'It has to be a collaborative effort' | Which oil company is still going after floating wind opportunities?

Building a commercially viable floating wind farm in the Celtic Sea will require unprecedented levels of cooperation across government and industry, the head of Equinor’s UK renewables business has said.

Like other European oil majors, Equinor has toughened up its strategy toward investments in clean energy, raising the bar on the returns that new investments in renewables will be required to provide, but the decision to wade into the Celtic Sea tender showed that the company still has an appetite when it sees as the right opportunity.

"It's been a long process,” said Melissa Read, Equinor’s head of regional development for renewables in the UK. “We had a project team working in the area even before the formal process was launched… and to actually get to the end and get awarded a site is a huge satisfaction.

Infrastructure holds the key

Read stressed that there is now a long road ahead as Equinor tries to reach a final investment decision, and an even longer one to get turbines in the water.

“We’ve been working on this bid for years, and now we have a site. But this is just a starting point. We have to go through all of the next stages to get to what is hopefully an investable position,” she said.

The company will now step up its site investigations and studies, and begin engaging with stakeholders, but getting to a final investment decision will probably hinge on progress with infrastructure in a region that has little previous experience of offshore wind.

“We need to bring in government, we need to work with EDF and ESB and with whoever takes on other projects in the region. We are going to need scale to make sure that the infrastructure in these ports is invested, and on the grid side too.”

The Equinor site is located closer to the southwest peninsula of England than it is to South Wales, but ports on both sides of the Celtic Sea are under consideration, with Bristol and Port Talbot named as options in the bidding process.

“This is a new area for offshore wind and we are looking to really develop the local supply chain here, whether through skills or through infrastructure. But this just can't be done through one project alone. It has to be a collaborative effort,” Read said.

The kind of collaboration she was talking about goes beyond co-developers and includes institutional support and a growing trend toward industry clusters.

“Now we know that EDF and ESB are winners of the other side, this can start to take shape. But it has to be right across the industry, involving the UK government, the Welsh government, National Grid, the ports. It has to be a collective effort to bring together the benefits that one project alone can't bring,” Read continued.

"We also need a future leasing pipeline from the Crown Estate to provide the scale and the future vision to allow for some of this investment in the area," she said.

Read backed The Crown Estate's stated mission to find takers for the area not yet awarded, called PDA2

The seabed landlord stated that it is continuing to work on a range of options to deliver this additional capacity and expects to set out next steps by the end of September 2025.

"The more the merrier. It is scale that's going to drive this inward investment forward," Read said.

The UK government’s efforts to make institutional frameworks more responsive to the needs of offshore wind developers already include measures to facilitate a more collaborative approach.

One example of this is the Holistic Network Design (HND), a strategic blueprint developed by the UK’s National Energy System Operator (Neso), which is intended to bring an integrated approach to the planning and development of transmission infrastructure.

Another is the Marine Recovery Fund (MRF), a government initiative designed to streamline environmental compensation for offshore wind projects while enhancing protection for marine ecosystems.

This includes an industry-funded pot used to deliver compensatory environmental measures in a collaborative way, rather than on a project-by-project basis

Read said these moves are in tune with the way industry is developing, and broadly welcomed them.

"I think there's a number of ways that we can look at these things together as an industry, whether it's strategic compensation through the (MRF), strategic supply chain costs through the industrial growth plan, or grid networks being developed in a more holistic way," she said.

She also identified an organic response to the challenges faced by the emerging floating offshore wind industry.

"We are also seeing a much more cluster-based approach to development, often through industry groups," she said. "We are very keen to be involved in that kind of collaboration."

UK announcements have also raised expectations for more access to funding through entities such as GB Energy and The Crown Estate's new supply chain fund.

"At the moment there's a lot of good announcements, such as the creation of the Crown Estate Fund. All of these are very welcome, but the next stage is to see how these are invested," Read said.

Project timelines

The Celtic Sea projects that were put to auction in Lease Round 5 were initially touted as prospectively operational early next decade, but the timeline is looking less ambitious now.

Equinor came out of the lease round with a 2035 grid connection slot and a 10-year option period.

"Our timeline driver at the moment is our grid connection in 2035, as there would be little point in having turbines turning if we can't then plug it into the grid," Read said.

"The 10-year option gives us exclusivity on that site to do the investigation work, and to get the consents, to do all the environmental surveys, to get an offtake through a Contract for Difference, to take our investment decision.... so all of that is going to take a number of years," she said.

"These timelines do take a while, purely because of the steps to go through and recognising that this is still an emerging technology .

"We still need to see the cost reductions in terms of turbines, industrialisation, and then aligning with some of the regulatory framework as well as government support for floating through the CFDs.

There's a lot of moving parts for us to keep an eye on.. but will expect to see this happen in that 10-year frame.

Early phase development work will begin almost immediately, however, and this includes studies on which kind of floating technology would be used, Read added.

She stressed that the decision to acquire acreage in the Celtic Sea lease round was motivated partly by an assessment that the UK is a core strategic market for the company in offshore wind and is also one of the places where it has built up a world-leading experience in floating wind.

Equinor's portfolio already includes the Hywind Scotland and Hywind Tampen floating offshore wind projects, respectively the world's first and the world's largest floating offshore wind farms

"We've got operational assets here. So we've got synergies. The second key driver is really the floating technology. We've got over a decade of experience as an operator and developer of these projects," Read said.

"These are risks we know and understand as we have lived with them for the past decade. It's a case of really building on that technical experience and developing it."