by Michael Dodd, Power Grids Segment Leader UK&I, DNV
It has been much heralded that offshore wind will play a very significant role in the decarbonization of the UK electricity sector. Indeed, Boris Johnson lauded the North Sea as the Saudi Arabia of offshore wind alongside the Government’s updated policy target to have 40GW installed by 2030. However, one crucial part of the puzzle that has had less attention until recently and could prove a stumbling block if not addressed quickly, is how we make sure all that offshore wind is efficiently connected to the markets and demand that need it. Put simply, are we doing enough to make sure sufficient offshore transmission capacity is planned, built and operated to serve the offshore wind ambition?
It is now generally agreed that the key to delivering a much larger and more efficient offshore transmission system is to shift from the UK’s Offshore Transmission Owner (OFTO) and interconnection models of point-to-point transmission connections to a more centrally planned and integrated system that serves clusters of offshore wind projects and, possibly, interconnects different countries and markets. Further, these integrated systems could, in time, incorporate new technologies, such as green hydrogen production, as well as electrifying the operations of offshore oil and gas production with low or zero carbon electricity through the decarbonization transition period.
The UK was an early pioneer in offshore wind development and connection, providing policies that encouraged the deployment of offshore wind at scale. Within the suite of policies, the OFTO regime provided an effective way for offshore transmission connections to be delivered, financed and operated at a relatively efficient cost to consumers. However, as European offshore wind sectors have grown, we have seen the UK start to fall behind in the way we plan and deploy offshore transmission infrastructure.
Greater co-ordination and planning between European countries have seen initiatives to develop more integrated networks accelerating. For example, the European Union’s PROMOTioN project (that DNV was proud to Chair) highlighted areas where greater co-operation, standardization and technological advances in certain areas could facilitate a North Sea integrated transmission system, whilst delivering considerable economic benefits to industry and consumers. Many of that project’s participant countries have already incorporated the key recommendations into offshore wind and transmission regimes to start driving greater co-ordination. However, the UK is only now accelerating many of the regulatory and policy changes that are needed to deploy the transmission infrastructure that is required to facilitate the 40GW of offshore wind by 2030. Some believe that changes have been left a little too late for comfort.
Over the last 12 months or so, a whole raft of initiatives and policy reviews have started in this area. Primarily driven by the Government’s Offshore Transmission Planning Review (ONTPR), we have seen announcements, working groups and consultations covering (but not limited to!): future Interconnector policy; co-ordinated offshore connections; pathfinder proposals; possible enduring regimes; Holistic Network Design (HND); draft National Policy Statements to support energy transformation; future incentives and remuneration; etc; etc; etc. These are all valid and important areas of work, which do need addressing but this writer’s concern is that we are not far from the 2030 deadline and the likelihood of all these workstreams delivering results which can be turned into actions and subsequently assets in the water is becoming a tall order. Even greater focus should be placed on the quick win/no-regret policy and regulatory decisions that will kick-start the development of more centrally planned, integrated offshore grids.
An area of particular concern and one which requires far greater attention than currently given is the lack of focus on technical standardization and the interoperability of transmission systems and components. To put simply, if a set of policies and regulations can be developed that facilitate an integrated offshore grid, will we have the technical compatibility required to actually build and operate it? This area of co-ordination is, perhaps, one of the most difficult to achieve. Original Equipment Manufacturers (OEM) and developers are rightly protective of their IP, relationships and innovation. However, if we are to achieve the goal of a truly integrated offshore grid, the level of co-ordination between different manufacturers’ kit, control systems and operations must be much greater. It may be possible to legislate to improve interoperability, but it is far more powerful if industry and the OEMs themselves can start to drive greater co-ordination. The possible size of the prize at the end is irrefutably greater if this can happen more quickly than a legislated approach would deliver.
A North Sea integrated offshore transmission system is a key enabler to meeting the Government’s ambitious offshore wind and broader decarbonization targets. The UK is now starting to accelerate the dialogue required to put in place a policy framework that could facilitate it, but this dialogue needs to very quickly turn into concrete policy decisions, regulatory frameworks and more open technical specifications if we are to deliver the required offshore infrastructure in time.
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Michael is a Director and DNV’s Power Grids Segment Leader for UK & Ireland. He is a regulatory and strategy professional with 20 years’ experience in different roles within multiple regulated utility industries. Michael’s primary focus is on the commercial and strategic impacts of regulation, policy and market structures within the UK and European energy markets. As Power Grids Segment Leader, UK & Ireland, he is responsible for the strategic direction and growth of DNV’s activities across the sector. Michael brings extensive experience in advising on the commercial impacts of regulatory and market changes from the operational to strategic levels.