Floating project plans in Scotland, Black Sea and Korea12 May 2023
Crown Estate Scotland has announced the results of its INTOG offshore wind site leasing round, which it describes as “the world’s first leasing round designed to enable offshore wind energy to directly supply offshore oil and gas platforms.”
INTOG (Innovation and Targeted Oil & Gas) leasing – focused on floating wind technologies – aims to attract investment in innovative offshore wind projects in Scottish waters, as well as help decarbonise North Sea operations.
The INTOG process allowed developers to apply for seabed rights to develop offshore wind projects that either reduce emissions from the North Sea oil and gas sector – by supplying renewable electricity directly to oil and gas infrastructure (TOG) – or consist of small-scale (IN) innovative projects of 100 MW or less. This approach to offshore wind leasing is said by Crown Estate Scotland to be different from “any other previously carried out in the UK or in the world.”
INTOG has been designed in response to demand from government and industry to help achieve the targets of the North Sea Transition Sector Deal through decarbonising North Sea oil and gas operations, and also aims to further stimulate innovation in Scotland’s offshore wind sector, create additional supply chain opportunities, and assist companies to enter the renewable energy market.
The successful applicants have now been offered initial agreements – called Exclusivity Agreements – that, if they accept the offers and proceed to sign them, enable them to start offshore wind development work while the Marine Scotland’s planning process for the INTOG Sectoral Marine Plan (INTOG SMP) is completed.
If a successful proposed project is in the final INTOG SMP, an option agreement will be offered. Projects will then go through planning, consenting, and financing stages.
Crown Estate Scotland reports that 13 projects out of a total of 19 applications – five for IN and eight for TOG – have been offered Exclusivity Agreements.
The 13 applicants that have been offered Exclusivity Agreements are listed below and the project locations shown in the map above.
Once the Sectoral Marine Plan has been finalised and option agreements signed (expected 2024), a total of around £262 m in applicant fees will be secured. Once projects are operating, further revenues will be secured. All net revenues from Crown Estate Scotland go to the Scottish government for public spending.
Crown Estate Scotland will offer a seabed lease of 50 years for TOG projects and 25 years for IN projects.
INTOG contract awards were made on a largely open-auction basis and were judged on a mixture of price and quality, says Crown Estate Scotland.
Option agreements are expected to be offered in 2024, with the requirement that, to secure an option agreement, developers must provide a Supply Chain Development Statement (SCDS).
Striking a blow for reduced LCOE
January 2023 saw the start of an EU funded project BLOW (Black Sea Floating Offshore Wind) aimed at harnessing the considerable floating offshore wind energy potential of the Black Sea.
The project, with a budget of over €21 million and duration of five years aims to implement a 5 MW demonstrator in the Black Sea, “paving the way for industrial mass production and the deployment of floating offshore wind farms” and making use of synergies with the oil & gas sectors.
The goal is to achieve an LCOE of 87€/MWh by 2028 and 50€/MWh beyond 2030.
Koreans choose Vestas
Meanwhile, Vestas has been selected as preferred supplier for 495 MW floating offshore wind project in South Korea.
Vestas says it has signed a preferred supplier agreement and “if the project materialises”, it will supply and install 33 turbines of the V236-15.0 MW type for the project.