PARLIAMENTARY DEBATE
Floating Offshore Wind: Celtic Sea - 12 December 2024 (Commons/Westminster Hall)
Debate Detail
Contributions from Jayne Kirkham, are highlighted with a yellow border.
[Clive Efford in the Chair]
15:00:10
Jayne Kirkham
Truro and Falmouth
I beg to move,
That this House has considered floating offshore wind in the Celtic Sea.
It is a pleasure to serve under your chairmanship, Mr Efford. We are here today to talk about floating offshore wind, particularly in the Celtic sea. It is the next frontier in the UK’s clean energy transition, and is positioned to unlock up to 4 GW of power by 2035—enough to power 4 million homes. There are huge opportunities for Cornwall, the south-west of England and Wales, because the Celtic sea is all around us.
The ambition is to put floating offshore wind in the south-west, where it would complement other offshore arrays. The opportunities that arise from it for Cornwall and the region—for our supply chain, which is poised to expand, for our economy and for our people, who will benefit from skilled, good jobs—are vast. However, to be quite brutal, an ambition is pretty much all that it is so far.
The first question is, why floating offshore wind? Eighty per cent of the world’s potential offshore wind resources are in deeper waters. The Climate Change Committee estimates that the UK needs 100 GW of offshore wind by 2050, which is feasible only through the development of FLOW. FLOW is new technology, and the UK could be at the forefront of developing it for a global market, rather than relying on overseas supply chains and losing out on new investment in UK industries. The potential for jobs is vast.
Why the Celtic sea? Offshore wind has a successful history off the east coast of the UK. However, the wind blows both ways. By developing FLOW in the Celtic sea, we can maximise the energy generated and mitigate the intermittency. Previously, that was not possible due to the depth of the seabed, but new floating technology has opened up the region to development, and this could be a huge opportunity if it is done well. The current Government target is for 5 GW to be produced by FLOW by 2030. It is estimated that a 4.5 GW programme in the Celtic sea, as modelled by the Crown Estate, would lead to £1.4 billion in gross value added and 5,300 jobs in the development of port infrastructure and critical component supply across the region.
However, there are barriers. As I have said, FLOW has not got to the stage that we hoped it would be at by now. One of the barriers is the contracts for difference programme. After the failure of allocation round 5 to secure any FLOW projects at all under the last Government, the most recent funding round, under the new Government, resulted in the Green Volt project in the North sea securing CfD funding in AR 6. However, the budget for that pot was still too low for more than one of the three bidding projects to be successful. To reach the Government’s decarbonisation goals, contracts for difference will need to support multiple FLOW projects in each allocation round and the vital test and demonstration models—the stepping stone models—in the Celtic sea.
Projects in the North sea have received significantly more investment to date, and have more developed supply chains and port capabilities, enabling them to deploy FLOW at lower costs. There is no offshore oil or gas legacy in the Celtic sea; it is a greenfield site and lacks the infrastructure that it will need to scale up. It needs targeted support to reach equity with the North sea. Having had only one successful floating offshore project in previous CfD rounds across the Celtic sea has knocked investors’ confidence, so although this is a fantastic opportunity, there is a risk that investors’ interest in the region could be lost if we do not progress quickly.
To support the development of floating offshore wind, we need upgraded ports, which requires significant capital investment. However, uncertainty about the development of FLOW has led to investors holding off from developing those ports until contracts for difference have been awarded. That has led to a mismatch of timelines, as ports need investment about five years before the project is built out. The floating offshore wind manufacturing investment scheme has provided financial support for Port Talbot, although I understand that it has not yet been deployed. However, other ports in the region are needed to deploy floating offshore wind.
A multi-port strategy needs to be pursued in the Celtic sea to make the most of all the existing ports and specialisms. We have a port in Falmouth, which is mainly why I am here, but there are others in Appledore, Plymouth and Milford Haven, so many ports and port clusters could be got up to speed to help develop floating offshore wind in the Celtic sea. Unfortunately, France is ahead of us; it has committed €900 million to the port of Brest, so we need to catch up. The Government’s £1.8 billion for ports in the national wealth fund could really help to provide the leading investment and certainty required to kick-start the port investment, if it is done quickly and in a strategic way.
The focus of developers in the Celtic sea is currently on the stepping stone, or test and demonstration, projects, which have an important role in giving confidence to the industry and reducing the costs and risk of future commercial-scale projects. There are currently two stepping stone projects in the Celtic sea that could be eligible to bid into the next contracts for difference auction round: Erebus and White Cross. However, both projects face challenges with planning issues, bottlenecks onshore in Devon, and investment.
Hexicon’s TwinHub project is the first and only FLOW project in the Celtic sea to win a contract for difference so far in allocation round 4. It consists of two turbines in Cornwall council’s Wave Hub. However, it now faces the same rising costs as the rest of the renewable energy sector, as well as the challenge of developing a supply chain in a region that has not yet had the opportunity to do so. The contract for difference price has become less viable over time. As a more expensive, smaller test model, it was never going to be commercially viable in that way, but as a stepping stone project, it is crucial to the development of FLOW and associated supply chains in the Celtic sea.
There are options available, such as making a deal with the end user for the energy or allowing TwinHub to rebid for a lower CfD price. A proactive and creative solution needs to be found to make those test and demonstration projects viable, and to scale them up in the long run. A consistent pipeline of leasing rounds in CfDs is key to scaling up skills and supply chains ahead of commercial projects coming forward for development. They would encourage developers to commit to the region, lay down roots, and plan ahead and invest.
Annual option fees also have an impact on developers’ ability to use local supply chains that need more time to establish. That increases costs and pushes projects towards using overseas supply chains, removing the benefits for local communities and investments into the region. More could be done by the Crown Estate to support local supply chains, and once the Crown Estate Bill has become law and investment funds are set up between developers and the Crown Estate, that could change. Falmouth port is prepared to match Government funding to get up to speed to support the TwinHub project. There is a risk that the economic benefits of the project may go overseas without additional funding to help develop the supporting onshore industry.
The development of FLOW in the Celtic sea will need huge amounts of mooring line, electric cables and anchors, which the region is currently not ready to supply. A unifying strategy is needed to encourage the necessary investment to develop those capabilities, along with others across the region. The floating offshore wind taskforce has identified realisable UK value in key components for floating wind, such as installation, mooring and anchors, concrete platforms, steel platforms, operation, maintenance and development services, ports and logistics, and array cables.
At present, the national grid is a large barrier for projects. The TwinHub project has been struggling to get the full grid capacity that it needs until 2037. We need a far-sighted and co-ordinated approach from the National Energy System Operator, which has been newly nationalised. NESO is beginning a holistic network design with the Crown Estate, but that needs to happen quickly and to be scaled up. The Celtic sea is a nationally, and potentially globally, important infrastructure project, and as such, it requires a specific strategic focus from central Government.
Having a GB Energy strategy on Celtic sea FLOW, with hopefully a presence in the region—maybe in Cornwall—would support co-ordination of infrastructure, industry and workforce. However, a complex set of stakeholders is involved, including government at all levels: national, devolved, Welsh nation, and different levels of south-west councils, as well as The Great South West, which is a pan-regional economic partnership. There is also Celtic Sea Power, and the newly set up Cornwall FLOW Commission, which has already done some of the work required to co-ordinate the supply chain and work out how to produce a skilled workforce—this needs a concentrated focus. There is currently no joined-up spatial strategy for the Celtic sea. Consultation on that strategy for the ocean, with fishers, conservationists and scientists, needs to be done very soon.
Having a unified strategy would enable phased development and, crucially, would support the prioritisation of investment in infrastructure and the local supply chain. It would also help streamline planning. Current planning and consent is too slow. A project currently takes an average of 15 years to move from leasing to operation. To reach the Government’s net zero goals, we need to speed up the process. For example, the White Cross test and demonstration project in north Devon has been struggling to get planning consent for more than 18 months.
What do we need? What are the key asks to get this going? A one-size-fits-all approach for the UK has not produced the necessary investment to get floating offshore wind off the ground in the Celtic sea. By putting it in direct competition with the North sea, the Celtic sea is likely to continue to lose out and the UK will lose the opportunity to harness all the benefits FLOW can bring. AR7 could, and should, ringfence funding for floating offshore wind, along either geographical or technological lines. Geographical ringfencing would remove direct competition with the North sea. Technological ringfencing would improve the competitive position of the test and demo stepping stone projects, which are so crucial to getting commercial sites up and running and which play a critical role in maintaining investor confidence in the region.
To overcome the challenges of developing onshore supply chain capabilities to deploy FLOW in the Celtic sea, the Government could support collaborative and strategic investment in ports, rather than putting them in competition with one another as FLOWMIS did. A specific targeted wealth fund could be created to invest in infrastructure, supply chain and to lever in private investment, with particular focus on ports. In the short term, we can have logistics hubs and technologies to include temporary portside space like Tugdock in the south-west. But long term, we need to invest not only in our ports and infrastructure, but in our rail, road and digital.
A co-ordinated approach to how the Department for Energy Security and Net Zero, the Crown Estate, GB Energy and the national wealth fund exercise their procurement and auction processes, and the use of World Trade Organisation and trade and co-operation agreement exceptions for reasons of national energy security and net zero targets, could give freedom to add clauses into contracts and leases to encourage local supply chain building and workforce training investment by developers. Some developers have expressed interest in doing that and are even setting up headquarters to co-ordinate it. The Crown Estate’s option fees and the rules around how they are used could be reconsidered, so that they could be deployed as a catalyst for greater investment in that regional supply chain. DESNZ and the Crown Estate could put supply chain social value and biodiversity net gain incentives directly into those local delivery mechanisms.
We have world-class further education colleges in Cornwall that are ready to step up and provide the specialisms and scale of the workforce we need, but we need direction, funding and a long-term career pathway. We have discussed previously a FLOWmark programme to build up those skills specifically for this industry in our region.
In summary, we need a unified national strategy for floating offshore wind and a regional masterplan for FLOW in the Celtic sea. Without the strategy, we risk losing out on the benefits of this nationally important infrastructure project, including its export potential. We risk the goal of reaching clean energy by 2030. There is a huge future in the Celtic sea, and we need to reach out and grasp it.
That this House has considered floating offshore wind in the Celtic Sea.
It is a pleasure to serve under your chairmanship, Mr Efford. We are here today to talk about floating offshore wind, particularly in the Celtic sea. It is the next frontier in the UK’s clean energy transition, and is positioned to unlock up to 4 GW of power by 2035—enough to power 4 million homes. There are huge opportunities for Cornwall, the south-west of England and Wales, because the Celtic sea is all around us.
The ambition is to put floating offshore wind in the south-west, where it would complement other offshore arrays. The opportunities that arise from it for Cornwall and the region—for our supply chain, which is poised to expand, for our economy and for our people, who will benefit from skilled, good jobs—are vast. However, to be quite brutal, an ambition is pretty much all that it is so far.
The first question is, why floating offshore wind? Eighty per cent of the world’s potential offshore wind resources are in deeper waters. The Climate Change Committee estimates that the UK needs 100 GW of offshore wind by 2050, which is feasible only through the development of FLOW. FLOW is new technology, and the UK could be at the forefront of developing it for a global market, rather than relying on overseas supply chains and losing out on new investment in UK industries. The potential for jobs is vast.
Why the Celtic sea? Offshore wind has a successful history off the east coast of the UK. However, the wind blows both ways. By developing FLOW in the Celtic sea, we can maximise the energy generated and mitigate the intermittency. Previously, that was not possible due to the depth of the seabed, but new floating technology has opened up the region to development, and this could be a huge opportunity if it is done well. The current Government target is for 5 GW to be produced by FLOW by 2030. It is estimated that a 4.5 GW programme in the Celtic sea, as modelled by the Crown Estate, would lead to £1.4 billion in gross value added and 5,300 jobs in the development of port infrastructure and critical component supply across the region.
However, there are barriers. As I have said, FLOW has not got to the stage that we hoped it would be at by now. One of the barriers is the contracts for difference programme. After the failure of allocation round 5 to secure any FLOW projects at all under the last Government, the most recent funding round, under the new Government, resulted in the Green Volt project in the North sea securing CfD funding in AR 6. However, the budget for that pot was still too low for more than one of the three bidding projects to be successful. To reach the Government’s decarbonisation goals, contracts for difference will need to support multiple FLOW projects in each allocation round and the vital test and demonstration models—the stepping stone models—in the Celtic sea.
Projects in the North sea have received significantly more investment to date, and have more developed supply chains and port capabilities, enabling them to deploy FLOW at lower costs. There is no offshore oil or gas legacy in the Celtic sea; it is a greenfield site and lacks the infrastructure that it will need to scale up. It needs targeted support to reach equity with the North sea. Having had only one successful floating offshore project in previous CfD rounds across the Celtic sea has knocked investors’ confidence, so although this is a fantastic opportunity, there is a risk that investors’ interest in the region could be lost if we do not progress quickly.
To support the development of floating offshore wind, we need upgraded ports, which requires significant capital investment. However, uncertainty about the development of FLOW has led to investors holding off from developing those ports until contracts for difference have been awarded. That has led to a mismatch of timelines, as ports need investment about five years before the project is built out. The floating offshore wind manufacturing investment scheme has provided financial support for Port Talbot, although I understand that it has not yet been deployed. However, other ports in the region are needed to deploy floating offshore wind.
A multi-port strategy needs to be pursued in the Celtic sea to make the most of all the existing ports and specialisms. We have a port in Falmouth, which is mainly why I am here, but there are others in Appledore, Plymouth and Milford Haven, so many ports and port clusters could be got up to speed to help develop floating offshore wind in the Celtic sea. Unfortunately, France is ahead of us; it has committed €900 million to the port of Brest, so we need to catch up. The Government’s £1.8 billion for ports in the national wealth fund could really help to provide the leading investment and certainty required to kick-start the port investment, if it is done quickly and in a strategic way.
The focus of developers in the Celtic sea is currently on the stepping stone, or test and demonstration, projects, which have an important role in giving confidence to the industry and reducing the costs and risk of future commercial-scale projects. There are currently two stepping stone projects in the Celtic sea that could be eligible to bid into the next contracts for difference auction round: Erebus and White Cross. However, both projects face challenges with planning issues, bottlenecks onshore in Devon, and investment.
Hexicon’s TwinHub project is the first and only FLOW project in the Celtic sea to win a contract for difference so far in allocation round 4. It consists of two turbines in Cornwall council’s Wave Hub. However, it now faces the same rising costs as the rest of the renewable energy sector, as well as the challenge of developing a supply chain in a region that has not yet had the opportunity to do so. The contract for difference price has become less viable over time. As a more expensive, smaller test model, it was never going to be commercially viable in that way, but as a stepping stone project, it is crucial to the development of FLOW and associated supply chains in the Celtic sea.
There are options available, such as making a deal with the end user for the energy or allowing TwinHub to rebid for a lower CfD price. A proactive and creative solution needs to be found to make those test and demonstration projects viable, and to scale them up in the long run. A consistent pipeline of leasing rounds in CfDs is key to scaling up skills and supply chains ahead of commercial projects coming forward for development. They would encourage developers to commit to the region, lay down roots, and plan ahead and invest.
Annual option fees also have an impact on developers’ ability to use local supply chains that need more time to establish. That increases costs and pushes projects towards using overseas supply chains, removing the benefits for local communities and investments into the region. More could be done by the Crown Estate to support local supply chains, and once the Crown Estate Bill has become law and investment funds are set up between developers and the Crown Estate, that could change. Falmouth port is prepared to match Government funding to get up to speed to support the TwinHub project. There is a risk that the economic benefits of the project may go overseas without additional funding to help develop the supporting onshore industry.
The development of FLOW in the Celtic sea will need huge amounts of mooring line, electric cables and anchors, which the region is currently not ready to supply. A unifying strategy is needed to encourage the necessary investment to develop those capabilities, along with others across the region. The floating offshore wind taskforce has identified realisable UK value in key components for floating wind, such as installation, mooring and anchors, concrete platforms, steel platforms, operation, maintenance and development services, ports and logistics, and array cables.
At present, the national grid is a large barrier for projects. The TwinHub project has been struggling to get the full grid capacity that it needs until 2037. We need a far-sighted and co-ordinated approach from the National Energy System Operator, which has been newly nationalised. NESO is beginning a holistic network design with the Crown Estate, but that needs to happen quickly and to be scaled up. The Celtic sea is a nationally, and potentially globally, important infrastructure project, and as such, it requires a specific strategic focus from central Government.
Having a GB Energy strategy on Celtic sea FLOW, with hopefully a presence in the region—maybe in Cornwall—would support co-ordination of infrastructure, industry and workforce. However, a complex set of stakeholders is involved, including government at all levels: national, devolved, Welsh nation, and different levels of south-west councils, as well as The Great South West, which is a pan-regional economic partnership. There is also Celtic Sea Power, and the newly set up Cornwall FLOW Commission, which has already done some of the work required to co-ordinate the supply chain and work out how to produce a skilled workforce—this needs a concentrated focus. There is currently no joined-up spatial strategy for the Celtic sea. Consultation on that strategy for the ocean, with fishers, conservationists and scientists, needs to be done very soon.
Having a unified strategy would enable phased development and, crucially, would support the prioritisation of investment in infrastructure and the local supply chain. It would also help streamline planning. Current planning and consent is too slow. A project currently takes an average of 15 years to move from leasing to operation. To reach the Government’s net zero goals, we need to speed up the process. For example, the White Cross test and demonstration project in north Devon has been struggling to get planning consent for more than 18 months.
What do we need? What are the key asks to get this going? A one-size-fits-all approach for the UK has not produced the necessary investment to get floating offshore wind off the ground in the Celtic sea. By putting it in direct competition with the North sea, the Celtic sea is likely to continue to lose out and the UK will lose the opportunity to harness all the benefits FLOW can bring. AR7 could, and should, ringfence funding for floating offshore wind, along either geographical or technological lines. Geographical ringfencing would remove direct competition with the North sea. Technological ringfencing would improve the competitive position of the test and demo stepping stone projects, which are so crucial to getting commercial sites up and running and which play a critical role in maintaining investor confidence in the region.
To overcome the challenges of developing onshore supply chain capabilities to deploy FLOW in the Celtic sea, the Government could support collaborative and strategic investment in ports, rather than putting them in competition with one another as FLOWMIS did. A specific targeted wealth fund could be created to invest in infrastructure, supply chain and to lever in private investment, with particular focus on ports. In the short term, we can have logistics hubs and technologies to include temporary portside space like Tugdock in the south-west. But long term, we need to invest not only in our ports and infrastructure, but in our rail, road and digital.
A co-ordinated approach to how the Department for Energy Security and Net Zero, the Crown Estate, GB Energy and the national wealth fund exercise their procurement and auction processes, and the use of World Trade Organisation and trade and co-operation agreement exceptions for reasons of national energy security and net zero targets, could give freedom to add clauses into contracts and leases to encourage local supply chain building and workforce training investment by developers. Some developers have expressed interest in doing that and are even setting up headquarters to co-ordinate it. The Crown Estate’s option fees and the rules around how they are used could be reconsidered, so that they could be deployed as a catalyst for greater investment in that regional supply chain. DESNZ and the Crown Estate could put supply chain social value and biodiversity net gain incentives directly into those local delivery mechanisms.
We have world-class further education colleges in Cornwall that are ready to step up and provide the specialisms and scale of the workforce we need, but we need direction, funding and a long-term career pathway. We have discussed previously a FLOWmark programme to build up those skills specifically for this industry in our region.
In summary, we need a unified national strategy for floating offshore wind and a regional masterplan for FLOW in the Celtic sea. Without the strategy, we risk losing out on the benefits of this nationally important infrastructure project, including its export potential. We risk the goal of reaching clean energy by 2030. There is a huge future in the Celtic sea, and we need to reach out and grasp it.
in the Chair
Clive Efford
We have plenty of time for this debate. I remind Members to bob in their places if they intend to speak, so I have some idea of who will contribute.
15:13:54
Henry Tufnell
Mid and South Pembrokeshire
It is a pleasure to serve under your chairmanship, Mr Efford. I am grateful to my hon. Friend the Member for Truro and Falmouth (Jayne Kirkham) for expressing so eloquently the challenges we face in the Celtic sea. I would point to the work that we have been doing in our all-party group for the Celtic sea to look at this issue from a regional perspective. The opportunities are so vast that this is not a situation where competing interests are trying to divvy things up, so to speak. There is sufficient food at the table for all.
We have exceptional natural resources: high average wind speeds of eight metres per second and water depths of 50 metres. These unique conditions provide the framework for us to achieve the election manifesto commitments that we, as a party, have put at the front and centre of our agenda: clean energy and economic growth.
In my constituency, in Pembrokeshire, one in four children is living in poverty, and these serious systemic issues stretch back over multiple generations. The oil and gas industry radically transformed my constituency, but over time we have gone from having four oil refineries to having just one. We have transferred into natural gas—we have liquefied natural gas—but the challenge, as a result of that decline, is to work out what the alternative is for people in my constituency. How can we ensure that the brightest and the best can remain in the county, succeed in the jobs of the future and see that just transition happen?
The opportunity is there; floating offshore wind is our opportunity—if it is not, then what is? It is our opportunity to bring back prosperity and opportunity and to give people in my constituency hope. However, my hon. Friend the Member for Truro and Falmouth set out the challenges we face, and it is incumbent on us—not only as individual Members of Parliament but as a party of social justice and change—to rise to meet those challenges.
We have been partnering with the Crown Estate and looking at supply chains. We have to tackle the issue of ports. We have to look at CfD and, fundamentally, at the picture on skills. At the end of 2023, there was a total of about 230 MW net of installed floating offshore wind. There was 101 MW in Norway, 78 MW in the UK, 25 MW in Portugal, 23 MW in China, 5 MW in Japan, and 2 MW in both France and Spain. It is unusual, and incredibly exciting, that the UK can play its part in leading on a technology. Not only are we at the forefront of this transition and of combating the global challenge of climate change, but we are looking to play our part in the reindustrialisation process.
Let me turn to the Crown Estate. There have been issues, which my hon. Friend has alluded to, including annual option fees. The annual option fees placed on the leasing round will have a devastating effect on the commercial viability of developers in facilitating the conditions to take forward that reindustrialisation package, provide the new jobs and do that domestic manufacturing, such as the fabrication—anchors and cabling.
The Crown Estate produced a report saying that the first 5.5 GW would involve 5,000 jobs and require 260 turbines, 1,000 anchors and 900 km of cables. But where are those things going to be produced? Will it be in Spain or South Korea? No. I want them done in Pembrokeshire—I want to produce anchors and cabling in Pembrokeshire. I want a future for Port Talbot in providing steel for that fabrication and those substructures. The prize is there—we just have to seize it.
It simply is not good enough for the Crown Estate to sit and think about maximising its own revenue generation from the seabed. It is the Crown Estate’s time to step up. We as a Government have united with it—in terms of the legislation currently going through the House, and in allowing it to have greater borrowing power—but the time for action is now. The Crown Estate cannot sit behind WTO rules and use them as an excuse for inaction; it must seize the day and take control, and in doing so create the right conditions within the leasing round and create the pipeline that we need. Without that pipeline, there can be no security for the developers or the local supply chain. We need to have a clear route as to how we can realise the 25 GW that has been set out. This whole project cannot be about maximising the 12% for the Crown Estate—that is greed. This must go beyond basic greed—one of the seven deadly sins. The Crown Estate cannot be obsessed with maximising its revenue for the sake of greed. This is a project for the benefit of the Celtic sea and the country, and we undertake it because it is so vital.
With the supply chain, there are plenty of opportunities in terms of the numbers, as I have set out. There is exponential growth, from 4.5% to 12% to 25%, which must be set out clearly. As those numbers increase, so will the demand in the supply chain. However, the challenge for local developers, particularly those I have spoken to in my Pembrokeshire constituency, is that there is no certainty of revenue. They cannot plan those contracts, because they are not in place, and they are not in place because there is a lack of strategic planning and the conditions have not been set up. If a developer came in, bid for a seabed lease and got it, they would be hit with annual option fees, and they have had to pay through the nose to get the lease. Why would they pay a 20% uplift on an anchor in Milford Haven when they could go and get it from overseas in whichever country they chose that has the lowest common denominator on price? There is an up-front capital cost here, but the prize is in the long-term realisation of the benefit: cheaper bills, reindustrialisation and the UK once again leading as an industrial, manufacturing force. That is no small prize.
I repeat the words of my hon. Friend the Member for Truro and Falmouth about the challenges facing Port Talbot in getting the money out the door from FLOWMIS, but we have equal challenges in the port of Milford Haven. We need to have confidence, and that confidence comes from Government and from setting those conditions. I have been incredibly encouraged by the words of my hon. Friend the Minister, which is absolutely fantastic, and by the national wealth fund. We now have these mechanisms from our Labour Government in place to create the foundation and confidence for the private sector to invest in ports, and that is where it will all stem from.
This is about the ports and the supply chain, but it is also about the skills. In my constituency, we have the great Pembrokeshire college, which has been doing fantastic work with the private sector to improve the facilities available to students. We recently unveiled a new facility with Shell, which has invested £1 million in Pembrokeshire college. These partnerships between the public and private sectors to upskill people and address the skills gap are so fundamental, but we must have that co-ordinated strategy. Without that, things fall apart because of how complex and difficult this issue is.
We are coming from a situation where we did not have an industrial strategy and where, under the previous Government, the market would decide. We would create the conditions, then we would go to the lowest common denominator on price, and it could be anyone’s business. That is not the way that we approach things. We have a strong lead from this Government. We create the conditions in respect of public investment, allowing and facilitating private investment. That is the way we try to have reindustrialisation and address regional inequality.
My hon. Friend the Member for Truro and Falmouth made a critical point about contracts for difference, which fall squarely in DESNZ. The issue we have had with these stepping-stone projects is that floating offshore wind is an inherently nascent industry, and it is not well suited to that competitive framework, which is driven by the lowest cost per MWh. Fixed wind did not have to contend with that when it began as an industry and a technology, so we are forcing floating offshore wind to play in an inherently competitive market to which it is totally ill suited.
On the topic of grid, capacity is a real difficulty and will be a real challenge. We have a grid connection in Pembroke coming out of RWE at the Pembroke Net Zero Centre. If we can get that pipeline, the power coming off these turbines will be phenomenal and could meet half the UK’s power needs. We have to meet that challenge, so I am glad the Labour Government are taking the bull by the horns, if that is the right expression, by attempting to change the national grid.
The key is merit: we have to prioritise these projects. It comes back to the fundamental question of delivery; the project is complex, and the crux of all of this—the crux of the Government, if I may be so bold—is delivery. It is an honour to be part of this debate, which is about pushing this agenda forward.
We have exceptional natural resources: high average wind speeds of eight metres per second and water depths of 50 metres. These unique conditions provide the framework for us to achieve the election manifesto commitments that we, as a party, have put at the front and centre of our agenda: clean energy and economic growth.
In my constituency, in Pembrokeshire, one in four children is living in poverty, and these serious systemic issues stretch back over multiple generations. The oil and gas industry radically transformed my constituency, but over time we have gone from having four oil refineries to having just one. We have transferred into natural gas—we have liquefied natural gas—but the challenge, as a result of that decline, is to work out what the alternative is for people in my constituency. How can we ensure that the brightest and the best can remain in the county, succeed in the jobs of the future and see that just transition happen?
The opportunity is there; floating offshore wind is our opportunity—if it is not, then what is? It is our opportunity to bring back prosperity and opportunity and to give people in my constituency hope. However, my hon. Friend the Member for Truro and Falmouth set out the challenges we face, and it is incumbent on us—not only as individual Members of Parliament but as a party of social justice and change—to rise to meet those challenges.
We have been partnering with the Crown Estate and looking at supply chains. We have to tackle the issue of ports. We have to look at CfD and, fundamentally, at the picture on skills. At the end of 2023, there was a total of about 230 MW net of installed floating offshore wind. There was 101 MW in Norway, 78 MW in the UK, 25 MW in Portugal, 23 MW in China, 5 MW in Japan, and 2 MW in both France and Spain. It is unusual, and incredibly exciting, that the UK can play its part in leading on a technology. Not only are we at the forefront of this transition and of combating the global challenge of climate change, but we are looking to play our part in the reindustrialisation process.
Let me turn to the Crown Estate. There have been issues, which my hon. Friend has alluded to, including annual option fees. The annual option fees placed on the leasing round will have a devastating effect on the commercial viability of developers in facilitating the conditions to take forward that reindustrialisation package, provide the new jobs and do that domestic manufacturing, such as the fabrication—anchors and cabling.
The Crown Estate produced a report saying that the first 5.5 GW would involve 5,000 jobs and require 260 turbines, 1,000 anchors and 900 km of cables. But where are those things going to be produced? Will it be in Spain or South Korea? No. I want them done in Pembrokeshire—I want to produce anchors and cabling in Pembrokeshire. I want a future for Port Talbot in providing steel for that fabrication and those substructures. The prize is there—we just have to seize it.
It simply is not good enough for the Crown Estate to sit and think about maximising its own revenue generation from the seabed. It is the Crown Estate’s time to step up. We as a Government have united with it—in terms of the legislation currently going through the House, and in allowing it to have greater borrowing power—but the time for action is now. The Crown Estate cannot sit behind WTO rules and use them as an excuse for inaction; it must seize the day and take control, and in doing so create the right conditions within the leasing round and create the pipeline that we need. Without that pipeline, there can be no security for the developers or the local supply chain. We need to have a clear route as to how we can realise the 25 GW that has been set out. This whole project cannot be about maximising the 12% for the Crown Estate—that is greed. This must go beyond basic greed—one of the seven deadly sins. The Crown Estate cannot be obsessed with maximising its revenue for the sake of greed. This is a project for the benefit of the Celtic sea and the country, and we undertake it because it is so vital.
With the supply chain, there are plenty of opportunities in terms of the numbers, as I have set out. There is exponential growth, from 4.5% to 12% to 25%, which must be set out clearly. As those numbers increase, so will the demand in the supply chain. However, the challenge for local developers, particularly those I have spoken to in my Pembrokeshire constituency, is that there is no certainty of revenue. They cannot plan those contracts, because they are not in place, and they are not in place because there is a lack of strategic planning and the conditions have not been set up. If a developer came in, bid for a seabed lease and got it, they would be hit with annual option fees, and they have had to pay through the nose to get the lease. Why would they pay a 20% uplift on an anchor in Milford Haven when they could go and get it from overseas in whichever country they chose that has the lowest common denominator on price? There is an up-front capital cost here, but the prize is in the long-term realisation of the benefit: cheaper bills, reindustrialisation and the UK once again leading as an industrial, manufacturing force. That is no small prize.
I repeat the words of my hon. Friend the Member for Truro and Falmouth about the challenges facing Port Talbot in getting the money out the door from FLOWMIS, but we have equal challenges in the port of Milford Haven. We need to have confidence, and that confidence comes from Government and from setting those conditions. I have been incredibly encouraged by the words of my hon. Friend the Minister, which is absolutely fantastic, and by the national wealth fund. We now have these mechanisms from our Labour Government in place to create the foundation and confidence for the private sector to invest in ports, and that is where it will all stem from.
This is about the ports and the supply chain, but it is also about the skills. In my constituency, we have the great Pembrokeshire college, which has been doing fantastic work with the private sector to improve the facilities available to students. We recently unveiled a new facility with Shell, which has invested £1 million in Pembrokeshire college. These partnerships between the public and private sectors to upskill people and address the skills gap are so fundamental, but we must have that co-ordinated strategy. Without that, things fall apart because of how complex and difficult this issue is.
We are coming from a situation where we did not have an industrial strategy and where, under the previous Government, the market would decide. We would create the conditions, then we would go to the lowest common denominator on price, and it could be anyone’s business. That is not the way that we approach things. We have a strong lead from this Government. We create the conditions in respect of public investment, allowing and facilitating private investment. That is the way we try to have reindustrialisation and address regional inequality.
My hon. Friend the Member for Truro and Falmouth made a critical point about contracts for difference, which fall squarely in DESNZ. The issue we have had with these stepping-stone projects is that floating offshore wind is an inherently nascent industry, and it is not well suited to that competitive framework, which is driven by the lowest cost per MWh. Fixed wind did not have to contend with that when it began as an industry and a technology, so we are forcing floating offshore wind to play in an inherently competitive market to which it is totally ill suited.
On the topic of grid, capacity is a real difficulty and will be a real challenge. We have a grid connection in Pembroke coming out of RWE at the Pembroke Net Zero Centre. If we can get that pipeline, the power coming off these turbines will be phenomenal and could meet half the UK’s power needs. We have to meet that challenge, so I am glad the Labour Government are taking the bull by the horns, if that is the right expression, by attempting to change the national grid.
The key is merit: we have to prioritise these projects. It comes back to the fundamental question of delivery; the project is complex, and the crux of all of this—the crux of the Government, if I may be so bold—is delivery. It is an honour to be part of this debate, which is about pushing this agenda forward.
15:26:01
Perran Moon
Camborne and Redruth
It is a pleasure to serve under your chairship, Mr Efford. I congratulate my hon. Friend the Member for Truro and Falmouth (Jayne Kirkham) on securing this debate on floating offshore wind in the Celtic sea, and I thank my hon. Friend the Member for Mid and South Pembrokeshire (Henry Tufnell) for his passionate words.
My hon. Friend the Member for Truro and Falmouth identified the opportunity and the challenge at hand, and I am pleased to complement the framework that she set out. I will emphasise the cross-cutting issue of skills, and the importance, right across Cornwall, of developing Falmouth port. The development of floating offshore wind technology in the Celtic sea represents not just a renewable energy opportunity, but a chance to transform Cornwall’s economy and establish the UK as a global leader in clean energy.
In terms of the share of renewables in our total energy mix, fixed offshore wind, supported by contracts for difference, which my hon. Friend the Member for Mid and South Pembrokeshire mentioned, has been and will continue to be crucial, as the recent NESO report pointed out. The UK has been able to capture jobs in the development, operation and maintenance phases of the fixed offshore wind supply chain, but not in the capital phase, such as manufacturing and installation. Most of the parts the UK uses are deployed from mainland European ports, using imported components. Despite the successful roll-out of fixed offshore turbines, we can learn from these issues, as floating offshore wind represents the next generation of technology out in the Celtic sea.
In 2023, Tim Pick from the Clean Power 2030 Advisory Commission published an independent report on offshore wind, in which he highlighted the case of Kincardine floating offshore wind farm. I am taking the debate from the Celtic sea up to Scotland because the report describes how the foundations for new floating offshore wind structures were made in Spain, at great expense, taken to Rotterdam for assembly, using locally sourced components to keep down costs, and finally towed to Scotland and installed. That is indicative of the offshore supply chain, and it means that fixed offshore wind has not captured as many jobs in the UK as it could do.
The Celtic sea floating offshore wind sector has the potential to create about 5,300 jobs across Cornwall, the south-west of England and, yes, Pembrokeshire in south Wales. There remains a real risk that we will not grasp the potential by building up the local workforce. We need to demonstrate that young people and skilled workers do not need to migrate from Cornwall for well-paid employment opportunities in the green economy.
As my hon. Friend the Member for Mid and South Pembrokeshire said, floating offshore wind in the Celtic sea is a relatively nascent industry, which means that its skills and workforce need to be supported, planned and nurtured. If we do not do this, the industry will not be able to recruit the staff needed for these vocational and technical skills.
A reactive, short-term approach to upskilling will be inadequate. We need to look at a long-term strategic approach to workforce development, one that focuses on clear, sustainable career pathways, such as floating platforms assembly, welding and marine licence development. Those are just a few examples of the strong pipeline of talent needed for the floating offshore wind sector and the skills required to populate the vacancies in the supply chain. I am pleased it was announced this week that the Blue Abyss facility near Newquay has received match funding from the Crown Estate’s supply chain accelerator fund.
To make this vision a reality, collaboration is key. We need a collective effort to build workforce capacity in preparation for the opportunity presented by this new sector. Every stakeholder has a role to play, from individual learners engaged in skills training to schools, further education colleges, higher education institutions, independent training providers and the private sector and future employers.
There are several examples in Cornwall, most notably the University of Exeter’s Penryn campus, which hosts the largest number of top 10 climate change scientists in the world and produces world-leading courses. There are apprenticeships at Truro and Penwith college and vocational opportunities at Falmouth marine school and Cornwall college in Camborne and Redruth, which is barely one mile away from South Crofty tin mine, which would be a major beneficiary of a development of Falmouth port.
We know there are structural imbalances when it comes to qualifications. According to Skills England, 38% of people in Cornwall have level 4 qualifications or above, compared with 61% in London. The new growth and skills levy, which will enable employers to access a broader range of high-quality training offers, will be fundamental if applied to this sector. Skills England will act as a vital bridge between industrial strategy, training providers and businesses.
I turn briefly to Falmouth port and the infrastructure in relation to the Celtic sea. As my hon. Friend the Member for Truro and Falmouth said, we must regenerate Falmouth port to enable the roll-out of floating offshore wind. We must ensure that it becomes a key hub for operations and maintenance. To have the best opportunity to achieve economic growth and increase productivity, we need to build up our supply chain. As turbines increase in size with the proliferation of floating offshore wind, there is a need for larger-scale and better-equipped port facilities in general. That should be partnered with local manufacturing.
Floating offshore wind sub-structures alone can measure up to 80 metres across and weigh thousands of tonnes, with the turbines themselves expected to reach as high as 300 metres. Ports need adequate quays, crane capacity and lay-down space to accommodate these vast engineering structures, so where better to develop than the third-deepest natural harbour in the world at Falmouth?
To echo comments by my hon. Friend the Member for Truro and Falmouth, we need the Crown Estate to lease more projects in the Celtic sea and we need to ringfence the funding for the Celtic sea at the next auction round. We must work towards building up the capacity at Falmouth port. If we are to realise a just transition, we must ensure that it delivers as much opportunity for UK businesses and communities as possible. Successive Governments have failed to deliver the benefits to communities. The Cornish Celtic tiger can drive the world-leading deployment of floating offshore wind at commercial scale and sow the seed for a cluster of expertise and experience right across the sector.
My hon. Friend the Member for Truro and Falmouth identified the opportunity and the challenge at hand, and I am pleased to complement the framework that she set out. I will emphasise the cross-cutting issue of skills, and the importance, right across Cornwall, of developing Falmouth port. The development of floating offshore wind technology in the Celtic sea represents not just a renewable energy opportunity, but a chance to transform Cornwall’s economy and establish the UK as a global leader in clean energy.
In terms of the share of renewables in our total energy mix, fixed offshore wind, supported by contracts for difference, which my hon. Friend the Member for Mid and South Pembrokeshire mentioned, has been and will continue to be crucial, as the recent NESO report pointed out. The UK has been able to capture jobs in the development, operation and maintenance phases of the fixed offshore wind supply chain, but not in the capital phase, such as manufacturing and installation. Most of the parts the UK uses are deployed from mainland European ports, using imported components. Despite the successful roll-out of fixed offshore turbines, we can learn from these issues, as floating offshore wind represents the next generation of technology out in the Celtic sea.
In 2023, Tim Pick from the Clean Power 2030 Advisory Commission published an independent report on offshore wind, in which he highlighted the case of Kincardine floating offshore wind farm. I am taking the debate from the Celtic sea up to Scotland because the report describes how the foundations for new floating offshore wind structures were made in Spain, at great expense, taken to Rotterdam for assembly, using locally sourced components to keep down costs, and finally towed to Scotland and installed. That is indicative of the offshore supply chain, and it means that fixed offshore wind has not captured as many jobs in the UK as it could do.
The Celtic sea floating offshore wind sector has the potential to create about 5,300 jobs across Cornwall, the south-west of England and, yes, Pembrokeshire in south Wales. There remains a real risk that we will not grasp the potential by building up the local workforce. We need to demonstrate that young people and skilled workers do not need to migrate from Cornwall for well-paid employment opportunities in the green economy.
As my hon. Friend the Member for Mid and South Pembrokeshire said, floating offshore wind in the Celtic sea is a relatively nascent industry, which means that its skills and workforce need to be supported, planned and nurtured. If we do not do this, the industry will not be able to recruit the staff needed for these vocational and technical skills.
A reactive, short-term approach to upskilling will be inadequate. We need to look at a long-term strategic approach to workforce development, one that focuses on clear, sustainable career pathways, such as floating platforms assembly, welding and marine licence development. Those are just a few examples of the strong pipeline of talent needed for the floating offshore wind sector and the skills required to populate the vacancies in the supply chain. I am pleased it was announced this week that the Blue Abyss facility near Newquay has received match funding from the Crown Estate’s supply chain accelerator fund.
To make this vision a reality, collaboration is key. We need a collective effort to build workforce capacity in preparation for the opportunity presented by this new sector. Every stakeholder has a role to play, from individual learners engaged in skills training to schools, further education colleges, higher education institutions, independent training providers and the private sector and future employers.
There are several examples in Cornwall, most notably the University of Exeter’s Penryn campus, which hosts the largest number of top 10 climate change scientists in the world and produces world-leading courses. There are apprenticeships at Truro and Penwith college and vocational opportunities at Falmouth marine school and Cornwall college in Camborne and Redruth, which is barely one mile away from South Crofty tin mine, which would be a major beneficiary of a development of Falmouth port.
We know there are structural imbalances when it comes to qualifications. According to Skills England, 38% of people in Cornwall have level 4 qualifications or above, compared with 61% in London. The new growth and skills levy, which will enable employers to access a broader range of high-quality training offers, will be fundamental if applied to this sector. Skills England will act as a vital bridge between industrial strategy, training providers and businesses.
I turn briefly to Falmouth port and the infrastructure in relation to the Celtic sea. As my hon. Friend the Member for Truro and Falmouth said, we must regenerate Falmouth port to enable the roll-out of floating offshore wind. We must ensure that it becomes a key hub for operations and maintenance. To have the best opportunity to achieve economic growth and increase productivity, we need to build up our supply chain. As turbines increase in size with the proliferation of floating offshore wind, there is a need for larger-scale and better-equipped port facilities in general. That should be partnered with local manufacturing.
Floating offshore wind sub-structures alone can measure up to 80 metres across and weigh thousands of tonnes, with the turbines themselves expected to reach as high as 300 metres. Ports need adequate quays, crane capacity and lay-down space to accommodate these vast engineering structures, so where better to develop than the third-deepest natural harbour in the world at Falmouth?
To echo comments by my hon. Friend the Member for Truro and Falmouth, we need the Crown Estate to lease more projects in the Celtic sea and we need to ringfence the funding for the Celtic sea at the next auction round. We must work towards building up the capacity at Falmouth port. If we are to realise a just transition, we must ensure that it delivers as much opportunity for UK businesses and communities as possible. Successive Governments have failed to deliver the benefits to communities. The Cornish Celtic tiger can drive the world-leading deployment of floating offshore wind at commercial scale and sow the seed for a cluster of expertise and experience right across the sector.
15:34:27
Noah Law
St Austell and Newquay
It is a pleasure to serve under your chairmanship, Mr Efford, and to follow my hon. Friend the Member for Camborne and Redruth (Perran Moon), who spoke so lucidly about the challenges we face in building a home-grown supply chain and heeding the lessons of history. I am grateful for the opportunity to speak in this important debate and congratulate my hon. Friend the Member for Truro and Falmouth (Jayne Kirkham) on securing it.
Floating offshore wind represents a truly transformative opportunity for Cornwall and the broader UK—an opportunity to bring jobs to our region while turbocharging the UK’s energy transition. Cornwall’s deep maritime heritage and strategic location uniquely positions us to be at the forefront of the floating offshore wind industry. The Celtic sea’s vast potential for renewable energy production can meet the challenges of deeper water, as my hon. Friend the Member for Mid and South Pembrokeshire (Henry Tufnell) rightly suggested, and those challenges cannot easily be met by our traditional fixed offshore wind industry.
With 4.5 GW of flow capacity envisaged for the region, we can power millions of homes with clean energy while creating around 5,300 jobs and delivering £1.5 billion of gross value added to the local economy, with around a third of that expected to arise in Cornwall, which can play its role in championing the southern side of the Celtic sea.
In Cornwall the opportunity is not abstract: it is very much tangible. With the natural advantages of Falmouth harbour, which we have heard so much about, with its deep-water access and existing maritime infrastructure, Falmouth is truly a flagship location for our floating offshore wind Celtic sea cluster. Its impact will extend far beyond the Truro and Falmouth constituency because, for constituencies like mine—St Austell and Newquay—the ripple effects of job creation, skills development and supply chain growth can be significant.
From the industrial engineering of components to logistical support, floating offshore wind can energise industries that in many cases already exist across the spine of Cornwall. To make the vision a reality we need political leadership and co-ordination. Central Government must work hand in hand, ideally with a devolved Government in Cornwall, with floating offshore wind at the heart of their industrial strategy. They must work with the Crown Estate and developers and educational institutions to address the barriers that hold back the industry. Only through a unified strategic focus can floating offshore wind reach its potential.
Floating offshore wind requires a new generation of skilled workers in maritime engineering, fabrication and supply chain logistics. That is why I will soon meet the Skills Minister to urge Skills England to adopt a long-term perspective on the industry and its development locally. Institutions like Falmouth marine school, as we have heard, and certainly Cornwall college, which is also based in my constituency, are already laying the groundwork, but they need substantial and sustained investment to scale up the training programmes. We must ensure that young people in Cornwall have access to the skills and qualifications necessary to thrive in the sector and share in the great prosperity it can bring to our part of the world.
The scale of investment required is truly substantial. As we have heard, ports like Falmouth need to upgrade to become hubs for assembly operations and maintenance. I am working closely with the national wealth fund to ensure that Cornwall features prominently in its pipeline of prospective investments. We also need the tailored mechanisms we have heard about, such as contracts for difference that account for the higher costs and early-stage challenges of projects in this part of Britain. Without those, developers may turn elsewhere, and Cornwall in particular risks missing out on this once-in-a-generation opportunity.
For Cornwall to realise the full benefits of floating offshore wind, our public infrastructure must be developed alongside it and be up to the task. Improved road, rail and grid connections are essential. We need a freight line down to the Falmouth docks, we need the spine of Cornwall’s infrastructure network to be strong, and we need to ensure that Tamar crossings do not financially disadvantage local residents or businesses or the logistics supply chain associated with the industry. We must ensure the seamless movement of goods and people.
The Crown Estate has a pivotal role in championing the floating offshore wind industry and showcasing Cornwall’s strengths and potential. I welcome its recent decision to award match funding to Blue Abyss, which is in my constituency and is a world-class facility poised to become the centre of innovation for offshore wind energy and maritime technology. It is a really strong signal from the Crown Estate, but there is much more to be done. We need to continue to prioritise local supply chain development and work actively with local stakeholders to ensure that Cornwall’s potential is fully recognised and utilised.
The development of floating offshore wind in the Celtic sea is more than just an energy initiative. It is an economic and social catalyst with the power to revitalise our communities, tackle regional inequalities and cement Britain’s position as a global leader in renewable energy. For Cornwall, it is an opportunity for us to build our maritime heritage and to shape a sustainable future. To achieve this, we need a clear strategy that brings together Government, industry and educational institutions. We need a spatial strategy that works hand in glove with the fishing industry to make sure this is a success for every part of our community, and we need the investment in skills, infrastructure and local supply chains to get this off the ground and to ensure that local people feel the prosperity.
We need to act urgently to secure contracts, funding, investment and confidence to unlock the full potential of FLOW and Cornwall’s role in it. I urge the Government to seize this moment and commit to the co-ordinated action we need to deliver on the promise of floating offshore wind. Together, we can harness the power of the Celtic sea to light our homes, power our industries and create a legacy of sustainable prosperity for Cornwall and beyond.
Floating offshore wind represents a truly transformative opportunity for Cornwall and the broader UK—an opportunity to bring jobs to our region while turbocharging the UK’s energy transition. Cornwall’s deep maritime heritage and strategic location uniquely positions us to be at the forefront of the floating offshore wind industry. The Celtic sea’s vast potential for renewable energy production can meet the challenges of deeper water, as my hon. Friend the Member for Mid and South Pembrokeshire (Henry Tufnell) rightly suggested, and those challenges cannot easily be met by our traditional fixed offshore wind industry.
With 4.5 GW of flow capacity envisaged for the region, we can power millions of homes with clean energy while creating around 5,300 jobs and delivering £1.5 billion of gross value added to the local economy, with around a third of that expected to arise in Cornwall, which can play its role in championing the southern side of the Celtic sea.
In Cornwall the opportunity is not abstract: it is very much tangible. With the natural advantages of Falmouth harbour, which we have heard so much about, with its deep-water access and existing maritime infrastructure, Falmouth is truly a flagship location for our floating offshore wind Celtic sea cluster. Its impact will extend far beyond the Truro and Falmouth constituency because, for constituencies like mine—St Austell and Newquay—the ripple effects of job creation, skills development and supply chain growth can be significant.
From the industrial engineering of components to logistical support, floating offshore wind can energise industries that in many cases already exist across the spine of Cornwall. To make the vision a reality we need political leadership and co-ordination. Central Government must work hand in hand, ideally with a devolved Government in Cornwall, with floating offshore wind at the heart of their industrial strategy. They must work with the Crown Estate and developers and educational institutions to address the barriers that hold back the industry. Only through a unified strategic focus can floating offshore wind reach its potential.
Floating offshore wind requires a new generation of skilled workers in maritime engineering, fabrication and supply chain logistics. That is why I will soon meet the Skills Minister to urge Skills England to adopt a long-term perspective on the industry and its development locally. Institutions like Falmouth marine school, as we have heard, and certainly Cornwall college, which is also based in my constituency, are already laying the groundwork, but they need substantial and sustained investment to scale up the training programmes. We must ensure that young people in Cornwall have access to the skills and qualifications necessary to thrive in the sector and share in the great prosperity it can bring to our part of the world.
The scale of investment required is truly substantial. As we have heard, ports like Falmouth need to upgrade to become hubs for assembly operations and maintenance. I am working closely with the national wealth fund to ensure that Cornwall features prominently in its pipeline of prospective investments. We also need the tailored mechanisms we have heard about, such as contracts for difference that account for the higher costs and early-stage challenges of projects in this part of Britain. Without those, developers may turn elsewhere, and Cornwall in particular risks missing out on this once-in-a-generation opportunity.
For Cornwall to realise the full benefits of floating offshore wind, our public infrastructure must be developed alongside it and be up to the task. Improved road, rail and grid connections are essential. We need a freight line down to the Falmouth docks, we need the spine of Cornwall’s infrastructure network to be strong, and we need to ensure that Tamar crossings do not financially disadvantage local residents or businesses or the logistics supply chain associated with the industry. We must ensure the seamless movement of goods and people.
The Crown Estate has a pivotal role in championing the floating offshore wind industry and showcasing Cornwall’s strengths and potential. I welcome its recent decision to award match funding to Blue Abyss, which is in my constituency and is a world-class facility poised to become the centre of innovation for offshore wind energy and maritime technology. It is a really strong signal from the Crown Estate, but there is much more to be done. We need to continue to prioritise local supply chain development and work actively with local stakeholders to ensure that Cornwall’s potential is fully recognised and utilised.
The development of floating offshore wind in the Celtic sea is more than just an energy initiative. It is an economic and social catalyst with the power to revitalise our communities, tackle regional inequalities and cement Britain’s position as a global leader in renewable energy. For Cornwall, it is an opportunity for us to build our maritime heritage and to shape a sustainable future. To achieve this, we need a clear strategy that brings together Government, industry and educational institutions. We need a spatial strategy that works hand in glove with the fishing industry to make sure this is a success for every part of our community, and we need the investment in skills, infrastructure and local supply chains to get this off the ground and to ensure that local people feel the prosperity.
We need to act urgently to secure contracts, funding, investment and confidence to unlock the full potential of FLOW and Cornwall’s role in it. I urge the Government to seize this moment and commit to the co-ordinated action we need to deliver on the promise of floating offshore wind. Together, we can harness the power of the Celtic sea to light our homes, power our industries and create a legacy of sustainable prosperity for Cornwall and beyond.
15:46:39
Ben Maguire
North Cornwall
It is a pleasure to serve under your chairship, Mr Efford. I thank the hon. Member for Truro and Falmouth (Jayne Kirkham) for securing this important debate and for championing our fantastic Duchy of Cornwall as a green investment hub.
Offshore wind in the Celtic sea represents a huge opportunity to support the UK’s energy transition. The Liberal Democrats welcome with open arms any Government plans to invest in the sector. Not only will the turbines in the Celtic sea bring renewable energy to more than 4 million homes, but they will help to limit our dependence on fossil fuels, create jobs right across the south-west and stimulate much-needed economic growth in our coastal areas. These areas, and the offshore wind sector as a whole, were completely abandoned by the previous Conservative Government, and I am glad to see such an important industry finally getting the recognition it deserves.
The hon. Member for Truro and Falmouth rightly talked about the need for the Government to reach carbon reduction goals; obviously, the project in the Celtic sea is vital to that objective. She also emphasised the five-year minimum lead time for investment, which highlights the urgency of this issue.
The hon. Member for Mid and South Pembrokeshire (Henry Tufnell) talked about keeping young people in his constituency in highly skilled jobs. That has been highlighted by other Cornish Members and, as a Member representing a Cornish constituency, I think that is so crucial. This project is such an enormous opportunity to do just that. The hon. Gentleman also alluded the Crown Estate’s stifling competition, which I will come to later.
The hon. Member for Camborne, Redruth and Hayle (Perran Moon) rightly pointed out that in projects of this nature the majority of turbine parts are imported from Europe. We clearly need to see a much greater volume of manufacturing here in the UK.
The hon. Member for St Austell and Newquay (Noah Law) talked about Cornwall’s deep maritime heritage. Like other Cornish Members, he championed the deep-water port of Falmouth. He also alluded to the need for a devolved Government in Cornwall to fully unleash the duchy’s green energy revolution. He also talked about transport infrastructure investment, citing it as an essential precursor to this revolution.
It would be remiss of me not to point out that when the Liberal Democrats ran the Department for Energy and Climate Change, we quadrupled the amount of energy generated from renewables. We recognise that the offshore wind industry can, and will, play a vital role in reducing our carbon emissions and hitting net zero targets, not to mention the benefits of increasing our energy security in this country, thus reducing our dependence on fossil fuels from Putin and other foreign despots.
Offshore wind in the Celtic sea in particular has the vast potential of becoming a powerhouse in renewable energy generation and will help to propel this country to the place of a world leader in the industry. However, we believe that much greater investment is needed in skills and training to prepare local supply chains and enable these communities to play a key role in the global build-out of floating offshore wind.
Some concerns have also been raised with me about the role of the Crown Estate, which have also been referred to by other hon. Members. The Crown Estate appears to have determined cheaper and lower-risk deep fixed foundation designs, and has been excluded from the licence bids. That, of course, narrows the pool of bidders quite significantly, whereas the key objective should be delivery. The priority should be to issue licences that can be brought into production as soon as possible to drive down the UK’s carbon emissions. Therefore, issuing licences that require projects 30 times the size of the UK’s largest operational project feels like a risky leap, and could struggle to attract investment, as well as competition between bidders. It is also important to consult and work alongside groups such as the Cornish Fish Producers’ Organisation when considering a project at that scale, being careful not to impinge on the livelihoods of Cornish fishermen. Those groups are not inherently anti-offshore wind, but they urge, in their words, “sense and balance” when planning offshore developments.
As Liberal Democrats, we always emphasise the need for public engagement to ensure that communities are involved and engaged throughout the process.
Offshore wind in the Celtic sea represents a huge opportunity to support the UK’s energy transition. The Liberal Democrats welcome with open arms any Government plans to invest in the sector. Not only will the turbines in the Celtic sea bring renewable energy to more than 4 million homes, but they will help to limit our dependence on fossil fuels, create jobs right across the south-west and stimulate much-needed economic growth in our coastal areas. These areas, and the offshore wind sector as a whole, were completely abandoned by the previous Conservative Government, and I am glad to see such an important industry finally getting the recognition it deserves.
The hon. Member for Truro and Falmouth rightly talked about the need for the Government to reach carbon reduction goals; obviously, the project in the Celtic sea is vital to that objective. She also emphasised the five-year minimum lead time for investment, which highlights the urgency of this issue.
The hon. Member for Mid and South Pembrokeshire (Henry Tufnell) talked about keeping young people in his constituency in highly skilled jobs. That has been highlighted by other Cornish Members and, as a Member representing a Cornish constituency, I think that is so crucial. This project is such an enormous opportunity to do just that. The hon. Gentleman also alluded the Crown Estate’s stifling competition, which I will come to later.
The hon. Member for Camborne, Redruth and Hayle (Perran Moon) rightly pointed out that in projects of this nature the majority of turbine parts are imported from Europe. We clearly need to see a much greater volume of manufacturing here in the UK.
The hon. Member for St Austell and Newquay (Noah Law) talked about Cornwall’s deep maritime heritage. Like other Cornish Members, he championed the deep-water port of Falmouth. He also alluded to the need for a devolved Government in Cornwall to fully unleash the duchy’s green energy revolution. He also talked about transport infrastructure investment, citing it as an essential precursor to this revolution.
It would be remiss of me not to point out that when the Liberal Democrats ran the Department for Energy and Climate Change, we quadrupled the amount of energy generated from renewables. We recognise that the offshore wind industry can, and will, play a vital role in reducing our carbon emissions and hitting net zero targets, not to mention the benefits of increasing our energy security in this country, thus reducing our dependence on fossil fuels from Putin and other foreign despots.
Offshore wind in the Celtic sea in particular has the vast potential of becoming a powerhouse in renewable energy generation and will help to propel this country to the place of a world leader in the industry. However, we believe that much greater investment is needed in skills and training to prepare local supply chains and enable these communities to play a key role in the global build-out of floating offshore wind.
Some concerns have also been raised with me about the role of the Crown Estate, which have also been referred to by other hon. Members. The Crown Estate appears to have determined cheaper and lower-risk deep fixed foundation designs, and has been excluded from the licence bids. That, of course, narrows the pool of bidders quite significantly, whereas the key objective should be delivery. The priority should be to issue licences that can be brought into production as soon as possible to drive down the UK’s carbon emissions. Therefore, issuing licences that require projects 30 times the size of the UK’s largest operational project feels like a risky leap, and could struggle to attract investment, as well as competition between bidders. It is also important to consult and work alongside groups such as the Cornish Fish Producers’ Organisation when considering a project at that scale, being careful not to impinge on the livelihoods of Cornish fishermen. Those groups are not inherently anti-offshore wind, but they urge, in their words, “sense and balance” when planning offshore developments.
As Liberal Democrats, we always emphasise the need for public engagement to ensure that communities are involved and engaged throughout the process.
15:47:24
Katie Lam
Weald of Kent
It is a pleasure to serve under your chairmanship, Mr Efford. I thank the hon. Member for Truro and Falmouth (Jayne Kirkham). This is an important subject, successfully championed by the last Conservative Government, and I am glad of the chance to discuss it today. The hon. Lady’s passion and ambition for her seat, and for all of Cornwall, are clear and do her great credit. These are complex issues involving major projects, long supply chains, and many public and private sector groups, which she has clearly taken a lot of time to understand. I am sure the Minister will be grateful for her suggestions. Her points, especially on the need for co-ordination between public and private investment, and bringing in planning and skills, are well made.
The hon. Member for Mid and South Pembrokeshire (Henry Tufnell) outlined the size of the opportunity. Floating offshore wind is a substantial potential prize, not just for the climate but for Britain’s reindustrialisation. I am sure his all-party parliamentary group for the Celtic sea much appreciates his contribution—as is the case, I am sure, for the hon. Member for Truro and Falmouth. I look forward to seeing those anchors from Pembrokeshire and they are lucky to have him to champion them.
The hon. Member for Camborne and Redruth (Perran Moon) is another committed advocate for the great county of Cornwall and the fantastic economic potential of south-west England and, of course, south Wales. He is right that workforce development must be strategic, coherent and long term, and I was fascinated to hear of the outstanding university and college courses available, including in his own constituency—a “Cornish Celtic tiger” indeed.
The hon. Member for St Austell and Newquay (Noah Law) also discussed skills, and I hope his upcoming meeting with the Skills Minister is as fruitful as he hopes it will be. His constituents, I am sure, will be very pleased to hear of all he is doing to stand up for the infrastructure his area needs, as well as for the exciting supply chain and marine technology leadership that he describes.
I was a little surprised to hear the view of the hon. Member for North Cornwall (Ben Maguire) that the area was neglected by the last Government. Successive Conservative Governments took renewable electricity generation from just 7% in 2010 to over half by the second quarter of this year. We made the UK the global leader in offshore wind, with more capacity installed than any other country, powering more than 7.5 million homes.
The last Conservative Government committed a £1 billion investment to green industries through the green industries growth accelerator, aimed at advancing technologies such as offshore wind. The investment aimed to leverage up to £90 billion over a decade. Will the Minister please update us on how much of that has been spent since the Labour Government took office, and how much is being directed to floating offshore wind?
This debate is, of course, about the Celtic sea, but I am conscious that in the North sea, the Chinese company Ming Yang Wind Power Group is poised to construct hundreds of floating wind turbines, if that is approved by the SNP. Ming Yang benefits from massive state subsidies in China. Will the Minister please assure us that, be it in the North sea, the Celtic sea or anywhere else, he will not allow any wind turbines to be built and controlled by hostile states, undermining both market fairness and our national security, in any of Britain’s waters?
The previous Government set up the floating offshore wind manufacturing investment scheme, investing £160 million in two ports. One of these was Port Talbot, which is well placed to serve Celtic sea floating offshore wind. The investment was welcomed for supporting job creation in south Wales and the wider UK supply chain. The Crown Estate later set out its plans for a new generation of floating wind farms in the Celtic sea, with the potential to power a further 4 million homes. Will the Minister please assure us that this exciting project, and the investment secured under the last Government, will not get lost in the cost and bureaucracy of setting up GB Energy? Will he outline the impact on energy bills of the higher strike price put into auction round 5 by this Government and recommit to the Government’s manifesto promise to lower energy bills by £300? This Government inherited global leadership in offshore wind, which is something I am sure we can all be proud of. The Celtic sea presents a fantastic opportunity to build on that record.
The hon. Member for Mid and South Pembrokeshire (Henry Tufnell) outlined the size of the opportunity. Floating offshore wind is a substantial potential prize, not just for the climate but for Britain’s reindustrialisation. I am sure his all-party parliamentary group for the Celtic sea much appreciates his contribution—as is the case, I am sure, for the hon. Member for Truro and Falmouth. I look forward to seeing those anchors from Pembrokeshire and they are lucky to have him to champion them.
The hon. Member for Camborne and Redruth (Perran Moon) is another committed advocate for the great county of Cornwall and the fantastic economic potential of south-west England and, of course, south Wales. He is right that workforce development must be strategic, coherent and long term, and I was fascinated to hear of the outstanding university and college courses available, including in his own constituency—a “Cornish Celtic tiger” indeed.
The hon. Member for St Austell and Newquay (Noah Law) also discussed skills, and I hope his upcoming meeting with the Skills Minister is as fruitful as he hopes it will be. His constituents, I am sure, will be very pleased to hear of all he is doing to stand up for the infrastructure his area needs, as well as for the exciting supply chain and marine technology leadership that he describes.
I was a little surprised to hear the view of the hon. Member for North Cornwall (Ben Maguire) that the area was neglected by the last Government. Successive Conservative Governments took renewable electricity generation from just 7% in 2010 to over half by the second quarter of this year. We made the UK the global leader in offshore wind, with more capacity installed than any other country, powering more than 7.5 million homes.
The last Conservative Government committed a £1 billion investment to green industries through the green industries growth accelerator, aimed at advancing technologies such as offshore wind. The investment aimed to leverage up to £90 billion over a decade. Will the Minister please update us on how much of that has been spent since the Labour Government took office, and how much is being directed to floating offshore wind?
This debate is, of course, about the Celtic sea, but I am conscious that in the North sea, the Chinese company Ming Yang Wind Power Group is poised to construct hundreds of floating wind turbines, if that is approved by the SNP. Ming Yang benefits from massive state subsidies in China. Will the Minister please assure us that, be it in the North sea, the Celtic sea or anywhere else, he will not allow any wind turbines to be built and controlled by hostile states, undermining both market fairness and our national security, in any of Britain’s waters?
The previous Government set up the floating offshore wind manufacturing investment scheme, investing £160 million in two ports. One of these was Port Talbot, which is well placed to serve Celtic sea floating offshore wind. The investment was welcomed for supporting job creation in south Wales and the wider UK supply chain. The Crown Estate later set out its plans for a new generation of floating wind farms in the Celtic sea, with the potential to power a further 4 million homes. Will the Minister please assure us that this exciting project, and the investment secured under the last Government, will not get lost in the cost and bureaucracy of setting up GB Energy? Will he outline the impact on energy bills of the higher strike price put into auction round 5 by this Government and recommit to the Government’s manifesto promise to lower energy bills by £300? This Government inherited global leadership in offshore wind, which is something I am sure we can all be proud of. The Celtic sea presents a fantastic opportunity to build on that record.
15:50:52
Michael Shanks
The Parliamentary Under-Secretary of State for Energy Security and Net Zero
It is a pleasure to serve under your chairmanship this afternoon, Mr Efford. I congratulate my hon. Friend the Member for Truro and Falmouth (Jayne Kirkham) on securing this debate and for all the work she does in championing her area, and the Celtic sea more broadly. We have had a number of conversations and debates on energy-related policy and she is a real champion for her constituency.
I thank all hon. Members this afternoon for their passionate contributions to the debate. I do not know what the collective noun is for a group of Cornish Celtic tigers and one Welsh one, but they made fantastic contributions and I think that gives us a sense of how seriously new MPs are taking the future of their constituencies. We should be proud of that.
The key issues that have been raised today, of the grid, supply chains, skills, planning, and getting the balance right so that we bring communities along with us in much of this—the hon. Member for North Cornwall (Ben Maguire) put that well—are important. It was nice to hear the hon. Gentleman speak about the coalition Government, as we do not hear enough about them these days. I encourage him to say much more about them in future debates, but I suspect that he will not.
Let me first speak about the context of the debate and I will then answer some of the specific questions. I think the “why” of our being in this race and transition is important. Why are we pushing to deliver clean power by 2030? The truth is that it is an imperative if we are going to meet our long-term goal of a net zero economy and deliver economic growth and energy security. They are intrinsically linked.
A number of hon. Members have raised the point about the potential of jobs in industry in communities that have, in many cases, been forgotten for a long time. The rates of poverty and underemployment in those communities underlines how important it is that we bring about new opportunities. I think the point about legacy raised by my hon. Friend the Member for Mid and South Pembrokeshire (Henry Tufnell). This is not just a transition for the sake of a transition; the aim is to deliver good, well-paid jobs for future generations and to make it a prosperous transition for many communities.
We are in no way missing the scale of the challenge. Delivering clean power by 2030 will require us to rip up the rule book on how Governments deliver big projects and to take a radically different approach to how we deliver change at pace. It means working in lockstep with communities and with the private sector to rapidly address the barriers that hold us back, which have all been raised today, so that we can deliver unprecedented levels of new clean energy infrastructure.
The Government received the National Energy System Operator’s advice on achieving a clean power system by 2030. It shows that this is not only achievable, but can create a cheaper, more secure system. The advice will inform the Government’s clean power 2030 action plan, which will be published imminently and will set out our route to decarbonising the electricity grid with the aims of protecting billpayers from volatile gas prices, strengthening Britain’s energy security and accelerating us towards net zero.
I hope all hon. Members will agree that we are on the cusp of a once-in-a-generation transformation of our energy system, led by a Government that is determined not to be a passenger on the big questions of the day, but, as my hon. Friend the Member for Camborne and Redruth (Perran Moon) put it, to drive forward radical change. The infrastructure that we deploy now and in the years ahead will set in train decades of energy security, stability, and prosperity for every part of the UK. Key to that will be the role played by offshore wind and, in particular, floating offshore wind. I will focus on that in the rest of my remarks.
Offshore wind will play a crucial role in our mission to make Britain a clean energy superpower and deliver clean power by 2030. At 14.8 GW of generation, we have the highest deployment in Europe and the second highest in the world. As my hon. Friend the Member for Camborne and Redruth said so eloquently, the UK is a global leader. These days there are not many things in which we can still have a claim to be that, but this is one that we must ensure we maintain.
The new technology unlocks deeper areas of the seabed that can benefit from stronger and more consistent winds, helping us to secure our energy supply and to deliver on our statutory decarbonisation obligations. Our floating offshore capacity is second only to Norway. At around 25 GW, we have the largest pipeline of floating offshore projects anywhere in the world. Of course, in the Celtic sea, there is enormous potential for floating offshore wind, and we are determined to take advantage of the opportunities that that represents. Earlier this year, the floating offshore wind taskforce estimated that floating offshore wind could contribute £47 billion in GVA to the UK economy by 2050 and support up to 97,000 jobs across the country, so we are hard at work, right across Government and in the private sector, to make sure that we realise the vast potential of this opportunity.
The test and demonstration projects, which a number of hon. Members have rightly raised, total 432 MW of capacity in development in the Celtic sea. They are crucial not just for the capacity that they generate, but for helping us to understand the supply chains and the development and for building the skills in the future. We want to see many of these projects succeed, and Government are doing everything we can to support the projects.
Under the offshore wind leasing round that the Crown Estate recently launched, a further 4.5 GW of floating wind capacity in the region will have an impact of up to 5,300 new jobs and a £1.4 billion boost to the economy. We are determined that by working together with the Crown Estate on an innovative approach to this leasing round, we can ensure that there is new industry that provides social and economic opportunities for communities right across the country. It is important for us to say that this is this Government’s absolutely key priority, that we are not agnostic on the industrial future of this country and that we want to see the good, well-paid jobs here as well. My hon. Friend the Member for Camborne and Redruth rightly highlighted the example of Kincardine, and there are other projects where all the parts were manufactured abroad and towed into our waters simply to start generating. That is the part of this that we do not want to see again. We want to see the good, well-paid jobs here.
That is why the Crown Estate has launched a £50 million supply chain accelerator to fund and accelerate supply chain projects. The 13 successful organisations are set to receive funding in the initial round. Just yesterday we were able to announce more details on these. It is the case that £5 million of funding was awarded to kick-start a range of projects across Great Britain, contributing to a combined development investment of more than £9 million, with £400 million of capital investment. As has been mentioned, the partnership that Great British Energy, the first publicly owned energy company in 70 years, has with the Crown Estate is about trying to drive forward even more of those opportunities right across the country.
The issue of ports has been mentioned by a number of hon. Members. They clearly will play a vital role in the deployment and maintenance of offshore wind infrastructure. Up to £4 billion of investment is required by 2040 to support the roll-out of floating offshore wind. That is why the FLOWMIS scheme, which is providing grant funding to support the development of port infrastructure, is so important.
The shadow spokesperson, the hon. Member for Weald of Kent (Katie Lam), rightly referenced the importance of Port Talbot and the port of Cromarty Firth in the FLOWMIS scheme. We are moving forward due diligence on that as quickly as possible. It is one of a number of in-progress decisions that we inherited from the previous Government, on which we are moving as quickly as possible to actually deliver, so that the funding can be put to good use as quickly as possible. It goes hand in hand with the creation of the national wealth fund, which will invest at least £5.8 billion of capital in the five sectors announced in our manifesto, including port infrastructure. That comes alongside some of the work already being done by the NWF in Ardersier port, the port of Tyne and Teesworks. To understand the barriers to port infrastructure, we are working closely with the ports task and finish group, led by RenewableUK, to ensure that we are building on the work that has already been done.
On the wider point of working together, which my hon. Friend the Member for Truro and Falmouth raised earlier, DESNZ has a standing invitation to the Cornwall FLOW Commission, which Cornwall council is involved in. Officials regularly engage with all councils, including Cornwall council, on this and many other issues, and we are very happy to do more.
Let me turn, finally, to the point about industry. In the spring, we will publish the Government’s industrial strategy, which is our commitment to ensuring that good, well-paid and trade-unionised jobs come to these shores to deliver the energy transition as well as to a number of other sectors. Most recently, we announced the clean industry bonus as part of the CfD scheme, which rewards fixed and floating offshore wind developers that choose to invest in the UK’s poorest communities or in cleaner manufacturing facilities. A portion of that budget is ringfenced for floating offshore wind components.
On the broader points that hon. Members raised about the next contracts for difference rounds, we will say more about auction round 7 in due course. Clearly, it is important to recognise how much the industry has moved since the abject failure under the previous Government in auction round 5, in which much of the sector was flat on its back. We have moved as quickly as possible on AR6 to get projects over the line. We want to see more of these projects succeed, and we will have more to say imminently on AR7. There will also be a consultation on that process.
I once again thank my hon. Friend the Member for Truro and Falmouth for bringing forward this debate, and I thank all hon. Members for their contributions and their real commitment to this issue. This is a Government who are determined to ensure that we realise our potential in communities right across this country and drive towards clean power by 2030. That is not as an end in itself, but because it will make energy in Britain cleaner, cheaper and more secure for our entire nation, reinvigorate long-neglected supply chains in clean energy and engineering, and return a sense of pride and prosperity to all parts of this country.
The road ahead will be challenging—no one comes into government just to tackle the easy stuff—but we are determined that together we will ensure that we achieve the most difficult task of all: by 2030, we will have a secure, cleaner energy system. The prize at the end is worth all that effort, and there is no point being in government if we are not going to tackle some of the long-term, difficult challenges. I once again thank hon. Members for participating in this debate and encourage them to keep up the challenge to Government as we ensure that we realise every single opportunity available to us in this most important sector.
I thank all hon. Members this afternoon for their passionate contributions to the debate. I do not know what the collective noun is for a group of Cornish Celtic tigers and one Welsh one, but they made fantastic contributions and I think that gives us a sense of how seriously new MPs are taking the future of their constituencies. We should be proud of that.
The key issues that have been raised today, of the grid, supply chains, skills, planning, and getting the balance right so that we bring communities along with us in much of this—the hon. Member for North Cornwall (Ben Maguire) put that well—are important. It was nice to hear the hon. Gentleman speak about the coalition Government, as we do not hear enough about them these days. I encourage him to say much more about them in future debates, but I suspect that he will not.
Let me first speak about the context of the debate and I will then answer some of the specific questions. I think the “why” of our being in this race and transition is important. Why are we pushing to deliver clean power by 2030? The truth is that it is an imperative if we are going to meet our long-term goal of a net zero economy and deliver economic growth and energy security. They are intrinsically linked.
A number of hon. Members have raised the point about the potential of jobs in industry in communities that have, in many cases, been forgotten for a long time. The rates of poverty and underemployment in those communities underlines how important it is that we bring about new opportunities. I think the point about legacy raised by my hon. Friend the Member for Mid and South Pembrokeshire (Henry Tufnell). This is not just a transition for the sake of a transition; the aim is to deliver good, well-paid jobs for future generations and to make it a prosperous transition for many communities.
We are in no way missing the scale of the challenge. Delivering clean power by 2030 will require us to rip up the rule book on how Governments deliver big projects and to take a radically different approach to how we deliver change at pace. It means working in lockstep with communities and with the private sector to rapidly address the barriers that hold us back, which have all been raised today, so that we can deliver unprecedented levels of new clean energy infrastructure.
The Government received the National Energy System Operator’s advice on achieving a clean power system by 2030. It shows that this is not only achievable, but can create a cheaper, more secure system. The advice will inform the Government’s clean power 2030 action plan, which will be published imminently and will set out our route to decarbonising the electricity grid with the aims of protecting billpayers from volatile gas prices, strengthening Britain’s energy security and accelerating us towards net zero.
I hope all hon. Members will agree that we are on the cusp of a once-in-a-generation transformation of our energy system, led by a Government that is determined not to be a passenger on the big questions of the day, but, as my hon. Friend the Member for Camborne and Redruth (Perran Moon) put it, to drive forward radical change. The infrastructure that we deploy now and in the years ahead will set in train decades of energy security, stability, and prosperity for every part of the UK. Key to that will be the role played by offshore wind and, in particular, floating offshore wind. I will focus on that in the rest of my remarks.
Offshore wind will play a crucial role in our mission to make Britain a clean energy superpower and deliver clean power by 2030. At 14.8 GW of generation, we have the highest deployment in Europe and the second highest in the world. As my hon. Friend the Member for Camborne and Redruth said so eloquently, the UK is a global leader. These days there are not many things in which we can still have a claim to be that, but this is one that we must ensure we maintain.
The new technology unlocks deeper areas of the seabed that can benefit from stronger and more consistent winds, helping us to secure our energy supply and to deliver on our statutory decarbonisation obligations. Our floating offshore capacity is second only to Norway. At around 25 GW, we have the largest pipeline of floating offshore projects anywhere in the world. Of course, in the Celtic sea, there is enormous potential for floating offshore wind, and we are determined to take advantage of the opportunities that that represents. Earlier this year, the floating offshore wind taskforce estimated that floating offshore wind could contribute £47 billion in GVA to the UK economy by 2050 and support up to 97,000 jobs across the country, so we are hard at work, right across Government and in the private sector, to make sure that we realise the vast potential of this opportunity.
The test and demonstration projects, which a number of hon. Members have rightly raised, total 432 MW of capacity in development in the Celtic sea. They are crucial not just for the capacity that they generate, but for helping us to understand the supply chains and the development and for building the skills in the future. We want to see many of these projects succeed, and Government are doing everything we can to support the projects.
Under the offshore wind leasing round that the Crown Estate recently launched, a further 4.5 GW of floating wind capacity in the region will have an impact of up to 5,300 new jobs and a £1.4 billion boost to the economy. We are determined that by working together with the Crown Estate on an innovative approach to this leasing round, we can ensure that there is new industry that provides social and economic opportunities for communities right across the country. It is important for us to say that this is this Government’s absolutely key priority, that we are not agnostic on the industrial future of this country and that we want to see the good, well-paid jobs here as well. My hon. Friend the Member for Camborne and Redruth rightly highlighted the example of Kincardine, and there are other projects where all the parts were manufactured abroad and towed into our waters simply to start generating. That is the part of this that we do not want to see again. We want to see the good, well-paid jobs here.
That is why the Crown Estate has launched a £50 million supply chain accelerator to fund and accelerate supply chain projects. The 13 successful organisations are set to receive funding in the initial round. Just yesterday we were able to announce more details on these. It is the case that £5 million of funding was awarded to kick-start a range of projects across Great Britain, contributing to a combined development investment of more than £9 million, with £400 million of capital investment. As has been mentioned, the partnership that Great British Energy, the first publicly owned energy company in 70 years, has with the Crown Estate is about trying to drive forward even more of those opportunities right across the country.
The issue of ports has been mentioned by a number of hon. Members. They clearly will play a vital role in the deployment and maintenance of offshore wind infrastructure. Up to £4 billion of investment is required by 2040 to support the roll-out of floating offshore wind. That is why the FLOWMIS scheme, which is providing grant funding to support the development of port infrastructure, is so important.
The shadow spokesperson, the hon. Member for Weald of Kent (Katie Lam), rightly referenced the importance of Port Talbot and the port of Cromarty Firth in the FLOWMIS scheme. We are moving forward due diligence on that as quickly as possible. It is one of a number of in-progress decisions that we inherited from the previous Government, on which we are moving as quickly as possible to actually deliver, so that the funding can be put to good use as quickly as possible. It goes hand in hand with the creation of the national wealth fund, which will invest at least £5.8 billion of capital in the five sectors announced in our manifesto, including port infrastructure. That comes alongside some of the work already being done by the NWF in Ardersier port, the port of Tyne and Teesworks. To understand the barriers to port infrastructure, we are working closely with the ports task and finish group, led by RenewableUK, to ensure that we are building on the work that has already been done.
On the wider point of working together, which my hon. Friend the Member for Truro and Falmouth raised earlier, DESNZ has a standing invitation to the Cornwall FLOW Commission, which Cornwall council is involved in. Officials regularly engage with all councils, including Cornwall council, on this and many other issues, and we are very happy to do more.
Let me turn, finally, to the point about industry. In the spring, we will publish the Government’s industrial strategy, which is our commitment to ensuring that good, well-paid and trade-unionised jobs come to these shores to deliver the energy transition as well as to a number of other sectors. Most recently, we announced the clean industry bonus as part of the CfD scheme, which rewards fixed and floating offshore wind developers that choose to invest in the UK’s poorest communities or in cleaner manufacturing facilities. A portion of that budget is ringfenced for floating offshore wind components.
On the broader points that hon. Members raised about the next contracts for difference rounds, we will say more about auction round 7 in due course. Clearly, it is important to recognise how much the industry has moved since the abject failure under the previous Government in auction round 5, in which much of the sector was flat on its back. We have moved as quickly as possible on AR6 to get projects over the line. We want to see more of these projects succeed, and we will have more to say imminently on AR7. There will also be a consultation on that process.
I once again thank my hon. Friend the Member for Truro and Falmouth for bringing forward this debate, and I thank all hon. Members for their contributions and their real commitment to this issue. This is a Government who are determined to ensure that we realise our potential in communities right across this country and drive towards clean power by 2030. That is not as an end in itself, but because it will make energy in Britain cleaner, cheaper and more secure for our entire nation, reinvigorate long-neglected supply chains in clean energy and engineering, and return a sense of pride and prosperity to all parts of this country.
The road ahead will be challenging—no one comes into government just to tackle the easy stuff—but we are determined that together we will ensure that we achieve the most difficult task of all: by 2030, we will have a secure, cleaner energy system. The prize at the end is worth all that effort, and there is no point being in government if we are not going to tackle some of the long-term, difficult challenges. I once again thank hon. Members for participating in this debate and encourage them to keep up the challenge to Government as we ensure that we realise every single opportunity available to us in this most important sector.
16:02:48
in the Chair
Clive Efford
We have 27 minutes remaining, but this is not an invitation to make a 27-minute speech. The hon. Member for Truro and Falmouth (Jayne Kirkham) should take a few minutes to emphasise the key points that she wants to take away from the debate.
16:03:52
Jayne Kirkham
Thank you, Mr Efford; I certainly will not take 27 minutes. I thank the Minister and everybody who has come to this debate. I can tell by the passion how much we want this for the region, as has been set out by so many Members. We have some really deprived, post-industrial areas where we are, and, particularly in Cornwall, they have been post-industrial for a lot longer than other places. We could be a renewable gold mine. If we look at critical minerals, there is so much potential in Cornwall. It has become so desperately important that we start to realise some of those benefits, and there is enough for the whole of the region, for the south-west and for Wales. It is really important to note that this is a huge project.
My hon. Friend the Member for Mid and South Pembrokeshire (Henry Tufnell) and I have taken over the APPG for the Celtic sea from the previous Member for North Devon and my predecessor in Truro and Falmouth, who did a lot of good work on it. It is brilliant to be able to take that work forward as fast as we can. The social value of this will be huge. I will emphasise again and again how important it is that we get there with the jobs and the supply chain and in bringing in some of that fabrication, if we can, such as the manufacturing, the operations and the maintenance, so that we do not have to tow things across the sea.
The clean industry bonus that the Minister spoke about is brilliant, but I want to emphasise how important the contracts for difference will be. They can be used and ringfenced to try to push forward some of the test and demo models; we will have the capacity to do that, if they are used properly to take forward the stepping stone projects. I was really pleased to hear what he said about ports. Our ports are ready to build, for so many reasons; floating offshore wind is one of them, but there are many others. The port task and finish group will be so important, as will having national and regional strategies for how our ports will work together.
On the supply chain and the workforce, I want to emphasise again the possibility of using contract clauses in the auction rounds. We are able to do that, despite World Trade Organisation rules, and perhaps we should think again about the option fees and how they could be ploughed back into areas to build the supply chain and stimulate local operations, assembly and fabrication.
I am very pleased to hear about the discussions with NESO and GB Energy, because the grid has been holding back so many projects across the country. It seems that those projects have been put in chronological order, rather than order of merit or importance. It is good that NESO is looking again at that. A completion date of 2037 for one of the projects was just crazy—we cannot be doing that. It has to change.
To finish—I certainly have not gone on for 27 minutes—I will say that we really need a unified strategy. The hon. Member for North Cornwall (Ben Maguire) was right about bringing people with us, including our fishers and environmentalists. There is huge space in the ocean for all of this to be done successfully, but it really needs championing and leading.
I accept the point about how politically dispersed we are in the south-west compared with regions such as Scotland, which has a national Government who can work with the UK Government. We do not have that in the south-west; we have councils and we have Wales, which is a devolved nation. It is harder to put everything together in one place, and various organisations, such as Celtic Sea Power and the new Cornwall FLOW Commission, are starting to do that, but leadership will be so crucial as we move forward. Finding out where that will come from—whether it is national leadership or regional leadership—will be a very important function of what we do going forward.
I thank you for your time, Mr Efford, and I thank all hon. Members for participating in today’s debate.
Question put and agreed to.
Resolved,
That this House has considered floating offshore wind in the Celtic Sea.
My hon. Friend the Member for Mid and South Pembrokeshire (Henry Tufnell) and I have taken over the APPG for the Celtic sea from the previous Member for North Devon and my predecessor in Truro and Falmouth, who did a lot of good work on it. It is brilliant to be able to take that work forward as fast as we can. The social value of this will be huge. I will emphasise again and again how important it is that we get there with the jobs and the supply chain and in bringing in some of that fabrication, if we can, such as the manufacturing, the operations and the maintenance, so that we do not have to tow things across the sea.
The clean industry bonus that the Minister spoke about is brilliant, but I want to emphasise how important the contracts for difference will be. They can be used and ringfenced to try to push forward some of the test and demo models; we will have the capacity to do that, if they are used properly to take forward the stepping stone projects. I was really pleased to hear what he said about ports. Our ports are ready to build, for so many reasons; floating offshore wind is one of them, but there are many others. The port task and finish group will be so important, as will having national and regional strategies for how our ports will work together.
On the supply chain and the workforce, I want to emphasise again the possibility of using contract clauses in the auction rounds. We are able to do that, despite World Trade Organisation rules, and perhaps we should think again about the option fees and how they could be ploughed back into areas to build the supply chain and stimulate local operations, assembly and fabrication.
I am very pleased to hear about the discussions with NESO and GB Energy, because the grid has been holding back so many projects across the country. It seems that those projects have been put in chronological order, rather than order of merit or importance. It is good that NESO is looking again at that. A completion date of 2037 for one of the projects was just crazy—we cannot be doing that. It has to change.
To finish—I certainly have not gone on for 27 minutes—I will say that we really need a unified strategy. The hon. Member for North Cornwall (Ben Maguire) was right about bringing people with us, including our fishers and environmentalists. There is huge space in the ocean for all of this to be done successfully, but it really needs championing and leading.
I accept the point about how politically dispersed we are in the south-west compared with regions such as Scotland, which has a national Government who can work with the UK Government. We do not have that in the south-west; we have councils and we have Wales, which is a devolved nation. It is harder to put everything together in one place, and various organisations, such as Celtic Sea Power and the new Cornwall FLOW Commission, are starting to do that, but leadership will be so crucial as we move forward. Finding out where that will come from—whether it is national leadership or regional leadership—will be a very important function of what we do going forward.
I thank you for your time, Mr Efford, and I thank all hon. Members for participating in today’s debate.
Question put and agreed to.
Resolved,
That this House has considered floating offshore wind in the Celtic Sea.
Sitting adjourned.
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