Memorandum submitted by Global Marine
Systems
1. EXECUTIVE
SUMMARY
1.1 Global Marine Systems (GMS), a market
leader in the laying of subsea cable and related engineering services
for over 150 years, is delighted to respond to the Energy
and Climate Change Select Committee's Inquiry into "Low Carbon
Technologies in a Green Economy".
1.2 Our area of expertise within an offshore
windfarm project is in the installation, burial and eventual maintenance
of both the inter-field cables (the power cables which connect
the grid of turbines to each other) as well as the export cables,
which connect the entire array of turbines back to land and the
power grid itself.
1.3 We firmly believe that the development
of offshore wind power is core to the UK's future wellbeing and
economic and environmental security.
1.4 The coastal geography of the UK and
the ambitious targets set out by the Government present a real
opportunity for the UK to take a lead in the development of offshore
wind.
1.5 In order to ensure the growth and adoption
of such technologies are not diminished or damaged by the current
economic climate, continued clear support is needed from the Government.
A holistic approach to the Transmission Regime is essential to
ensure greater flexibility in the adoption of future technologies.
1.6 In addition, a stable and predictable
regulatory regime is necessary in order to facilitate investments
in offshore wind farms.
2. ABOUT GMS
2.1 Global Marine Systems, a British company,
has been involved in laying subsea cable and related engineering
services for over 150 years. Global Marine Systems is the
privately owned merger of what once were the marine divisions
of British telecommunications companies British Telecom and Cable
& Wireless.
2.2 Global Marine Systems has two core business
units, Telecommunications and Energy. The Energy unit has a focus
on the installation and maintenance of subsea power cables and
related engineering services. As part of this unit we have, over
the past eight years performed a significant amount of work in
the offshore windfarm market. Global Marine has been a key service
provider on such projects in the UK as the Kentish Flats and Barrow
offshore wind farms. We have also successfully completed projects
throughout Europe such as Horns Rev, and we are currently completing
the world's largest offshore wind farm, Horns Rev 2.
2.3 Specifically, our area of expertise
within an offshore windfarm project is in the installation, burial
and eventual maintenance of both the inter-field cables (the power
cables which connect the grid of turbines to each other) as well
as the export cables, which connect the entire array of turbines
back to land and the power grid itself.
2.4 As a result of our unique record in
delivering these projects, we believe that we are a leader amongst
a very small group of companies in the industry who have meaningful
experience successfully executing work such as this. We are one
of a small group of British companies with demonstrated expertise
in this specific area and a viable business currently operating
in this strategically critical market.
2.5 Given our expertise in the offshore
wind arena, we would like to make the following comments focusing
on offshore wind technologies.
3. OFFSHORE WIND
TECHNOLOGY
What opportunities exist for the creation of a
green new deal whilst pursuing a low carbon economy? Which technologies
have the biggest potential? Has the Government done enough in
its stimulus package?
How important is it to the UK economy that it
becomes a leading developer and exporter of low carbon technologies?
What Government policy needs to be in place to do this?
3.1 We welcome and fully support the Government's
commitment to 20% of electricity supply to come from renewable
sources by 2020, and an 80% reduction in carbon emissions by 2050.
Investment in non-polluting electricity generating sources is
not only critical to meeting the UK's carbon reduction targets
but also has the potential to form the basis of a major future
growth area for UK plc.
3.2 In order to reach the Government's targets,
we firmly believe that the development of offshore wind power
is core to the future wellbeing of both the environment and the
UK's economy. As the Department of Energy and Climate Change (DECC)
recently published study of the UK's shores demonstrates, there
is scope for between 5,000 and 7,000 more offshore wind
turbines around the UK coast. DECC estimates that this would be
enough to power the equivalent of almost all the homes in the
UK and would make a significant contribution to renewable energy
targets.
3.3 As recently set out in the Government
Low Carbon Industrial Strategy, the transformation to a low carbon
society presents a valuable opportunity not only to convert industry
to a low carbon philosophy, but also to secure the skills sector
that will support it.
3.4 The creation of highly skilled, highly
sought jobs is critical to the UK's low carbon industry. We have
developed world-leading training facilities for our industry within
the UK and believe that educational, government, and business
interests should be aligned in a common and realistic effort to
meet skills needs the low carbon economy of the future. We would
welcome regulatory opportunities that that emphasise the importance
of developing this future skills sector.
4. DEVELOPING
AND DEPLOYING
OFFSHORE WIND
How realistic are the Committee on Climate Change's
projections for the use of different types of new technologies?
What is needed to achieve the development and deployment of them?
Are we seeing impacts of a downturn on demand
and investment in low carbon technologies? If so, how can this
be addressed given the need to meet long term targets? What obstacles
to investment are there?
4.1 In order to aid the development and
deployment of offshore wind technologies, and given the current
economic climate and with liquidity and investor confidence low,
continued clear support is needed from the Government. In addition,
a stable and predictable regulatory regime is necessary in order
to facilitate investments in offshore wind farms.
4.2 Despite the growing market for offshore
wind, we are seeing some major entrants to the installation market
make the decision to drop out. This is a worrying trend, and needs
to be addressed in order to ensure the UK provides the skills
needed for such developments in the future.
4.3 The challenging economic climate notwithstanding,
industry is keen to press ahead with the development of low carbon
offshore generating capacity. This does however require clear
signals from the UK government to support the investment environment.
We welcome the Government announcement in the Budget of £525 million
support to offshore wind through a reform of the Renewables Obligation.
Given the sheer size of the industry needed to deliver against
these goals, and the need for industry to begin the process of
making the long-term investments to build out the infrastructure
necessary to deliver against these goals, we support these types
of commitments from Government to provide a foundation for the
necessary investment.
4.4 Separately, in order to adopt and allow
for a range of multiple technologies, a holistic approach to the
Transmission Regime is of high importance. The framework should
embrace a flexible approach to ensure that the network is effectively
positioned for future growth.
4.5 As highlighted in a recent report published
by the Electricity Networks Strategy Group (ENSG), £4.7 billion
of investment is needed in the UK's electricity transmission grid
to ensure that the network is prepared for new renewable infrastructure
built by 2020. In addition the report found that up to 1,000 km
(620 miles) of new cabling will be required to connect remote
wind farms and the new generation of nuclear power stations to
major cities, and that such work needs to start now to upgrade
the existing grid and include proposals for high-voltage sub-sea
cable links between Scotland and England.
4.6 In order to facilitate the introduction
of greater offshore wind power, we firmly believe that a new regime
should incorporate sufficient strengthening of the onshore grid.
4.7 We support any regulatory policy which
allows for long-term flexibility in planning and development as
well as short term structure to move projects forward with confidence.
It is our opinion that ultimately the ability to make best use
of the offshore resources will push us towards a future of joint
planning and development with the other countries in the region
who share this same resource. Any policy which allows regulatory
and technical flexibility in consideration of these regional approaches
to offshore wind and power interconnectors will help ensure the
viability of these investments.
5. INTERNATIONAL
CO -OPERATION
What are the most important drivers, nationally
and internationally, for a low carbon economy in the UK? To what
extent do the outcomes of the international negotiations at Copenhagen
matter?
5.1 In recent years, as development has
increased throughout Europe, it has become progressively obvious
that international coordination will be necessary for the UK and
Europe to take best advantage of their natural renewable resources.
As the Committee will be aware, agreement across Governments at
an EU level are beginning to cohere around a concept commonly
referred to as the Supergrid.
5.2 The Supergrid is envisioned as an interconnected
series of offshore windfarms, which allow all participating countries
to have access to renewable power regardless if that power is
being generated within their sovereign territory. Although the
concept is primarily based on wind energy, other types of alternative
energy from countries outside of the UK, such hydroelectric and
solar can also be added to this type of grid, maximizing the natural
resources regardless of international boundaries. The NorNed and
the BritNed interconnector agreements are considered early examples
of how this international model might work.
5.3 Although ideas such as the Supergrid
are a vision for the future, the recognition of interdependency
between nations is becoming a foundation for network planning
across Europe, ensuring that government policy allows for the
most effective use of alternative energy resources. It is widely
accepted amongst analysts and industry experts that over the coming
years offshore wind, ultimately interconnected between countries,
is where the majority of growth opportunity is to be found.
5.4 The British Wind Energy Association
(BWEA) has projected that almost 3,000 Megawatts of offshore
wind power will be installed annually by 2112 and beyond.
This level of growth far exceeds the expectations of the market
since 2000 and demonstrates the success to date of offshore
wind farms recently installed.
5.5 GMS supports in principle the concept
of greater interconnection with fellow EU member states through
the establishment of a "supergrid". This will ensure
maximum efficiency of offshore wind plant and minimize overcapacity.
6. CONCLUSION
6.1 We firmly believe that the development
of offshore wind power is core to the UK's future wellbeing and
economic and environmental security.
6.2 We look forward to continuing our work
in the renewable sector across the UK and helping the Government
reach its renewable deployment and carbon emissions reductions
targets.
6.3 We hope that this outline of our experience
in the adoption of offshore wind farms is helpful to your Inquiry.
We would be very happy to meet with you to share our experiences
of supporting and engaging in the UK's energy market.
May 2009
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