Isra-Mart srl : Shared grid promises to slash offshore wind costs

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National Grid calls on Ofgem to streamline offshore grid connection system in move that could save £8bn for consumers
National Grid and the renewable energy industry are calling on Ofgem to redesign the offshore grid regime so developers of Round 3 and Scottish Territorial offshore wind farms can share cables and substations.

Advocates of the move claim that the reforms could save energy customers up to £8bn over the coming years as the new generation of large-scale offshore wind farms are deployed.

BusinessGreen.com has learned that National Grid has been lobbying a wide range of stakeholders, including offshore developers, Ofgem, DECC, the Crown Estate and Renewable UK, to promote plans for an integrated offshore grid system.

The company says the proposals would allow developers of future offshore wind farm projects to share established large-scale transmission infrastructure, rather than build additional single systems for individual projects.

Research carried out by National Grid and seen by BusinessGreen.com suggests an integrated approach could slash the capital cost of grid connections by 25 per cent, halving the number of onshore cable landing sites from 61 to 32 and reducing the number of offshore substations from 73 to 45 in the process.

The report also claims that the approach would cut the number of onshore AC cables by 77 per cent, and halve the length of offshore AC cables required from 1,206km to 603km.

"Do it once, do it big, don't come back!" National Grid argues in the presentation, adding that the huge reductions in infrastructure would also slash the carbon footprint of construction and simplify planning applications for developers.

However, concerns remain over whether the integrated grid approach would work on a practical level. While the industry has broadly welcomed the idea of a shared network, fears have been raised that it would clash with the system currently proposed by Ofgem and delay the deployment of offshore wind farms.

"It is unlikely that two separate wind farms would commit simultaneously to share one grid connection," said RenewableUK in a recent letter to Ofgem. "The connection would be needed in time for the first wind farm, requiring someone to take on the risk of the other party not going ahead."

RenewableUK has therefore urged Ofgem to allow National Grid, as the National Electricity Transmission System Operator (NETSO), to identify links that can be built before they are financially secured. Under the current regime Ofgem does not allow an offshore transmission link to be built until a third party has financially secured it, in a bid to prevent the creation of unused or "stranded " assets.

The proposals will feed into an Ofgem consultation, due to finish today, on who should own and operate the transmission links for offshore wind farms in the so-called enduring regime – a system which will apply to the majority of offshore wind farms that have not yet been built.
An Ofgem spokesman said the current system would not stall construction and confirmed that a decision will be made before the end of the year.

"What the Offshore Transmission Operator system does already is give generators what they need for the best value and a most timely connection," he said. "It is the same process that has been successful onshore for the past 20 years."

In related news, research published on Monday has predicted that the rising costs of building offshore wind farms might have peaked this year, and could drop by about 20 per cent by 2025.

The UK Energy Research Centre report, entitled Great Expectations, suggests that current costs of £150/MWh could fall to just over £115/MWh in the next 15 years.

However, it warns that such reductions will only prove possible if government and industry work together to ensure costs are reduced in the long term. In particular, it urges the government to step up investment in the UK wind industry supply chain, particularly in the form of port upgrades.

"There is little point in making turbines and other large components in the UK if we lack the wherewithal to install from UK bases," the report warned. " Failing to do this risks both a higher cost trajectory for offshore wind and that UK developments are built out of ports in other parts of Europe."