Costs have increased significantly in recent years for UK offshore wind developers, according to a new report produced for RenewableUK, renewable energy trade association.
Managing Regulatory and Consenting Costs for Offshore Wind looks at the different consenting costs for seven Round 1 and seven Round 2 projects as well as several later projects, and finds that between Round 1 and Round 2 of offshore wind development, average consenting costs went up 15% for each megawatt consented.
The average cost of consenting each MW of Round 1 schemes was £15,365.29 and at Round 2 was £17,668.71. Concern is also raised about the fact that consenting costs per turbine have also increased, with this particularly notable in the post Round 2 schemes. Given that development costs have been quantified at £60 million for a 500MW wind farm, such an additional expense has an impact on overall project profiles.
A second study released today Consenting Preparedness of Offshore Wind Stakeholders: Survey and Recommendations – also shows that the time taken to make planning decisions has substantially increased. This latter study finds that the average planning timescale (from pre-application to consent) increased from 36 months in Round 1 to 73 months in Round 2.
Both studies highlight the problems of the complexity of making an application, with the Regulatory and Consenting Costs Study showing that the Environmental Statement submitted for a Round 1 wind farm was 300 pages long, while for a recently submitted Round 3 project the statement totalled 12,500 pages.
In addition both studies flag concerns around the ability of the consenting bodies to respond as quickly as needed given financial pressures. A number of detailed recommendations are made in the two studies to ensure that the consenting regime for offshore wind can function effectively.
Commenting on the studies, Nick Medic, Director of Offshore Renewables, said: “Offshore wind is a great British success story, already accounting for thousands of UK jobs. However, for it to fully develop as a sector, we understand that costs need to come down. The industry is working hard on this, but we need Government to do their part and make certain that the planning system functions in an efficient and timely manner, ensuring that the important needs of guaranteeing environmental protection are coupled with an efficient process which keeps costs down for the consumer.
It is reasonable to expect that with the accumulation of experience, having built 1,183 turbines in UK waters, we should start seeing a consenting process with less red tape, resulting in savings of time and money. The trends highlighted in these reports need to be reversed, and to that effect they offer a number of timely recommendations. An adequately funded, efficient planning system is a winning proposition for the industry and Government. “.