Off the curve of a sandy beach in Fairlie, the small seaside town on the North Ayrshire coast, plans for the world’s largest factory producing long-distance subsea cable are taking shape.
Its centrepiece will be a 180-metre tower that will be used by investor XLCC to speed up the process of extruding and vulcanising the advanced polymers used to make the cables.
It’s a nice example of transformation from dirty fossil fuels: the tower will be built on a former coal yard on the site of the Hunterston B nuclear plant which shut down last year after 46 years of production.
As the power plant is ‘defueled’ over the next few years, and as the 480 jobs there dwindle in number, XLCC’s chief executive Ian Douglas expects to nearly double the number of roles available on the site to 900.
If all goes according to plan – and the money is raised – work on the £1.4 billion factory could start as early as next year. Among its first customers will be XLCC’s sister firm, Xlinks, which is planning an even more ambitious solar energy development in Morocco.
Its investors believe the £20 billion project sending solar energy from the Western Sahara to a substation in Devon could meet 8 per cent of the UK’s energy requirements. If its plans come to fruition, the high voltage direct current (HVDC) interconnector will be built near the sleepy Ayrshire resort of Largs.
XLCC is also eyeing Scotland’s commitment to developing offshore wind energy in deeper waters as a significant business opportunity for the factory’s energy transmission technology, which uses lighter aluminium rather than heavier, more expensive copper. It is among a number of good reasons the firm chose Hunterston as a location for the HVDC plant, alongside its deep-water port and jetty and its skilled workforce.
Douglas said: “HVDC cable is a highly-engineered product. So having people who’ve worked in an industry such as nuclear which has got very exacting standards is a good thing.
“And so we really hope that as people start to tail off from Hunterston B, we can start to pick up and train those people.”
Scotland is aiming to be a world leader in the development of floating offshore wind through its flagship licensing and development scheme known as ScotWind. The floating element means turbines will be tethered to the seabed rather than firmly planted.
Further out to sea than fixed projects, floating wind schemes will rely on HVDC cable to connect power to the grid compared to nearer projects which can use traditional alternating current (AC) connectors.
Deeper, floating wind farms mean much more energy can be produced but the technology is still at a fledgling state.
Currently the only existing floating offshore wind projects in the world are in the North Sea. The first was Hywind, a trial project built off the coast of Peterhead by Norwegian state energy company Equinor.
This was followed by the Kincardine Offshore Wind Farm, visible from Aberdeen beach, a project led by Scottish Liberal Democrat peer Nicol Stephen and now owned by Flotation, a joint venture with Spain’s Grupo Cobra. Equinor recently came back to the market in a big way with the opening of Hywind Tampen in the Norwegian North Sea this summer.
Most floating offshore wind projects planned are in Scottish waters as part of the later stages of ScotWind. These are also massive in scale.
The largest ScotWind project, Ossian, is expected to be a 3.6GW fully-floating wind farm off the Angus coast. It is led by SSE Renewables, Marubeni Corporation and Copenhagen Infrastructure Partners. It will be more than three times larger than Seagreen, Scotland’s largest offshore wind farm.
However, among the many difficulties facing the global offshore wind industry, the sector is facing a shortage of cable – both AC and HVDC. XLCC hopes to solve this bottleneck by bringing the factory to market as soon as 2027.
Douglas says the firm is on the funding trail having achieved a major milestone when winning planning permission from South Ayrshire Council in May. The project was also awarded £9 million from government-funded Scottish Enterprise in November.
However, there are concerns that the £9 million – welcome as it is – is “a drop in the ocean” in a global race to develop cleaner energy and assist in the transition from oil and gas.
Neil Gordon, the chief executive of Aberdeen-based Global Underwater Hub, admitted the industry is struggling to make money. The organisation, formerly known as Subsea UK, has translated its expertise in developing the offshore oil and gas supply chain to looking at the global opportunity for offshore wind – and it is currently seeing shortages affecting everything from mooring and anchoring systems, anchor handling vessels and port capability for marshalling of floating foundation structures.
Part of the problem came following the UK’s energy development funding process – known as Contracts for Difference (CfD) – which “failed miserably” when there were no successful bids from offshore wind developers due to low strike price, Gordon said.
Although the energy security secretary, Claire Coutinho, recently unveiled improved pricing for the next round of CfD, it has given the industry a “cold” amidst a number of developers globally struggling to make project finance stack up.
“The supply chain has been talking for a number of years there is just no money in this industry,” says Gordon. “When you have no money it’s difficult to invest.”
But invest we must. Douglas is confident that despite the one-step-forward, two-steps-back funding landscape, his project is integral to the world’s emerging clean energy system.
“We are underpinned by the megatrend,” he said. “There can be no transition without transmission.
“We know that we have got to solve the energy transition challenges. If we don’t, we have some huge problems. There are definitely potholes in the road to getting there. But it’s a problem that has to be solved and HVDC cables are going to be at the centre of that.
“It’s important not to look too short term about what’s happening here and there but to recognise that the economic proposition for our products is absolutely compelling.