Global Energy Group has today announced that it has agreed terms with leading offshore wind tower manufacturing specialist, Haizea Wind Group, to build a £110m-plus state-of-the-art offshore wind tubular rolling facility at Port of Nigg, located in the Scottish Highlands.
Nigg Offshore Wind (NOW) will be a giant, 450-meter-long, 38,000 m2 factory, capable of rolling steel plate to supply towers which will weigh in excess of 1,000 tonnes each and other products, to the booming UK offshore fixed and floating wind industry in the UK and abroad.
Tim Cornelius, CEO of GEG, commented:
“The continued focus on a Just Transition to a carbon neutral economy has received fresh impetus as a result of the impact of COVID-19 and the Scottish and UK governments are looking for opportunities presented by the now inevitable energy transition from a dependency on hydrocarbons to clean and sustainable sources of energy, to create jobs and generate sustainable economic growth.
The announcement today of a state-of-the-art tower rolling factory at the Port of Nigg can and will be a leading example of the ‘green recovery’ in action. It will create more than 400 direct long term, high-value jobs, and will offer our existing clients and new customers from around the world with the opportunity to buy ‘Scottish’ – meaning offshore wind developers can achieve their local content targets whilst helping the UK economy recover in a green and sustainable way. The facility will also create more than 1000 indirect jobs in the Scottish and UK supply chain. We are delighted to be partnering with Haizea who will bring their tower manufacturing expertise and knowledge to the Highlands of Scotland.
We have to acknowledge the immense financial, technical and commercial support we have received from SSE Renewables who have worked tirelessly with us for the past two years to make this dream a reality. Without the support of SSE, this factory would not be built. We also have to thank Mainstream Renewable Power for their drive and commitment to securing this key strategic asset for Scotland. They have played a pivotal role in making this happen. Both companies are taking leadership positions that the rest of the sector should seek to emulate. They are putting their money where their mouths are and we will now look to repay the faith they have in us by creating an indigenous supply chain that will be the envy of Europe.”
Subject to successfully achieving financial close, the NOW factory will receive substantial financial backing totalling £15m in debt from SSE Renewables making the renewable energy leader the largest single UK-based strategic backer behind the NOW plans, along with senior debt being provided (subject to due diligence and approvals) by Sequoia Economic Infrastructure Income Fund.
Global wind and solar company Mainstream Renewable Power is a key lender in the funding syndicate, proving £5 million in debt, as well as a strategic partner in the long-term development of the facility. The factory is expected to receive funding support from the Scottish Government via Highlands and Islands Enterprise and the UK Government via the offshore wind manufacturing investment support scheme. UK Government funding is subject to the completion of ongoing due diligence.
The facility has been designed to supply towers and other large tubular components suitable for both the fixed and floating offshore wind markets. Whilst the initial contracts for tower supply will focus on UK domestic supply, it is anticipated that the factory will be in high demand for export of towers and other products as well due to the rapid rate of planned offshore wind deployment across Europe up until 2050.
The factory design will integrate cutting edge robotics and welding inspection technology originally developed for the offshore oil and gas industry. Regional staff historically employed in the oil and gas industry will have the opportunity to be re-trained and upskilled at the Nigg Skills Academy to allow them to operate the machinery required to roll these giant structures.
The UK Government has committed to 40GW of installed offshore capacity by 2030, bringing overall UK wind capacity to over 50GW. At the current size of turbine used in the market, that means the UK needs more than 3,000 towers to reach this ambitious target. However, the UK currently does not have a factory capable of producing towers to the specification required for future planned projects by leading fixed and floating developers.
The Port of Nigg rolling facility will be capable of producing up to 135 towers per year as well as other important structures for the offshore wind industry such as transition pieces, suction buckets and bespoke tubular structures for the exciting floating offshore wind market in the UK and abroad. The cost of the new facility, inclusive of rolling machinery robotics and a new blast and paint shop is £110 – 120m.
The new factory is an enabler to firmly establish the Port of Nigg as a strategic offshore wind hub which includes the consolidation of the Port’s existing marshalling and staging work for turbine components and foundations (the marshalling and staging work already employs over 120+ people).
Alistair Phillips-Davies, CEO of SSE, said:
“Today’s announcement shows that SSE is willing to put its money where its mouth is to support development of the Scottish manufacturing capability for the offshore wind sector. We have worked with Global Energy Group and stakeholders for over two years to get to this point. Global Energy Group has exciting plans for a world-class tower factory at Port of Nigg and our investment in the planned manufacturing facility demonstrates our continuing commitment to do what we can to support the development of a competitive Scottish supply chain and create local jobs. In addition to the debt funding, SSE also looks forward to fulfilling its role as a strategic backer and placing orders with the factory to meet our growing offshore wind pipeline in the near future. SSE is in a unique position with projects of scale, such as Dogger Bank and Berwick Bank, to create sustainable, long-term supply chain opportunities such as at Nigg and the new GE blade factory in Teesside.”
Mary Quaney, CEO of Mainstream Renewable Power, said:
“Mainstream has consistently viewed the development of local supply chains as a vital part of the growth of Scotland’s emerging offshore wind sector. Today’s announcement demonstrates Mainstream’s commitment to investing ahead of the market to deliver practical, enduring and value-creating assets for the benefit of all in Scotland’s Just Transition to a #netzero economy. We are delighted to be able to work with Global Energy Group and all our partners, and to leverage our experience over the last fifteen years in offshore wind to create a sustainable supply chain for Scotland.”
Greg Taylor, Director of Sequoia Investment Management Company added:
“We are pleased to be involved with this important project, which will support the continued growth of the UK offshore wind industry, help create highly-skilled and well-paying jobs in the UK and further add to our portfolio of projects with positive ESG characteristics. We look forward to working with the Global Energy Group team and our other partners to support a transition to a carbon neutral economy.”