Function
Development and project management covers the activities up to the point of final investment decision (FID) and managing the construction of the project through to commercial operations date (COD). This includes activities required to secure planning consents, such as , activities required to define the design and engineering aspects, and all aspects of project management.
What it costs*
About $202 million for a 1 GW floating offshore wind farm. This does not include any site leasing costs incurred by the project developer. It does include development expenditure incurred by lost projects (not itemised in sections below) to enable a realistic industry LCOE.
Who supplies them
The development and consenting stage is managed by the floating offshore wind farm developer. The main floating offshore wind developers include Bluefloat, BP, Copenhagen Infrastructure Partners, Corio, EDF, EnBW, Equinor, ESB, Falck, Iberdrola, Northland, Ørsted, RWE, Shell, Simply Blue, SSE, TotalEnergies, Ocean Winds and Flotation Energy.
Key facts (UK)
There are no major differences in the development and project management processes between floating offshore wind farms and fixed offshore wind farms. The environmental impacts can be different in some areas, for example mooring lines could have a larger impact on fishing activities.
Sea bed leasing for existing floating offshore wind farms has been managed by The Crown Estate and Crown Estate Scotland through several leasing rounds that began in 2000.
The Crown Estate manages the sea bed in the territorial waters of England, Northern Ireland, and Wales and adjacent areas of the United Kingdom EEZ. Crown Estate Scotland manages the sea bed in Scottish territorial waters and adjacent areas of the United Kingdom EEZ.
Before the consenting process can begin, the developer must secure a sea bed lease from The Crown Estate or Crown Estate Scotland. These are granted through periodic leasing rounds.
In England and Wales, offshore wind projects of more than 100 MW installed capacity are defined as nationally significant infrastructure projects (NSIPs) and are examined by the Planning Inspectorate.
The Secretary of State for the Department for Business, Energy, and Industrial Strategy (BEIS) grants or refuses consent based on a recommendation made by the Planning Inspectorate.
In England, a Development Consent Order is granted under the Planning Act 2008 (as amended) which incorporates a number of consents, including a marine licence and onshore consents. In Wales, the marine licence is determined by Natural Resources Wales.
In Scotland, Marine Scotland examines applications for the offshore works and Scottish Ministers grant or refuse consent under the Marine (Scotland) Act of 2010 (up to 12 nm from shore) and the Marine and Coastal Access Act 2009 for projects 12 to 200 nm from shore. A streamlined process incorporates consent under Section 36 of the Electricity Act 1989 in parallel.
In Northern Ireland, the Marine Strategy and Licensing team within the Department of Agriculture, Environment and Rural Affairs (DAERA) manages the consent application and decision-making process for offshore wind projects.
Other important aspects of the development process include securing land permissions for onshore substations and cable routes and engaging with the supply chain.
Onshore consent including the transmission cable landfall and associated onshore grid connection infrastructure is awarded by the relevant local planning authority, except where a project is handled under an NSIP in England and Wales, in which case the onshore consents are considered within the NSIP process.
Developers typically build internal teams of up to 50 staff during the development phase, which contract specialist packages of work to environmental and engineering consultancies and data acquisition and analysis companies.
The development process from first consideration of a site to FID typically takes between four and seven years in the UK. The offshore wind industry, and in particular some of the organisations which regulate it in Europe, are looking at how it can be accelerated.
Key facts (Japan)
Japan is currently developing the Marine Renewable Energy Act to allow the development of offshore wind projects out to the extent of its EEZ.
The designation of development sea area process in Japan is dealt with by the Ministry of Economy, Trade and Industry (METI) and the Ministry of Land, Infrastructure, Transport and Tourism (MLIT). The Ministries first nominate areas as “Preparatory Stage Areas”, before designating them as “Promising Areas” and later “Promotion Areas”.
Before a project can be designated a Promotion Area, a grid connection must be secured. In the past this was typically done by the developer which would seek to secure a grid connection agreement with the local Transmission System Operator (TSO). However, under the current centralised system, this process has been replaced by the Ministry of Economy, Trade and Industry (METI) securing the grid connection in advance, helping to streamline development and avoid competition over grid access.
Once sites have been designated as Promotion Areas they are auctioned by METI and MLIT. The seabed leasing mechanism is regulated by the “Act on Promoting the Utilization of Sea Areas for the Development of Marine Renewable Energy Power Generation Facilities” and METI and MLIT are responsible for the tender evaluation criteria. Auctions are assessed across price (50% weighting) and non-price criteria (50% weighting) with auctions offering a 30-year occupancy permit (seabed lease), a Feed-In-premium (FIP) contract and a grid connection agreement.
In Japan, offshore wind auctions secure site leasing and offtake at the same time.
- Japan’s Round 1 auction offered a Feed-In-Tariff (FIT) contract and Round 2 offered a Feed-In-Premium (FIP) contract. This shift is designed to bridge the gap between the initial FIT system and eventual direct participation in the wholesale market.
- The FIP contract provides a monthly premium payment from the Organisation for the Cross-region Coordination of Transmission Operators (OCCTO) in addition to the revenue made from selling the electricity directly to the wholesale market, with market price fluctuation.
The relevant permits required for the construction of an offshore windfarm in Japan need to be secured from multiple different administrative organisations at the national and prefectural levels. These requirements vary according to the local prefecture.
In Japan offshore wind farms are subject to the Environmental Impact Assessment Act and developers must produce an Environmental Impact Statement (EIS) which will be assessed by the national government. A new technical guide for environmental impact assessments for offshore wind project has recently been implemented through the Marine Renewable Energy Act.
Key stakeholders in the development and project management process are other marine users, in particular the fishing industry. The development of an offshore wind farm should carefully consider its impact on the fishing industry which already uses the waters. This is especially true for floating offshore wind as the mooring systems used can make shared use of an area for both turbines and fishing unlikely. Early engagement with fishing communities is crucial to address concerns about access, potential displacement, and ecological impacts. Mitigation measures, such as designing shared-use zones and incorporating fishers’ knowledge into planning, can help balance renewable energy goals with the sustainability of local fisheries.
Key facts (South Korea)
In South Korea, there is no significant difference in development process between floating offshore wind farms and fixed offshore wind farms, though environmental impacts, such as the effects of mooring lines on fishing activities, may vary.
The government of South Korea Ministry of Trade, Industry and Energy (MOTIE), Ministry of Oceans and Fisheries (MOF), and related regional agencies. are responsible for overseeing the overall strategic direction for offshore wind energy development, including the allocation of sea bed areas for wind farm projects.
Before developers can begin the consenting process, they must secure a sea bed lease, which is granted through a competitive bidding process organised by MOTIE. This is a two-stage evaluation process.
- At stage 1, projects are prequalified based on non-price factors. MOTIE aims to qualify more projects than there is capacity being auctioned, to increase competition in stage 2.
- At stage 2, projects bid for Renewable Energy Certificates (RECs), these entitle the winning bidders to a 20-year fixed price offtake contract.
Proposed projects must go through an environmental impact assessment (EIA), as part of the permitting process. The permitting process includes the EIA, and maritime use permit, followed by consultations with local stakeholders, including fishermen and coastal communities. Onshore permits for substations, grid connections, and land-based infrastructure are handled by local municipalities and Korea Electric Power Corporation (KEPCO). These permits are typically separate from the offshore wind farm approvals but are necessary for a complete project.
The development process, from site selection to financial investment decision (FID), typically takes around 5 to 7 years in South Korea. The government has expressed interest in speeding up the permitting process to meet the ambitious targets of offshore wind energy capacity, which aim for 14.3 GW of offshore wind by 2030. This includes an emphasis on streamlining the permitting and development process while balancing the need to protect the marine and coastal environments.. Wind farm locations and the height of wind turbines are limited according to the ‘Military base and Military Installation Protection Act’ and the ‘Radio Waves Act’. These two laws are dependent on location but mean there are any areas where development will be extremely difficult.
Developers in South Korea often engage with a range of local and international stakeholders, including environmental consultants, engineers, and legal teams, to navigate both the regulatory landscape and the technical challenges of offshore wind farm development.
Key stakeholders in the development and project management process are other marine users, in particular the fishing industry. The development of an offshore wind farm should carefully consider its impact on the fishing industry which already uses the waters. This is especially true for floating offshore wind as the mooring systems used can make shared use of an area for both turbines and fishing unlikely.
Early engagement with fishing communities is crucial to address concerns about access, potential displacement, and ecological impacts. Mitigation measures, such as designing shared-use zones, providing compensation where necessary, and incorporating fishers’ knowledge into planning, can help balance renewable energy goals with the sustainability of local fisheries.