Is it about time we talk about money?

Is it about time we bluntly talk about money? Is the UK govt clicking it's heels 3 times and wishing "there's no place like home", hoping that the Inflation Reduction Act (or 'eera' as they say in the EU!) and the EU's response just goes away and does not mean that the playing field has fundamentally changed everything?

Maritime UK published it's Offshore Wind Plan report this week. ABL Group, as the leading independent #marine and #energy consultant, we welcome this contribution.?

As we look ahead at the UK's #offshorewind ambition (aspiration? Wish? Hope...?) of 50GW by 2030 and 100GW by 2050, the development of a suitable/appropriate local supply chain is now not just a good economic outcome, it is vital due to the supply chain bottlenecks that will occur as Europe and elsewhere also ramp up ambitions for 2030 and beyond.?

Some of the recommendations in the report are:

? Creating quality career pathways for young people

? Rewarding higher UK supply chain content in offshore wind projects (back to this in a minute)

? Reforming the planning system to enable green projects to be delivered quicker

? Changing local content methodologies to support more UK shipbuilding

? Encouraging lenders and investors to finance infrastructure and vessels and making it easier to do so in the UK

All sensible 'asks'.?But again I ask, is it time to talk about money?

I think we missed an opportunity in the AR6 consultation.

We need to support developers in their ambition to increase local content. All developers truly want to maximise UK content in their projects, but they also have the economics; budget, timeline, and risk to manage and deliver.?

This is where the government has to step in. We have seen ?rsted raise the stakes with Hornsea 3, inflation and interest rates driving up costs making projects potentially untenable. This is also seen in the US.?

If projects are that marginal at the moment, this does not make it easier for developers to push higher levels of local content in their projects.?

If we are serious about #netzero, #offshorewind and green growth, we need to do better. WE are seeing what the US and the EU are doing. We need to get serious, with serious money. We need to support the developers, accepting that optimising and developing a strong domestic supply chain will cost. But the benefit will be delivery towards netzero and economic green growth.

I still propose that we need:

• The CfD needs to include a series of % bands above the ASP for the technology that represents more ambitious local content levels in the project. More local content, more return. A subsidy.?
• Obviously, the achieved content level would need 3rd party verification after the construction (for the CAPEX element), and something like every 4 years for the OPEX element. If verification fails, it loses the band with form of penalty %.
• Since this would feed into the project’s FID, the risk of losing would ensure that local content is measured and visible at a high level in the project as it is developed. It would be part of the TDD of any FID or subsequent transaction. This is having teeth.?

By missing AR6’s consultation, this if accepted as a possible approach will not appear until AR7, at the earliest. It is vital that some subsidy is provided to support the development of local content. While O&G style tax breaks, as requested by Orsted, will help the project economics, it will not drive up local content levels.

This is my ‘ask’.?