Exclusive:GB Energy poised to continue investment in Scotland's stuttering floating wind projects
GB Energy handed over funding to a floating wind project in its first equity investment,
The CEO of GB Energy has confirmed that more public money is poised to be invested into Scotland’s floating offshore wind projects despite fears over the cost of the technology.
The pledge comes after The Scotsman’s sister paper, Scotland on Sunday, revealed that industry leaders have held crisis talks to prioritise a handful of projects amid an expectation that some licences for proposed floating wind developments are likely to be handed back to Crown Estate Scotland in the coming months.
It is understood that between four and six projects - Caledonia, Buchan, Pentland, Bellrock, Salamander and Muir Mhor could be rallied around by the industry after fears emerged over a lack of domestic supply chain and costs failing to reduce at the pace hoped for.
The Pentland project has already received £50 million of public funding from GB Energy, the energy company set up by the Labour UK government and headquartered in Aberdeen.
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Speaking to The Scotsman in Aberdeen, CEO of GB Energy, Dan McGrail stressed that the public body continuing to invest in floating wind projects will help reduce the costs of the technology.
He said: “Fundamentally, it’s why we believe there’s a role for public capital in this complex journey to cost reduction.
“People say the costs are too expensive, but I think in the renewables industry, we’re always incredibly cost-conscious in trying to continually reduce costs.
“If costs were half what they are now, we’d still be trying to work out how to reduce the costs.
“If you adjust for inflation, the cost of floating wind today is about the same as the cost of fixed bottom (traditional offshore wind) was in 2010 when we were starting to scale that up.”
Despite the concerns raised by some over the costs not reducing at the pace expected to make developments more viable, Mr McGrail argued that “where we are shouldn’t be a surprise to anybody”.
He added: “The biggest pathway to reducing costs is through deployment.
“You do industrialisation by working step-wise to building supply chains that can be sustained and continuously improved. Second, you create confidence in the project finance market by delivering projects that work. Third, you identify the in-life technical problems that get insurers concerned and you solve them. You can do that in a step-wise approach.”
He said that GB Energy’s strategy is to “support projects like our investment in Pentland that start to get that capacity in the water” and then “make targeted interventions in the supply chain that enable innovation that solves cost reduction challenges to move through the technology-readiness levels faster”.
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Mr McGrail added: “Those projects, then, can become the test cases and the opportunities for the supply chains to flourish. You need a twin strategy that is about deployment and is about supply chains.
“Having supply chains with no projects is useless and having projects without supply chains and being able to innovate and be funded to innovate won’t capture the full benefit for Scotland and the wider United Kingdom.”
Asked if more floating wind projects are expected to be backed with funding from GB Energy, Mr McGrail said: “That’s very much our strategy.”
He added: “We’re now working through the plan of understanding which of the projects will add the most benefit to that wider system. We’re not just going to choose the next one off the list. It’s got to be really targeted.
“We’re also leaving a big enough gap so that we can, as we’re learning through the Pentland experience, that we can start to recycle some of that intel.”
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