Floating Offshore Wind

Nia Griffith Excerpts

Thursday 16th November 2023 Westminster Hall

[Dame Nia Griffith (Llanelli) (Lab)]

I congratulate the hon. Member for North Devon (Selaine Saxby) on not only securing the debate, but all her work on raising the issue of offshore wind and floating offshore wind.

It was shocking and disappointing that the Government were not nimble and responsive enough with the industry to attract any bids for floating offshore wind in the last round, AR5, thus losing a year in the race to tackle climate change and to get ahead in the worldwide race to develop renewables. The Irish made the necessary adjustments, and they had a successful bid. I am not saying that we should always be in hock to manufacturers, but we need to listen to the people who will develop the renewable forms of energy, and co-operate, getting clear messages out so that they feel that the Government have a clear strategy and want manufacturers to be here, or they will be off somewhere else, as we saw clearly with Ireland on the border.

I will not dwell on that now; I would rather look to the future to see what needs to be done for us as the UK to get the most out of the development of floating offshore wind. We in the UK are well placed to grasp the opportunities and to reap the rewards that the development of floating offshore wind offers. Furthermore, it offers us a real opportunity to reinvigorate areas of the country where industry has declined in recent years, the very areas where we have deep ports and industrial base, and have for a long time been concerned about the decline of traditional industries. They are well suited to be leading the way on floating offshore wind.

In south-west Wales, for example, we have not only the potential in the Celtic sea, but the two ports, Milford Haven and Port Talbot, offering deep waters, plenty of space and a strong industrial base. Between them, we have my constituency of Llanelli, with its strong traditions of engineering firms and metal industries producing a huge range of components, from cables and bearings to complex equipment for the automotive and other sectors.

If the Government get this right, there is much potential for jobs in FLOW—the abbreviation the hon. Member for North Devon used for floating offshore wind—and the supply chain. Indeed, the floating offshore wind taskforce said that FLOW might support 30,000 jobs by the end of the decade. A report by Opergy in 2022 highlighted that with the right strategy, that could be as many as 67,000 by 2040. The report also noted that to get that jobs bonus, the Government will need to be proactive in addressing the skills gaps. To grasp the opportunities, we need a grim determination and a coherent industrial strategy from Government.

Here in the UK, we have this tremendous potential for floating offshore wind, as we are surrounded by sea, with plenty of strong winds. Floating offshore wind has the advantage of being able to be deployed further out, in deeper waters, where there are stronger and more consistent winds, and where it is too deep for fixed turbines. Furthermore, away from these islands, 80% of the world’s potential offshore wind energy is in fact in deeper waters. Therefore, the potential for export of FLOW technology and components is significant.

The fact that we have several demonstration projects operational, such as Kincardine and Hywind, also puts the UK in a good position to be a world leader. The UK can only grasp the full benefits of developing FLOW, however, if we get ahead of the game and become the country that is exporting the turbine technology and the components, rather than letting other countries get ahead, offering greater certainty and incentives to lure investors. Otherwise, we will find ourselves importing the very components that we could have been manufacturing here.

Unfortunately, the UK invests a lower percentage of GDP than our competitors, such as France, Germany and the US, and we spend a lower percentage of GDP on research and development. What we need to attract investment, and research and development is certainty, along with a clear strategy from Government. First, we need that strong commitment by Government to ramp up investment in FLOW at scale. For that, we need a generous budget in AR6 to allow a number of projects to go ahead. We need the scale so that companies see that it is worth while to invest in component factories in the UK. Scale will bring prices down and make investment economically viable. Companies need to see that more projects are definitely on the horizon. We need certainty, enthusiasm and commitment now, before those companies go elsewhere. We also need long-term clarity on the Celtic sea seabed leasing.

We need investment in our ports now. There is real concern in the industry that the ports are not being developed quickly enough and that investment needs to be much greater. We must recognise that they need huge capital expenditure now and that the revenue will not come until later through the FLOW projects. Although £160 million in grant funding is available through the FLOW manufacturing investment scheme, the FLOW taskforce has identified that some £4 billion will be needed for FLOW ports, so there needs to be a support mechanism for ports to manage that. There need to be interim measures now to ensure progress at pace and the development of a revenue support scheme to give long-term certainty and create assets that will attract investors.

Turning to the national grid, it is estimated that we will need to build some six times as much capacity in the next 10 years as we have in the last 10. I am sure the Minister is well aware of the challenges, but perhaps he could outline what steps he is taking to ensure that we have the capacity and skills for that vital development to take place. It is crazy to continue with a situation where companies are being paid to turn onshore wind turbines off simply because the capacity is not there to transport the cheap electricity to the densely populated areas where it is needed. The challenge to the grid capacity posed by FLOW is enormous, so I would be pleased to hear what the Government are doing in this respect.

Then, sadly, we come to our steel industry. If it were not so tragic, would be farcical. We have had the devastating news from Tata that it wants to close the blast furnaces in Port Talbot, followed a few days later by the news from Scunthorpe that British Steel have also proposed closing the blast furnace. Just when we want to invest in manufacturing the components for FLOW, we are losing the capacity to produce our own steel, and we will have to import more. It is no good saying that this is a green measure, as we know that iron ore will be being smelted with the same blast furnace process elsewhere in the world, quite likely with lower environmental standards. We lose jobs, there is no environmental benefit, it is a threat to our security, and we are more vulnerable to price fluctuations in the steel market, which will have an impact on our ability to manufacture the components for FLOW. Yes, we welcome investment in the electric arc furnaces, but that capacity is needed simply to try to mop up some of the 800 million tonnes of used steel that we export for recycling. Some grades of steel can only be produced in the blast furnace process at present. We need the investment in the technologies of the future to green those processes so that we can produce all the grades of steel that we need in the UK.

Then we come to the railway. The Government have a sorry record on the railway west of Cardiff. When Labour left office in 2010, we had committed to electrify the railway west of Cardiff at least as far as Swansea. Then the Conservative Government cancelled it west of Cardiff. After lobbying by MPs, the Government then relented and agreed to electrify to Swansea, but then they cancelled it again. Contrary to what the former Secretary of State for Wales, the right hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart), said one day at the Dispatch Box—that it is not worth doing because it would not save time—it absolutely is worth doing to help reach net zero by using electricity from renewables, including FLOW, instead of dirty diesel. That will offer an opportunity to upgrade the line not just to Port Talbot, which is now clearly urgent, but on through Llanelli to Pembrokeshire.

To sum up, we have a unique opportunity now to become a world leader in floating offshore wind, bringing down energy costs, cutting emissions, and creating jobs in places like Llanelli. But it needs clear commitment and strategy from Government. I would be very grateful if the Minister could set out in detail what his Government are doing to ensure a sufficient scale of development to attract investment in the UK supply chain, enable rapid enough development of the port infrastructure in Port Talbot and Pembrokeshire, retain primary steelmaking in the UK, ensure the timely development of grid capacity and ensure that we have the skilled workforce we need for the green jobs of the future.