Offshore Wind Cluster Builder procurement session with Inch Cape

I’d like to begin by welcoming all our attendees to today’s webinar from the Inch Cape offshore wind farm project, which is being hosted by Scottish Enterprise and run in conjunction with Inch Cape offshore wind limited.

Today’s session will be a little bit different to some of the meet in the bar events that you may have attended in the past. In fact, it is obviously completely virtual, and you won’t be physical meeting anyone.

For the vast majority of people who will be on this session, our speakers will not be direct buyers of your goods and services. Now, before you log off and complain to Scottish Enterprise for wasting your time, or mis-selling this webinar to you – that’s what I’m trying to say here, the Inch Cape project is offering various opportunities for Scottish businesses and suppliers.

What we aim to do with today’s session is give you an update on what’s happening on the project, introduce you to the contracting and procurement approach for the project, and explain how you can keep up to date as it develops, and contracts become available.

As many of you already know, it takes literally tens if not hundreds of companies to actually provide all the goods and services you need to develop, run and operate an offshore wind farm project such as Inch Cape.

So, while you may not be connecting directly with Inch Cape – it could be that you’re contracting with other key contractors down the supply chain.

What we are trying to do with today’s webinar is to give you a better idea of when contracts are going to be relevant to your company where and when they become available.

Our first speaker today will be Adam Ezzamel who’s the project director of Inch Cape offshore limited which I’m going to refer to as ICOL just for ease, and he is going to give us an introduction to the wind farm and fill us in on some of the background to the project.

We will then hear from Gordon Fisher who is the project commercial manager at ICOL, and Nikkie who is the stakeholder manager at ICOL – who will be giving us an overview of the project timelines, their procurement approach and some of the key opportunities for the supply chain.

As mentioned, for many of you, you may not be contracting directly with ICOL. I know they are particularly keen to engage with sprouting companies that can bring innovative new solutions to the project.

Following that, we will hear from Hannah Colling at Xodus group who is going to talk about the offshore cluster builder and how it can help you better understand and access opportunities at wind farms such as ICOL.

If you are keen to access opportunities such as these projects and keep up to date then please have a look at the offshore wind Scotland website. This will explain their purpose and essentially how they can be of benefit to your company.

It is entirely free and a fantastic way of staying up to date on the latest developers and offshore win and all those kind of various support services you can tap into if you’re looking to break into the sector.

After Hannah’s presentation we will conclude with a Q&A session so if you do have any questions please type in the box and we will try to answer as many as we can.

My name is Adam Ezzamel and I am the project direction for the ICOL wind farm project. I have worked in the offshore wind sector for 15 years, delivered a number of project in Thames but more recently off the east coast of Scotland at Aberdeen.

So, Inch Cape is a really exciting development, its ownership structure is joint between Red Rock Power Ltd which is ultimately a Chinese state-owned enterprise, and the state utility of Ireland which is ESP the electricity supply board.

Both of our stakeholders have a 50/50 stake in the joint venture which is developing the project.

This offshore wind farm is one of Scotland’s largest infrastructure projects, it has a capacity in excess of 1 GigaWatt, and with just 72 turbines will be powering 1.1 million Scottish homes.

We will, at a stroke, add 15% to Scotland’s energy generation fleet and is the largest single source of renewable energy.

With COP26 coming up at the end of the year, hosted in Glasgow. Bringing projects like this to fruition is the best chance we have of meeting our climate goals, which is becoming increasingly imperative.

The investment itself is just shy of £2 billion, there’s an awful lot of supply chain opportunities, already in the development phase but as we move forward into construction. The project's going to be there for upwards of 35 years.

The focus of these events can tend to be on the construction phase because that’s why me and my team are in the project at the moment, but we must not forget that the lion’s share of the opportunities, in cash terms, over the lifetime of the project is in the O&M phase.

This is just a reminder to all attendees that it is not all about construction, in terms of the project specifics, the project was awarded a lease in 2011 by the Crown Estate. The project itself is located around 12 Kilometers off the Angus Coast, and actually extends over an area of 150km² — roughly the size of the Isle of Hoy.

Our consent, which was granted by Marine Scotland in 2018, gives us the ability to develop 72 turbines, 4 export cables and 2 offshore substations. There is no limit on the nameplate capacity.

We are currently working with just over 1 GigaWatt, however the turbine sizes are developing at a spectacular rate of knots. We deliberately worked with Marine Scotland not to limit ourselves in that school.

The project comes ashore via export cables at Cockenzie in East Lothian. Really nice example of the energy transition this, because we are building an onshore substation on the site of the former coal-fired Cockenzie power station, which was demolished in 2016.

This connects in the national grid there. So, I think it’s a really nice story, we, as a result of our choice to connect into the grid, needed no new infrastructure to be built by the national grid.

We also have colleagues at another neighbouring project being developed by SSE which is looking to connect to the grid there too. So, there is a real feeling that Cockenzie could become a renewable energy hub. Developing projects on this kind of scale is not easy, it’s challenging – we’re still a relatively new industry. First offshore wind farm in the UK was around 2004/5, we were working turbines that were 80m in diameter. We are now talking about turbines 250m in diameter, producing 14 or 15 MegaWatts in capacity.

Every project brings with it significant novelty because of the rate of change of progress in the sector. So, it means that innovation is a key part of value that we need to really have at the forefront of our minds in order to be successful.

The project is going to secure a CFD contract for difference at the UK government auction which is scheduled for early 2022 – we are very confident in this.

Following that, it will be full steam ahead to build out the project as quickly as possible and typically we will be talking about a time frame for these kinds of projects of 2 to 3 years for construction.

Then, as I said, 35 years or more in operation and maintenance.

We want to be able to try and make sure that we not only support the Scottish economy, but we have support from the sector in order to make this project the best it possibly can be.

In a second I’m going to hand over to Gordon Fisher who is the project commercial manager and he is going to go into more detail shortly, But while the news tends to focus on the large contract awards, tier 1 and tier 2 as we call them, they all need support from local businesses to deliver the best possible outcomes.

What we can do at Inch Cape is to be a facilitator and introduce local suppliers to those bigger tier contractors as and when they are selected by ourselves. So that, there are some things that just aren’t possible to procure here in the UK at the moment. Although, we certainly hope that future investment in Scottish and UK business expansion and inward investment will change that situation.

Now, innovation is absolutely key to us, our industry – and it’s something I am very proud of – offshore is one of the cheapest forms of electricity generation, and we have got there by innovation. But this needs to continue further to reduce the cost of energy to consumers so we welcome any innovations, as I said, we are a relatively new industry but we don’t pretend that we have answers to all the questions.

Scotland has a wealth of experience in the wider energy sector and on previous projects we’ve seen the expertise for example, from the offshore oil and gas industry, who can really help us solve problems.

I’ll leave you with my colleagues and industry partners for now but I really look forward to working with you guys and the wider industry to make Inch Cape offshore wind farm both a reality and a very successful reality.

Good morning everybody, very pleased to see such a good attendance here thank you for joining us.

A bit about me first, I have about 12 years of offshore wind industry experience, I’ve worked on several offshore wind farms. Started with the Quinta Moore Offshore wind farm off the north cost of Wales and several others in between. More recently I worked with Adam from the Aberdeen offshore windfarm.

I would like to start with a quick description of the configuration of the wind farm, here’s a fairly basic schematic on the left, there you see three groups of turbines.

They are grouped into 12 strings, each of which contains 6 turbines with an inter-array cable connecting from one turbine to the next and then the last cable of each string connects the final turbine to an offshore substation located within the wind farm area.

Each of those array cables has a capacity of 66,000 Volts and there are 12 strings connecting into the offshore substation. Here there are transformers which converts the 66,000 Volts into 220,000 Volts. There is also an array of control and protection equipment switch gear and a lot of supporting plants and services on the offshore stations such as emergency refuges, firefighting systems, heating, ventilation, air conditioning systems and back up diesel generators.

The substation itself is a steel structure sitting on top of a jacket structure which is pinned into the seabed with pin piles at the base of the structure. The offshore substation connects into the cables which have a length of 83 kilometres. That’s kind of pushing the boundary of what can be achieved with an AC configuration as opposed high voltage DC configuration.

At the landfall there is a section of the cable route which is drilled using a horizontal directional drill (HDD) to get us underneath a seawall to avoid some problematic ground conditions to link into the onshore substation site, which was the former Cockenzie coal fire power station.

The new substation will be converting the voltage from 220 to 275 kV then there is a short cable route to the existing Scottish Power Cockenzie substation where there is some further switchgear to connect us into the National Grid.

Here is another view of the wind farm configuration going from left to right this time. This is the kind of time scales we are working to at the moment. So we are working from the present date, we will shortly be submitting a supply chain plan to the UK government which is one of the enabling qualification criteria for entering into the contract for difference application.

For the project, contract for difference, I expect most people know, is a subsidy mechanism which gives us certainty over the price of electricity we export to the grid for the first 15 years of our operations.

This is key to our financial case for securing investors to enable us to raise the funds to deliver this project. Should we get a decision on the CFD along with all the other applicants around April next year (2022), from that point forwards we will be enabled to increase the level of financial commitment we can make to the project as a supply chain around about June next year.

We need to discharge quite a few of our onshore consents attached to our remedy planning permission although, I understand that we are being granted a bit of leeway on the date just recently, alongside, other operators, due to the delays due to the COVID pandemic.

2023 will see the start of the substation onshore enabling works so there is quite a large amount of civil works and infrastructure work that needs to be done before we can get into construction of the onshore substation.

Around about the same time, we expect to take a final investment decision on the project.

October 2023 will be the commencement of our offshore works. Starting with seabed boulder removal operations and exploited ordnance surveys and clearance. Around April 2024, commencement of our foundation installation. We are proposing monopiles as the foundations for the turbine structures and they will start being piled into the seabed around about April 2024.

By March 2025 we expect our Array cables to be completed then in July we will begin turbine installation and we expect to have first power a few weeks after the start of turbine installation.

July 2025 is the completion date of the export cable and energisation of the substation to enable generation and operation of the wind farm. Turbine installation and array cable installation will continue through to early 2026 but we may extend that window if higher capacity turbines become available and we may continue later into 2026.

To maximise the benefits of larger turbines we expect full commercial operation sometime within 2026.

So, development updates over the last few years and many months we have been working on the project throughout the development of Inch Cape. We have been assessing multiple advanced system technologies, working together with the supply chain to maximise the opportunities for those advances. Driving cost optimisation and adapting our procurement strategy to enable use to deliver the project as efficiently and cost effectively as we can.

We have been quite successful in that; we have increased capacity by over 50% which improves the efficiency of the project by over 30%. We have reduced the anticipated levelized cost of energy by over 20% so, we have taken big steps so far. We want to continue to do so.

Our mission on the whole is to deliver the UK’s most efficient offshore wind farm by working in partnership with the local and the global supply chain.

When we talk about efficiency here it is not just electrical efficiency, it is minimising the amount of materials and resources and energy that goes into constructing our assets. Minimising the amount of transport that the distances the components have to travel before they are integrated into our wind farm and the amount of maintenance activities we depend on to operate. Maximising the operational lifespan of the wind farm.

How do we intend to go about delivering the vision? Firstly, finding the right balance between quality, innovation and cost, implementing a cost efficiency focus right throughout the supply chain and the oil supply service agreements?

Ensuring primarily a safe and efficient construction methodology, minimising offsetting our carbon footprint wherever we can, creating a lean and flexible organisation from the right relationships with our suppliers. And creating a solution-focused mindset amongst the team and our stakeholders,

Ensuring we build on each other’s strengths rather than exploiting weaknesses or gaps in our capacity and so on.

We want to partner with our suppliers to deliver new innovative solutions and capitalise on opportunities.

So, the key points are procurement strategy and we believe we are only as strong as our supply chain. At the moment, we are adopting multi-contracting across many aspects of the windfarm, and this will enable us to allow minor specialist companies into our supply chain and not just the traditional big players within the industry.

We value the global supply chain and experience that it brings, and we have got a lot of experience of working with those big industry players within the industry.

We will do what we can to support and develop local supply chain and we will collaborate with our suppliers to develop the best, most cost efficient solutions that will drive and support innovations as far as we can.

We will challenge existing cost structure models and we intend to continuously optimise all aspects of our projects right the way through and we will strive to minimise the possible negative environmental impacts created by our projects.

In terms of opportunities, the way that the project is configured commercially, the projects are divided into 4 main categories. So, 4 or 5 perhaps the wind turbine package, electrical transmission systems and cable packages, at some points we tend to regard those 2 things a separate packages, foundations and substructures and operations and maintenance.

For the purpose of approaching the market, we are leading with a primarily multi-contracting approach to encourage a health variety of opportunities for engagement with the option to bundle later within the EBCA arrangements as we progress.

Negotiations with the supply chain now, one exception to that is the substations package where we are leading with more of an EPCI approach.

Now, the project team will develop the relationships with suppliers of all tiers and endeavour to ensure that we maximise your engagement to our mutual benefit.

In terms of opportunities within the wind turbine package, alongside the O&M supplied, turbines will be sourcing Davit cranes navigational aids, marshalling installations and facilities, installation vessels, installation operators, fabrication towers, heavy lift equipment, rigging site services and utilities within the substation and cable packages.

There will be site enabling works, HDD works, substation materials and labour cable installation services, telecoms site support services and utilities within foundations and substructures. Not only is that the fabrication of the foundations themselves, there is also the supply and installation of grouts, marshalling facilities and harbours, scale protection services, the exo-survey, the boulder clearance guard vessels and various other offshore services such as main co-ordination services.

Operation and maintenance again, that will be constructing support facilities, there will be various other ports required to support our operations launch and landing areas for crew, transfer and support vessels will require a large number of maintenance personnel as the project develops and will move through the operational phase.

We need to source spare parts, there will be tooling requirements, spare parts storage requirements, consumables, asset management services and many other services alongside those.

So, what does an ideal supplier look like? Firstly, you need to have a very strong safety performance and work safely at all times. We need specialist suppliers in their own areas. People who can push boundaries to improve efficiency, committed to continuously developing and optimising processes and products, and most of all those we share our values with.

We like to be easily accessible; we would like to have short decision processes we are committed to maximising the outcome of the project to the benefit of the project and all the stakeholders.

We will ask you to bring ideas, products and insights and innovations to deliver competitive solutions.

We respect your IP; we support the realisation of your ideas and together we will strive to drive continuous improvements and be ready to overcome challenges as we face them.

The projects and market can all benefit from the realisation of new ideas and innovation, that isn’t just for our projects. As for the future, renewable projects in the UK and beyond and we should challenge each other on all existing processes, solutions and attitudes.

Looking to improve those as far as we can and work together to make the best of those opportunities.

In doing so, we believe we can deliver low energy, and support the very ambitious targets that we need to deliver in order to decarbonise our economy.

Good morning, I am Nikkie Katie, and I am the stakeholder manager for Inch Cape and I have been with the project for 9 year and I bring 18 years from the renewables and energy sector.

I would like to talk to you about our approach to innovation and what we ask of you, the supply chain.

As mentioned, Inch Cape wants to be the most cost effective and most efficient wind farm with the safest environment for working and the lowest carbon footprint. To be able to deliver on that we need to be innovative and there are many ways in which we can be innovative.

How we can bring innovation into our projects, that could be by using new technology, new products and processes, but it can also be about using well-established products and processes that are new to offshore wind and may be used in a different way which can make a big difference.

Anything that saves time, money and increases yield and decreases down time, and anything that can improve our safety and reduce our carbon footprint, is welcome.

You need to think about what you can offer as a business and, if it is a new technology, that’s fantastic, and a new process that you think can really help us. Also, we would like to hear if you have well-established technologies and processes, something which may be used in oil and gas and other sectors.

It may be something that we have not heard of, and something that could really save us time and effort.

We have various ways in which you can interact with Inch Cape and directly with ourselves. We are always happy to talk to any supply chain companies and we think there is an opportunity for us to work together and we would like to use this session in particular to promote that.

If you have a new innovation, if you have something that you really think can help use in what I have just described we would like to hear from you.

Please feel free to contact us.

If you would like to engage with us on a wider supply chain basis and speak to us about various elements of that we are keen for you to get in touch.

Initially cluster builder is going to be helping us be more efficient with our supply chain, making sure we are speaking to everyone that we can be and we should be.

That will enable our small team to work more effectively. If you do have any questions, as I say, please do get in touch and I will hand over to Hannah.

Thanks, Nikkie, my name is Hannah Collings and I work as a renewable lead at Xodus. I just wanted to give you a quick reminder of what the cluster builder is and what it can do for you.

So, we are Cluster Builder, a 27-month program funded by the European Regional Development fund and is being delivered by Xodus on behalf of Scottish Enterprise.

We are trying to work with Scottish media to advance your position within the offshore wind industry and facilitate and support various clusters across Scotland. If you are not a member please do sign up – we are looking to organise procurement events and support developers in tier 1s like today. We are also looking to find SMEs who are interested in working together, either with a research institution or other businesses providing innovative ideas.

We are trying to provide one-to-one support and answering questions whether it is about offshoring procurement or other aspects of market intelligence, we are looking to provide supply chain insight – so heling you making the supply chain within offshore wind easier to navigate and more transparent.

This is one of the reasons we run the supply chain capability survey which we will talk about more at the end.

As we just heard, the procurement is underway, and the next stage is that which we will be able to engage a wider version of the supply chain. The tier 1 meet the buyer event is one which will come in almost staggered arrangement – what we will be doing in partnership with the clusters is supporting Inch Cape arrange those tier 1 events.

So, once the tier 1 has been publicly announced, we will be ensuring that those updates are publicly sent out within the clusters and that you are given adequate time to prepare for that event.

Not all of those tier 1 events will be announced before the CFD award and those updates will be sent out directly to you if you are a cluster member. So, the aim will be to schedule these across 2022, so they will likely be staggered. We will be doing this by package – for example the first package will be the electrical transmission system, then opportunities which come up within the offshore substation will be announced.

This means we can work with these SMEs who are interested in that before moving on to the next package is announced. Once the timeline is in place please do get in touch with the Cluster Builder and then we will be able to pass on information from Inch Cape at that time.

In the meantime, whilst we don’t have any specific procurement events for Inch Cape, we will be providing additional procurement support.

This is an example of the supply chain insight that we are currently developing; it lists all the projects within Scotland that are currently in operation under construction and those in development so as well as including information about upcoming events, this is to provide you with a view of what is happening within offshore wind projects.

The ones we can see on the screen are from Beatrice and MMG, both who are involved with the joint venture owners of Inch Cape.

These slides will be sent out via the offshore wind clusters, it is to give you a breakdown of; who are the suppliers that are contracted, what is their role, what is their expertise, and provide full transparency of offshoring supply chain.

These will be updated quarterly and shared via other clusters so you will be able to have recent updates of what is going on within the industry.

Finally, is just the last push for the Scottish supply chain capability survey, we are currently doing this so we can understand what the issues and concerns are going on with you and your business. This allows us to identify where we can better help put on events and we will be using the list to curate the tier 1 and developer lists – of who they should be looking to work with in the future preparation for Scotland.

Ian: Does the collective past experience of the industry project development team mean there is a demonstratable benefit in terms of lessons learned from prior projects, and does this give you insights into the Scottish supply chain community?

Nikki: We have a very experienced team and a lot of people have a huge amount of experience in offshore wind specifically. We have worked in the renewable sector and the energy sector more widely for a very long time.

However, the Inch Cape project is quite different from a lot of the others in Scotland in that it has been around for a really long time. As I say, I have been working on it for 9 years, and we have many lessons learned from processing procedures we have adopted in the past.

There is constant communications within the team meetings about how we can do things better, how we can strive to improve it and we work closely with other offshore wind farms as well.

So, the best way to go forward is to really make sure we don’t make the same mistakes other windfarms have made, and trying to be as efficient as possible.

We don’t, however, have all the knowledge and if there are any companies who feel they can bring important lessons to us we would be grateful for that so we do encourage you to get in touch.

Gordon: Whilst we do have a lot of experience from the windfarms we have all worked on as individuals, we still need to learn from other suppliers and contractors.

The early days of offshore winds was very much a case of taking onshore technology and adapting it for offshore purposes. The industry was quite slow to learn from the experiences of oil and gas in particular – picking up on the experience of marine construction operations.

That is something we were slow to take in and there are experience marine construction operators particularly Scottish companies who have been involved in oil and gas operations. We need your expertise to optimise these operations as best we can.

Ian: Are there any particular areas where you see a need to shift the dial or areas of particular importance for you as a developer to see innovation coming into sector or is it generally across the entirety of the packages that comprise the project?

Nikki: I believe it is across all of the packages – where we are often surprised with the modelling is actually reducing cost in capex alone does not shift the overall cost of energy as much as you might think.

Actually, increasing yield has a massive impact on the project so anything in this area is particularly relevant.

Also, we are moving to a view where O&M is as important as it should be and anything where we can improve operations is massively important.

Really at any point in innovating or processing would help us, obviously package manager and individual packages would be interested about the specifics of it but we are happy to discuss this broadly too.

Gordon: One thing we're also very keen to see is the greening of vessel operations. So, companies who are able to offer innovations in the fields of hydrogen filter installation vessels and so on are the kind of innovations we are very keen to bring onboard.

Another area, alongside yield, is lifetime extension. We have very ambitious plans to move from the conventional 25-year expectation and push that as far as we can – beyond 40 years if possible.

Ian: Is there a plan to install a comprehensive condition monitoring system and perhaps as part of the foundation’s scope of work?

Nikki: There will be a CMS system on the turbine in the electrical system in cabling and there is an option on foundations. Also, to potentially simulate the wind farm to support asset management and life extension. There will definitely be on in every turbine drivetrain, which will be included as part of the core scope.

Structural health monitoring is only likely to be installed on 10-15% of support structures and it will only be operated for the first few years to characterise a digital twin model of the structures, which will be used to support life extension.

Ian: Do you have a view as a project as to what sort of levels of content, in terms of UK and Scottish content you could be aiming for?

Gordon: We are going to challenge ourself to deliver above 50% - to what extent we are able to achieve that is largely in the hands of Bayes, the UK government. If we secure a high CFD, there is more money available for us to invest; local UK supply tends to be more expensive.

Nikki: All of our tier 1s are asked to provide information about their local content figures and how they are going to achieve that as well.

Within the contracting structures though, all of the supply chain companies will be held to account and so, when they give a figure, that will be expected and will be contractually enforced.

This means we cannot promise to deliver on certain figures and then not achieve this – and there has to be very serious reason for not achieving this.

The CFD process within the supply chain is monitored across the time so we are held accountable on it.