon. Member for Aberdeen North (Kirsty Blackman)— my constituency neighbour—and which surrounds our constituencies, there are opportunities for floating wind to play a crucial role in decarbonising North sea production, by accessing deeper waters and providing electricity to those platforms.

Our 80 MW of currently installed floating wind capacity builds on our world-leading status in fixed-bottom offshore wind deployment—not that anyone would know it, listening to the Labour party. We have over 14 GW of installed capacity—the most in Europe—with the first, second, third, fourth and fifth largest offshore wind farms in the world generating power right now. Contrary to the Labour party’s castigation of this Government’s record, we have gone from only 7% of renewable electricity on the grid in 2010—when Labour left office—to 48% in quarter 1 of last year. We have decarbonised faster than any other G7 nation, at the same time as growing the economy.

The opportunity for floating offshore wind is significant. The Global Wind Energy Council has said:

“The market is nascent, but could be huge: 80% of the world’s offshore wind resource potential lies in waters deeper than 60m.”

That is too deep for fixed-bottom wind. The UK’s Offshore Renewable Energy Catapult’s Floating Offshore Wind Centre of Excellence has estimated that floating offshore wind has

“the potential to deliver £43.6bn in UK gross value add…by 2050, creating more than 29,000 jobs in the process.”

Our 5 GW ambition recognises that and the potential for floating wind to play a key role in our energy mix as we move steadily towards net zero. We are committed to building on the UK’s position and to placing the UK at the forefront of the development of this exciting new sector. However, we know that 5 GW is a stretching ambition, and we are working hard to create the right environment for investment and to address barriers to deployment.

First, we recognise the crucial importance—raised today by every Member who contributed—of port infra- structure to floating offshore wind. That is why we launched the £160 million floating offshore wind manufacturing investment scheme—or FLOWMIS for short. That funding will help leverage the vital investment needed in port infrastructure to deploy floating offshore wind at large scale. FLOWMIS closed for applications on 27 August, and I can reassure Members that we are assessing all the bids we received.

Secondly, we recognise the importance of the right support mechanisms through the world-leading and envied contracts for difference scheme. The scheme is looked to worldwide as the model for how to support the deployment of renewables, and CfD auctions have so far awarded contracts totalling over 30 GW of new renewable capacity across all technologies, including around 20 GW of offshore wind. Last year’s allocation round, AR5, was a success story for many technologies, including marine energy and the first three geothermal projects.

However, we recognise the shortfall in fixed-bottom and floating offshore wind, and I acknowledge the concerns that my hon. Friend the Member for North Devon and others raised at the time and this afternoon. We reflected carefully on the results of AR5, and I trust that today’s announcement detailing the parameters for next year’s allocation round, AR6, demonstrates that we have listened and responded to concerns. The administrative strike price for floating offshore wind has increased from £116 to £176 per MWh—an increase of 52% in real terms from AR5—recognising the unprecedented upward pressure on project costs, which, as we have seen, have affected the industry worldwide. We hope today’s announcement will bring forward viable floating wind projects as we look to boost investment in the industry.

Thirdly, we recognise the importance of a long-term pipeline of projects to give investors the confidence that they need to take long-term decisions. The UK has the largest floating wind pipeline in the world, based on confirmed seabed exclusivity, with around 25 GW already agreed, including through the ScotWind leasing round referenced today and the INTOG process.

[Selaine Saxby]

Could my hon. Friend clarify something in today’s AR6 announcement? We all know that there were two projects ready to bid in AR5, and at this point there are two projects ready to bid. Now that the strike price seems to be acceptable to all concerned, is there any opportunity for us to accelerate the decision for these two projects and then effectively to have an AR7 for all the projects in the next pipeline, so that we can get these ones afloat?

[Andrew Bowie]

I understand very much why my hon. Friend wants that to be the case, but we must recognise that one reason for the success of renewables, including in this country, has been the predictable options we have had. Developers are already planning for AR6 in March next year, and bringing the round forward any further could jeopardise it, not amplify it, so we are reluctant to do that. However, I hope the confidence the industry will receive from today’s announcement means that AR6 will be a huge success. We all need it to be, and that is why we took that decision.

As my hon. Friend will know, the Crown Estate is also moving forward with its plans to launch leasing round 5, making available areas of seabed capable of supporting up to 4.5 GW of capacity in the Celtic sea. The Government fully support those plans, which represent the first opportunity for commercial-scale floating offshore wind projects in the region. We also recognise the importance of a long-term pipeline in the Celtic sea beyond leasing round 5. We will continue to work closely with the Crown Estate on that as we seek to realise the full potential and opportunities represented by floating offshore wind in the Celtic sea. The Crown Estate is due to make further announcements on its plans before the end of the year.

We recognise the importance of dialogue between industry and Government in driving progress. The floating offshore wind taskforce is co-chaired by industry and Government. Its first report, in March this year—“Industry Roadmap 2040”—has been highly informative in shaping our understanding of the specific demands on port infrastructure needed to support floating wind at scale. The taskforce is currently working on a vision to 2050, due for publication in quarter 2 next year, which will set out the potential prize that floating offshore wind could offer the UK.

We will continue to work closely with industry, through RenewableUK and the Offshore Wind Industry Council, to assess supply chain needs and opportunities for the UK and to develop an industrial growth plan—an IGP—to support the growth of sustainable supply chains.

--- Later in debate ---

[Selaine Saxby]

I thank all hon. Members for taking part in the debate, and particularly the Minister and his team for their ongoing engagement ahead of AR5. I raised the matter of the strike price 22 times in the Chamber, and I think everyone is well aware of my views on AR5. I hope that we can rectify the issue as we move into AR6 and that the voice of my community of North Devon will be heard, because some of the issues we are dealing with locally will be replicated around the coast. We need to get these things right if communities are to welcome these developments, as they have done up until this point.

We also need to recognise some of the issues in AR6. Yes, we can forecast where this development is, but the planning is being rushed so that a bid can be made in AR6—if it cannot be made in AR6, it may not be made at all. That makes you wonder why those involved are bidding at all if they are not in it for the long term, but also whether we are creating some unintended consequences through the processes we are putting in place. I heard the Minister, but I asked 22 times last time, and I have asked a couple more times in this debate, if the Government might reconsider the speed at which we deliver AR6 for floating offshore wind.

Question put and agreed to.

Resolved,

That this House has considered floating offshore wind.

Oral Answers to Questions

Selaine Saxby Excerpts

Tuesday 19th September 2023 Commons Chamber

[Peter Aldous (Waveney) (Con)]

1. What recent assessment she has made of the effectiveness of the contracts for difference scheme in supporting low-carbon electricity generation.

[Selaine Saxby (North Devon) (Con)]

2. What assessment she has made of the potential implications of the outcome of the contracts for difference allocation round 5 on the future development of floating offshore wind.

[Mr Speaker]

I welcome the Secretary of State.

--- Later in debate ---

[Claire Coutinho]

I thank my hon. Friend for his long-standing support in this area and I can confirm that we are wasting no time in engaging the sector in advance of AR6. I personally spoke to offshore wind stakeholders following AR5 and confirmed our commitment. The Minister for Energy Security and Net Zero held a roundtable with the sector on 12 September. We are listening to the sector and annual auctions mean we can respond quickly.

[Selaine Saxby]

Question 2 please.

[Claire Coutinho]

I know that as chair of the all-party group on the Celtic sea my hon. Friend is a long-standing supporter of offshore wind. We have announced that AR6 will open in March 2024 and we have published an indicative timetable. We are supporting research and development in floating wind technology via the floating offshore wind demonstration programme, announcing up to £160 million in capital grant funding.

[Mr Speaker]

Can we work to the order, as it is a grouped question? The question should not be answered in that way. Selaine Saxby should be asking a direct question.

[Selaine Saxby]

Thank you, Mr Speaker. I am keen to understand better what more can be done to assist floating offshore wind in AR6 following what happened in AR5.

[Claire Coutinho]

I know my hon. Friend is a long-standing supporter of offshore wind. We have announced that AR6 will open in March 2024 and we have published that timetable. We are supporting floating wind technology through different programmes and manufacturing investment schemes too.

Offshore Wind Contracts

Selaine Saxby Excerpts

Tuesday 12th September 2023 Commons Chamber

[Graham Stuart]

I was pleased to see the other day that the rumours of the right hon. Gentleman no longer being in his position were not true. It is perhaps understandable in that context that he is so passionate about this highly successful round that has seen 3.7 GW on an annualised basis. I think that is a record round. He was a member of the previous Labour Government who left this country with 6.7% of its electricity coming from renewables. In the first quarter of this year, 48% of our electricity was from renewables. It was this Government, with our contracts for difference system, who transformed the economics of offshore wind. We have 77 GW of offshore wind in the pipeline—more than enough. We have 7.5—[Interruption.] The right hon. Gentleman understandably, given the weakness of his arguments, wants to heckle at all times, knowing how easy it is to dismantle them. He asks me where that capacity is, and I can tell him that 7.5 GW is currently under construction.

As ever, the right hon. Gentleman fails to be on the side of consumers. We moved to an annualised auction precisely to ensure that we could learn the lessons from each round, add them to our industry insight and ensure that we could move forward. The projects take multiple years to be developed, and none of them has disappeared. I predict that, moving on from the triumph of 3.7 GW of renewables, which came through successfully on Friday, allocation round 6 will be more successful still. We will continue to build our reputation as the country that has cut emissions more than any other major economy and that has transformed our electricity generation. He mentioned insulation—how he has the gall, I do not know. We have moved from 14% of homes being properly insulated when he left power to over 50% by the end of this year.

[Selaine Saxby (North Devon) (Con)]

I thank the Minister for his engagement with this process, particularly with the new technology of floating offshore wind. Three floating offshore wind projects were due to bid in allocation round 5 but none did, due to the low administrative strike price. As chair of the all-party parliamentary group for the Celtic sea, I have repeatedly been told that these projects are part of our future energy supply. Can he outline what steps he is taking to ensure that these projects will float in allocation round 6 and to give confidence to developers in the region?

[Graham Stuart]

I thank my hon. Friend, who is an absolute champion of floating wind and the economic opportunities it offers for her area and the rest of the UK. I was delighted to speak to her last week and meet her yesterday, and I pay tribute to her efforts. We have the largest floating wind pipeline in the world, based on confirmed seabed exclusivity arrangements. We have around 25 GW already identified, including through the ScotWind leasing round and innovation and targeted oil and gas—INTOG—processes. As she, as a great champion, knows, the Crown Estate is moving forward with its leasing round 5 for up to 4 GW of capacity in the Celtic sea this year. We have been the world leader on floating energy and we are going to stay the world leader. Thanks to the efforts of my hon. Friend, I know that we will have support across the House.

Energy Infrastructure

Selaine Saxby Excerpts

Wednesday 5th July 2023 Commons Chamber

[Selaine Saxby (North Devon) (Con)]

Net zero by 2050 is not an arbitrary target but a scientific assessment of what is needed to limit the impacts of climate change. It will require significant economic changes. The Government are rightly not making uncosted spending commitments but providing a signal to business and letting the market do the heavy lifting. Despite huge progress being made on net zero, investors need reassurance that the UK will continue to be a leader.

I rise to speak about the potential of the Celtic sea and the possible lost opportunity if we do not speed up the process to get projects floating. As chair of the all-party parliamentary group for the Celtic sea, I strongly support the Government’s target of having 5 GW of floating offshore wind by 2030, and I am delighted that the Celtic sea has been identified as a key development opportunity to complement existing deployment in the North sea for the simple reason that the wind blows the other way round there. We need to develop both areas to optimise wind energy production.

I thank my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb)—we work together on the APPG—for securing this important debate as the development of FLOW is a once-in-a-generation industrial and levelling-up opportunity for communities right the way around the Celtic sea, from his constituency and along the south Wales coast to mine in North Devon and down through to Cornwall. While I welcome the £160 million floating offshore wind manufacturing investment scheme, which opened for bids this spring, I look forward to seeing a fair share coming to key Celtic sea ports. Funding decisions on FLOWMIS should be made as quickly as possible to allow our ports and supply chains to gear up for this huge opportunity.

The sector presents enormous economic opportunities for the UK, with recent estimates suggesting that it could add 29,000 jobs and bring £43.5 billion in gross value-added to the UK by 2050, with investment particularly concentrated in the North sea and, hopefully, the Celtic sea. It is for those reasons that I am passionate about FLOW in the Celtic sea as it presents an opportunity to create an industrial renaissance of our ports and supply chains in south-west England and Wales.

Despite the success of the twin hub project in Cornwall in allocation round 4, the ambition to have the Celtic sea as a key contributor to reaching the 5 GW target for 2030 appears to be delayed, with the announcement of the results of AR5 not coming until September, and it looks increasingly likely that AR6 will also be behind its original schedule. It is important to note that those investing in such schemes are international companies and that there are growing overseas opportunities available to them.

RenewableUK and the wider industry advised that the administrative strike price was possibly too low to make some bids commercially viable in AR5. The process is obviously still ongoing, but I hope that the Department is taking steps to ensure that the strike price in the next leasing round takes into account the rising global pressures of the last 12 months plus the price of developing an innovative new technology in a region that has not yet had the opportunity to develop a supply chain, as this is a new industry for the Celtic sea. Since AR4, the global picture has changed markedly with industries such as FLOW now facing unprecedented global economic pressures, which have led to construction costs rising by 20%.

The UK is in a race against global competitors. Only 200 MW of FLOW is deployed worldwide, and 40 MW of that is in the UK, but if we do not act decisively, we could lose out to pressure from the US and the EU. AR5, as designed, may secure only about 30% of all the available shovel-ready projects. If projects do not begin building, it is questionable whether the supply chain and ports will have sufficient confidence in the sector to start investing. In that situation, there is a risk that we will have 2 GW less floating wind by 2030 than the original target and projection, which will be detrimental to both the UK’s supply security and the cost of energy.

The auction also potentially puts £20 billion of short-term investment into the UK at risk, as well as thousands of jobs, which will disadvantage us globally. If the UK is to compete globally, strike prices must be set appropriately to kick-start this emerging industry into a sustainable source of jobs, skills development and value, and not only in the Celtic sea but across the United Kingdom as a whole.

An additional financial challenge has been the delays to the commencement of the much-anticipated Celtic sea leasing round, which is managed by the Crown Estate. Although I warmly welcome yesterday’s confirmation of new sites, developers need certainty as quickly as possible to develop a full business case and make applications to future allocation rounds and auctions. At this stage of technology development, it is essential that innovation projects start their journey now if they are to succeed and help grow a flourishing UK supply chain.

Initial opportunities must be maximised to develop the capabilities to secure the economic benefits of the subsequent large-scale FLOW projects, so that in future we can maximise exports to the growing global market. However, industries have not been provided with the certainty they need as, despite yesterday’s market update from the Crown Estate, there appear to be delays in bidding due to spatial and policy issues. I ask the Minister once again for an urgent meeting with the Secretary of State to discuss the future delivery of FLOW in the Celtic sea.

If FLOW is not successful in AR5, there is a risk that we will have 2 GW less floating wind by 2030 than the current target and projection—detrimental to both the UK’s supply security and the cost of energy. FLOW in the Celtic sea is in danger of not realising its full potential and not making the meaningful contribution it rightly should to the UK’s 5 GW target by 2030.

Net Zero: 2050 Target

Selaine Saxby Excerpts

Tuesday 6th June 2023 Westminster Hall

[Selaine Saxby (North Devon) (Con)]

It is a privilege to serve with you in the Chair, Sir Christopher. Many thanks to my right hon. Friend the Member for Spelthorne (Kwasi Kwarteng)—it is a pleasure to be back discussing floating offshore wind with him. As chair of the all-party parliamentary group for the Celtic sea, both he and the Minister have spoken to me at length on this issue.

I fully support the UK Government’s commitment to ensuring that floating offshore wind makes up 5 GW of energy by 2030, but everyone will recall that the Celtic wind blows the other way to the wind in the North sea, which is why it is vital that this project goes ahead. The recent administrative strike price in the allocation round for contracts for difference did not, unfortunately, take into account the unprecedented global economic pressures that have led to costs rising by 20%.

An already challenging picture in the Celtic sea has been exacerbated by delays in leasing rounds for projects by the Crown Estate, as well as the lengthy amount of time that key strategic ports have had to wait for the Government to announce the much welcomed floating offshore wind manufacturing investment scheme, which is essential to the funding to deliver port infrastructure. I fear that, at this pace, we will miss the opportunities of flow in the Celtic sea by 2030, and potentially deter much needed international investment into the Celtic sea.

I agree with my right hon. Friend on buildings, but I have a particular concern as a very rural MP. Some decisions around rurality and how we change our housing need to be looked at differently. That is why I supported the ten-minute rule Bill of my right hon. Friend the Member for Camborne and Redruth (George Eustice) on hydrotreated vegetable oil as an alternative for oil fired, which is used in 25% of off-grid properties.

I would like to come to biomass. I declare an interest as chair of the all-party parliamentary group for the wood panel industry, which is not the stuff on the walls but basically kitchens and the like. I thank the Minister for his engagement on this matter. In my mind, burning wood for energy is a short-sighted and environmentally damaging endeavour. Wood is too valuable a resource to simply burn, given it is the best way to sequester carbon and avoids the use of environmentally damaging materials in the economy. Wood-dependent industries are struggling to get the wood supply they need. Addressing that should be a focus of policymakers. We need to change direction.

We cannot rely on bioenergy with carbon capture and storage for energy security under net zero scenarios. We are fooling ourselves if we think that we can. Proponents argue that BECCS will help to contribute to energy security, but that is inaccurate. BECCS comes with an energy penalty, as it requires energy to power the CCS unit and to provide power to the grid. Because of that, BECCS can either maximise power generation or CO₂ capture. It cannot do both. Given that it was previously reported by the Financial Times that the regulator had appointed a Drax consultant, Black and Veatch, to carry out an assurance audit into the company, I hope that the formal investigation recently announced by Ofgem will be carried out independently, thoroughly and transparently. It should not be a desk-based inquiry, as has been the case before. As we look to these new technologies, it is vital that they really are sustainable and that we are on the right road towards net zero.

We have not touched much on transport. As an active travel champion, I am concerned that tomorrow’s National Audit Office report will again show that we are not meeting the goals to achieve our active travel measures and that we need to do more to decarbonise every different element of our society. The transition to net zero is a multifaceted mission that needs a robust and well-calculated response, with each part fully calculating its energy contribution and all its carbon costs, including transportation. Those need to be properly analysed along with their financial contributions in generating the energy that we fundamentally rely on. The new Exeter University EC simulator, which I visited last week, may well be a step towards independent analysis of different projects as we continue the challenging but vital work of moving towards net zero.

Reaching Net Zero: Local Government Role

Selaine Saxby Excerpts

Monday 5th June 2023 Commons Chamber

[Selaine Saxby (North Devon) (Con)]

Councils are indeed well placed to help communities get to net zero, and they need to lead from the front with political leadership and genuine, tangible change. While we recognise that councils face real funding challenges at this time, the pandemic has taught us the importance of collaboration between local and national Government. Far too often, climate plans in response to councils’ declared climate emergencies are just that: a plan. I wrote about councils’ declarations of climate emergencies back in August 2021, and not much has changed in far too many councils’ responses since that time. The “Cambridge Dictionary” defines an emergency as

“something dangerous or serious, such as an accident, that happens suddenly or unexpectedly and needs fast action in order to avoid harmful results”.

By their very names, emergencies and crises invoke something of a helplessness in many, as they seem to be someone else’s problem. If we are to address climate change and achieve net zero, there is a need for everyone to feel that they can take action now, not wait for another long-winded plan.

Furthermore, our flag-waving Lib Dems who have run North Devon district council since May 2019 took a full three years even to produce a plan, and they continue to fail to reduce their own carbon emissions and energy consumption or to incentivise electric cars. To date, they have switched just one vehicle to electric, as was announced with much fanfare in their press release earlier this year, which stated:

“On Tuesday 18 April, North Devon Council took delivery of their first fully electric asset, making a significant step forward in their commitment to sustainability and reducing their carbon footprint.

The new electric asset, Eco City Sweeper 2, will be used to keep the streets of North Devon clean and tidy. It is equipped with the latest electric technology and has a working time of six hours on a single charge.”

Although I am delighted that it has arrived, I am not sure that it is going to make the largest reduction in emissions, given that it is replacing a man who did not create many. I appreciate that our hard-working council officers have been very busy with the pandemic and the projects that have fallen out since, and the staff at the council do a fantastic job, but one would hope that the lead councillor responsible for the environment could have found a way to at least install some solar panels on the new council building, or secure an electric bin lorry or two.

Time is of the essence, and we need not reinvent the wheel; we should look where solutions currently exist and work to implement them. UK100, which was referenced by the hon. Member for Bath (Wera Hobhouse)—I thank her for securing today’s excellent debate—brings together local authorities across the country to devise and, crucially, implement plans for the transition to clean energy that are ambitious and cost-effective and that garner support. I have spoken at UK100’s events and seen how effective its solutions would be. I am a big supporter and urge others to join. Its knowledge hub offers excellent ideas for how local leaders can work to hit net zero.

Declaring a climate emergency suggests that it is someone else’s problem. We need climate action, and we must work together in driving that action, rather than producing endless plans. If councils need funding to deliver those plans, they need to speak with their MPs and Government in order to detail how action will be taken. I live in a village that is full of tourists at this time of year, yet it is still many, many miles to the nearest public electric charging point. The pace of change in Devon may be marginally quicker at a county council level, but we do not have many buses, so surely we are overdue at least a single electric or hydrogen-powered one.

[Wera Hobhouse]

I hope that the hon. Lady will soon talk to the leader of her district council and get some answers, but the problem of electric charging is, of course, a central Government problem. It is a centralised grid, and grid connections are so incredibly difficult to achieve—that is the same for a local authority that wants to put in more electric charging points as it is for community energy projects. We share the concerns about those projects. Does she not agree that the problem is with the grid?

[Selaine Saxby]

I thank the hon. Lady for her intervention. While I fully acknowledge some of the concerns about the grid, living where I do, I would suggest that that is not the reason why those charging points are not going in. I have parish councils that do not believe in electric vehicles and, to be completely frank, that is holding back some of the roll-out. There is a lot more we could be doing to drive through some of this change.

Having previously led debates in this place on decarbonising rural transport and levelling up rural Britain, I fully recognise how much harder some of these challenges are in a rural environment, but some councils are leading from the front, as UK100 is testament to. I just wish that any of the rural councils in Devon were on that list. Indeed, I support UK100’s “Powers in Place” report. I very much hope that the Minister will have had a chance to look at some of its recommendations, particularly on more strategic, needs-based long-term funding in a rural environment.

The Conservative Government are a world leader in fighting climate change, and we have introduced the legislative tools to enable and encourage individual leaders and businesses to take action. We as individuals, business leaders and councillors need to get on and do what we can to make change, rather than producing endless plans and PowerPoint presentations that do not in themselves solve the problem. My door is open to any of my councils who want my assistance in driving North Devon towards net zero.