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Lack of port infrastructure threatens Scotland’s offshore wind boom

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At the Ardersier Port in north-east Scotland, a new owner is transforming the 450-acre derelict construction yard where oil and gas platforms were once built into a wind power player of the future.

Texas-based private equity firm Quantum Energy Partners invested in the site after spotting a potentially lucrative opportunity to meet demand for the transportation of wind turbines that will power Britain’s net zero transition.

Investors such as Quantum are betting on the dearth of suitable port infrastructure across the UK, which is slowing the country’s efforts to pivot the economy towards greener sources of power.

“We quickly came to the conclusion that the real acute shortage for the deployment of offshore wind in Europe was port space,” said Lewis Gillies, chief executive of Haventus, the company Quantum set up to develop the port.

The UK plans to bring more offshore wind online as part of its aim to reach net zero emissions by 2050 — five years later than Scotland’s 2045 target.

But success will depend on Britain increasing its offshore wind power nearly fourfold to 50GW by 2030, according to official projections.

In Scotland, ScotWind, the first round of offshore wind leasing for a decade, through which companies including Shell, Scottish Power and SSE have been awarded contracts, aims to provide about 28GW of offshore wind development alone.

With current port capacity, it would take at least 50 years to achieve the 45GW that is already licensed for Scottish waters, Gillies said.

But experts warn the UK is lagging behind other countries in building the necessary infrastructure partly due to the uncertainty for port owners, who risk financial losses if it cannot attract developers.

More investment is needed in areas where vital components need to be manufactured, assembled and stored before being sent out to sea.

Port owners, who need to make long term decisions and secure funding, said a lack of clarity on the government’s objectives beyond 2030 risks deterring investors — projects can take more than a decade from conception to completion.

Lewis Gillies
Lewis Gillies: ‘We quickly came to the conclusion that the real acute shortage for the deployment of offshore wind in Europe was port space’ © Jeremy Sutton-Hibbert/FT

In April, Quantum announced it would make a £300mn equity investment in the industrial site.

But, according to analysts, the UK is unlikely to close this “investment gap” in time unless port companies gain more certainty on their expected future revenues.

There are “ambitious targets for offshore wind deployment, but we do not have specific policy guidance beyond 2030”, said Ralph Torr, head of floating offshore wind at ORE Catapult, a government-backed research centre. “Time is of the essence,” he added.

Risks to the sector were highlighted last month when offshore wind developers did not bid for any government subsidy contracts in the last auction round for renewable projects. They said the price was too low to offset rising costs.

The port infrastructure challenge is particularly acute for the nascent floating offshore wind industry, which requires larger turbines and larger infrastructure than those fixed to the seabed.

There is “definitely money in the ports industry to invest”, said Richard Ballantyne, chief executive of the British Ports Association. “But we need assurances that these facilities are going to be used. You want 15 years of use out of a facility, at least.”

Tim Pick, the government’s then Offshore Wind Champion, in April pointed to a “shorter-term more commercially focused risk appetite” among the UK’s privatised ports, compared with publicly owned rivals in other European countries, as a barrier to investment.

A service ship approaching floating wind turbines off the coast of Angus
A service ship approaching floating wind turbines off the coast of Angus © Jeremy Sutton-Hibbert/FT

He said there was “clear appetite” among port companies to support offshore wind, but there was also “what looks like a market failure”, with port companies struggling to raise money for relevant infrastructure amid revenue uncertainty.

Renewable UK, the trade group estimates that about £4bn is needed to upgrade 11 key ports to be ready for floating offshore wind farms by 2030, such as Tyne and Bristol.

Associated British Ports, which owns 21 ports around Britain, has set out plans to possibly invest £500mn in Port Talbot to service potential floating offshore wind plants in the Irish Sea. 

But Henrik Pedersen, chief executive of ABP, called for “more market visibility and certainty” on the opportunity, with sites still being evaluated by the government for development. He warned the UK risks “losing out to other nations who are now moving with real urgency”.

Completion of the Port of Aberdeen’s south harbour, which officially opened last month after a £420mn investment, took 11 years from the investment decision being made, said chief executive Bob Sanguinetti.

The new harbour in Aberdeen
The new harbour in Aberdeen, which will accommodate ships in new green industries © Charlie Bibby/FT

The port’s capacity has been expanded by a fifth and can now serve “much deeper and much bigger” ships, including some of the largest. But the “big show” will be offshore wind with 2,000 to 3,000 wind turbines set to be built along the Scottish coast, Sanguinetti said.

“Do I think that we in the UK and the north east of Scotland have sufficient capacity for all this work? At the moment the answer is no,” he said. “It depends on the government providing clarity on its policy, on its timelines . . .[and] when those targets are set for.”

The Department for Energy Security and Net Zero said the government was investing £160mn to support port infrastructure. The Scottish government said it was “already collaborating with ports across Scotland to ensure the right support and financial incentives are in place”.

At Ardersier, work has started on a new quay wall for ships to berth, and dredging to make the harbour deeper and wider to accommodate vessels carrying equipment needed by the offshore wind developers who will be based there.

“If we can attract manufacturers to build their facilities on this site, it will ultimately create thousands of jobs,” said Gillies.

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