Utility Week

20 | NOVEMBER 2021 | UTILITY WEEK Policy & Regulation Analysis Offshore wind development is about to get easier BEIS proposes a centralised strategic approach to offshore wind development in a bid to boost the sector. Tom Grimwood reports. T he government has proposed taking a more centralised strategic approach to the planning and development of off- shore wind infrastructure, stating that the current developer-led model is unlikely to deliver the necessary degree of coordination. In a new consultation issued as part of its offshore transmission network review, the Department for Business, Energy & Indus- trial Strategy (BEIS) says this could include combining offshore wind leasing rounds with Contracts for Difference (CfD) auctions. The document says wind farm locations are currently determined through a combina- tion of developer choice and leasing rounds, which tend to offer rights for large areas of seabed, o en spread around the coast. This limits the potential benefits of coordination because projects are not close enough to share infrastructure or are being built at dif- ferent times. BEIS says there may need to be a more strategic approach to planning that takes into account network considerations such as reinforcement costs and proximity to demand centres as well as interactions with other marine development and activities and environmental issues. It says creating an upfront strategic plan setting out when and where offshore wind is expected to be deployed would allow for greater coordination of network infrastruc- ture, including integration with cross-border interconnectors, improving efficiency and minimising the impact on the environment. "It seems very unlikely that a developer- led approach would be able to deliver any of the more complex coordinated offshore network configurations," the consultation explains. Such a plan could provide a forward schedule for leasing rounds and CfD auc- tions and identify likely cable corridors, connection points to the onshore network and required reinforcements. This would ensure onshore reinforcements were com- pleted at an appropriate time and that capac- ity constraints did not present a barrier to deployment. "Although it would be possible to deliver some of the benefits of coordination in the absence of a strategic plan, we think these would be small by comparison," BEIS says. "They would likely be opportunistic changes where wind farms near each other happen to be following a similar timeframe (and so could potentially plan to share trans- mission infrastructure), or where a future wind farm in the area can reasonably be expected. "It is unrealistic to expect changes to the latter stages of the wind farm develop- ment process to be able to deliver signifi- cant benefits if the early stage does not plan coordination." However, the consultation also admitted there would be some trade-offs to upfront strategic planning: "If seabed leasing maximises opportunities for coordination, this could result in a smaller number of potential projects. This would reduce the diversity of projects competing in any CfD auction, which could reduce the competitive pressure in the auction. "There are also fundamental questions around the role of the CfD in project selec- tion if we are following a more strategic cen- tralised approach. Essentially, if we take a more centralised approach to identification of sites, then there is less scope for develop- ers to choose the sites that they feel are best suited to offshore wind and can help deliver lower costs." BEIS notes that the UK currently has one of the most decentral- ised approaches to offshore wind plan- ning and development when compared with other countries, high- lighting the arrange- ments in places such as Germany and the Netherlands. "Under the Ger- man system, the sea-

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