Podcast transcript: how the UK can unleash the potential of offshore wind

Ed Reed

Hello and welcome to the 10 Point Pod, a special podcast box set from energy voice out loud in which we assess point by point, the UK government's plan for a green industrial revolution, drawing together expertise from our partners for this series - EY and leaders from across the energy industry.

My name is Ed Reed. I'm an editor at Energy Voice where we are leading the global energy conversation and I'm delighted to be joined for this conversation by my co-host, Andrew Perkins, Corporate Finance Partner at EY and special guest Benj Sykes, Vice President, UK Offshore and Head of UK Market Development at Ørsted. The UK government is eager to demonstrate to the world and its citizens that there are new opportunities arising from the energy transition. The phrase ‘build back better’ is at the heart of this plan and there is a real sort of social resonance for that phrase which I have experienced first-hand. My 3 year old yesterday informed me of his plans to build back better after the structural deficiencies of a tower he was building were exposed. So, I think that this is clearly something the entire country and indeed wider can get behind. I think new US President Joe Biden has also got a build back better plan, so I think it's clearly a phrase with big picture resonance, but I think you know obviously the question for the UK is ‘What does it mean here and how is it going to be manifested?’ I think you know the government sees the energy transition as both a means to tackle climate change, but also an end in terms of providing more support for an economy that is struggling, you know in the face of pandemic driven headwinds. So, there's clearly a lot of choppy waters to navigate to get those big turbines turning. Speaking of which, the first point of the UK government’s plan is offshore wind, so Point 1 of Prime Minister Boris Johnson's plan set out in November 2020, at which point he set out the goal of reaching 40 gigawatts of offshore wind, including one gigawatts of floating offshore wind by 2030, and previously just, you know, kind of cast our minds back. The goal had been for 10 gigawatts by 2030, so this is a fairly dramatic escalation.

So, clearly, given these sort of big targets, there's a lot of space to be to be covered in the next nine years, so I think I mean, I suppose that the first question that strikes me is, is what is the country’s advantages in helping turning this dream into a reality? Andrew, why don’t you kick us off? What do you think?

Andrew Perkins

The UK's incredibly well placed I mean the obvious thing is, we're an island, and therefore there's a lot of water around us, and a lot of that water is very, very suitable for offshore wind. It's also we are in the right place in the world, so there's a lot of wind, so you put those two things together, which means we've got a great resource potential and we’re not too far away from it, so actually where we want the power to be. The wind farms aren't that far away in the grid connections. On top of that, we've got great policy enablement, been very impressive in offshore wind over the last 10 years, and really pushing it to build. There's an energy imperative. We do need to have a replacement for North Sea oil, and we need to actually have energy for our system, so that's there as well. So, we’re very well set up. This all comes through in our renewable energy country attractiveness index, where we rate different countries.

The UK is currently rated third, I think behind China and the US, clearly showing really what we've done in the market, what the UK has done to actually develop offshore wind.

Ed Reed

And I suppose you know one of the points that can always kind of come up is this question about sort of finance and the extent to which the UK and sort of I suppose London in particular has seemed to have sort of drive that in many ways, the global market. Do you think that the finance industry is ready for this new sort of optimistic goal of that sort of 40 gigawatts by 2030?

Andrew Perkins

Yes, the finance industry there is in a massive change in the appetite and attitude towards that ESG funding and quite rightly, the financials are all very interested in increasing the percentage of funding towards assets like offshore wind.

So, there is a lot of money out there and they will want to lend into the 30 billion that will spend taking it from 10 to 40 gigawatts. So, it's a huge amount of money.

The basic policy enablement I talked about earlier, the contract for difference has been very successful. The price has come down significantly, but there is it still an underpinning of the price so the main thing is I would say the government, this government, successive governments need to support price stability. So as the financers invest at very low cost of capital and then we the consumers benefit from that because of that lower cost of capital directly transfers to lower cost of power.

Ed Reed

Sure sure, as I suppose you know maybe we will come to you Benji now. Obviously Ørsted stood as a sort of a relatively, you know, new sort of a Phoenix emerging from the vestiges of an old oil and gas company, how does the offshore wind sector look to you?

Benj Sykes

It’s a really exciting time to be in this sector. As you say, Ørsted is a company that used to be actually reasonably successful in the oil and gas sector, but we made a decision several years ago now to transform ourselves as we would say from black to green, from oil and gas and fossil fuels to an entirely clean energy company, and that's been a great move for us and have funnily enough, it’s a move I made myself. I'm also from oil and gas for 20 plus years before I made that switch. I think the UK is turning out to be a fantastic place for offshore wind. As Andrew said, we've got some of the best resource in terms of wind. We also have unusually shallow seas in the North Sea, which lends itself to very cost effective offshore wind. We can talk perhaps later about that and the importance of floating wins in later decades.

And the policy stability that we've had for at least a decade is really driving the level of investment that we've seen. But we've got a lot of work to do. I think if we're going to hit that 40 GW target, it is ambitious, it is a big shift from where we were. We were at 30 gigawatts only 18 months ago. So, the stretch target is huge. Currently installed in the UK we've got around 11 gigawatts. So that gives you a sense of quite how much we need to ramp up deployment. I would agree with Andrew. I think the financing is going to be there so long as we are able to show investors that there is certainty of revenue and the great thing is with the cost reduction that the sectors achieved, we can see prices which are now coming through these contracts for differences to below the government's own forward price curve. So if you like them then negative support mechanisms, but they provide that certainty of revenue that's so important to keep the cost of capital down. So I think we've got a lot to be positive about. I'd add to Andrew’s list of why offshore winds good in the UK. The fact that we have a great history of marine engineering through oil and gas, through our maritime activities where we are a maritime nation, and I think it lends itself very well to being the leader in offshore wind, which the UK currently is.

Ed Reed

Sure, just to pull you up slightly on that negative pricing mechanism. Could you maybe just explain that a little bit more?

Benj Sykes

Yeah, so um, in broad terms, if you look at the forward price curve for electricity, for wholesale electricity that the Department for Business Energy and Industrial Strategy BEIS used. Those prices at the time that the most recent crop of CFD projects comes online. So these are contracts for difference that were awarded in 2019 at prices in 2012 money of around about 40 pounds a MW hour. Now that is below the price that is being forecast in the wholesale market by government. So those contracts for difference will result in payments from the asset owners back to government rather than the other way around, so this isn't putting money on consumers bills.

Ed Reed

Sure, I suppose you know that there is a sort of question mark around that sort of contracts for difference, I mean turning to you, Andrew. I mean, do you think that think they're going to stick around or is there a new model possible?

Andrew Perkins

They will stick around. I really do believe they'll stick around. They are a very good policy. The fact that the energy prices above where the CFD is being struck means that the effective subsidy on that is negative. The real challenge for it though is it as offshore wind increases there will be more intermittency and therefore if there is a period like we had about three weeks ago when there was a high pressure over the UK, no wind. Therefore, actually there's not enough power coming on the system, the prices will go right up, and when there's lots of wind, you know there may be oversupply, in which case the price will go down and as long as that sort of balances out so that in overall there's not a subsidy from the government, then I do believe they'll continue. If there is oversupply and it stays low for a long time, then obviously successive governments might question it.

Ed Reed

It sure sure, and I suppose you know that that sort of that sort of metric of falling prices, I mean, do we expect that to continue falling? Is that technology driven?

Benj Sykes

A lot of it is driven by technology and I think we've always under estimated the pace and scale of technology development in this and many other industries. If we look at the strike prices in the first CFD auction in 2015, they were around £115 pounds. So you can see over just four years, we've seen a huge drop in the in the strike price is almost down by 2/3. And I think that is testament to the opportunities that technology innovation brings not only in the hardware we're seeing ever bigger turbines. We're now building turbines 12 megawatts and above, and those turbines drive huge economies of scale, but also we're learning a lot about how to install and operate them more cost effectively. So it's not just the capital, it's the whole process of designing, building and operating the wind farm.

Where we are innovating and again the UK is in a good position. We've done a lot of that innovation in the UK and I think as a market leader it's quite right that we continue that. So I think costs will continue to come down, not necessarily at the extraordinary rate we've seen them come down in the last decade, but the competitive nature of the CFD auction process I think will ensure that we continue to look for every opportunity to drive cost down.

Andrew spoke earlier about the importance of the cost reduction and also building out a green industrial revolution. I think one really important aspect to remember is cheap electricity drives a thriving economy, and I think the low cost that we're achieving in offshore wind, which is why the government wants to put it as the backbone of our electricity system is very much to power that whole economy, it’s not just about jobs in offshore wind. It’s about jobs throughout every sector, right across the UK.

Ed Reed

Sure and Andrew, what do you feel? Do you feel that the offshore wind is going to be driving the UK economy in the way that Benji is forecasting?

Andrew Perkins

Yes, I do because as the, as the costs come lower. Well I do think it will drive it but I don't think it will drive it alone and there's also a place for onshore wind and solar, and those costs have come down enormously as well, and then there used to be as you'd say, well, offshore wind is always giving more expensive than onshore wind, but actually that's not the case anymore. You'd be looking at that going well actually, it all depends on the site you selected for the onshore wind project or the solar project compared to the one you selected for the offshore wind project. So there's a place for all of them, and I think in the mix of steady power that's good, but there's no question offshore wind is where you get the amount of capacity you can put in the ground or in the sea, is such that’s where it's really gonna be driving it. I mean, I'd be interested to get Benji’s view on just why the UK supply base hasn't developed out and we've got 11 gigawatts offshore and actually are we do produce blades. We have lots of engineers on the project but actually we're not necessarily producing that much of the equipment that goes out. Could we do more?

Benj Sykes

So yeah, so I'm very Andrew. I'm very happy to talk about that and I think this is a 10 point plan for a green industrial revolution. It is about creating industrial and economic activity on the back of the build out of offshore wind, and quite right too. Some of your listeners may know that the industry and government agreed an offshore wind sector deal, well nearly two years ago now and in that we have made some very clear commitments that we are honouring to build a stronger supply chain.

As regards where we are, I think it's important to note that we published the report, I think it was 2017 where we demonstrated with a methodology agreed by government that we are already at just under 50% UK content over the life cycle of our projects. And if you think this is an industry that's only existed for something like 10 years, 15 years in the UK at any scale, that's pretty remarkable. Certainly when you go and compare it to other longer term industries in the UK like automotive. So I think we need to be careful not to suggest that offshore wind has not been building a supply chain we have blades, we have other really important components and services coming out of the UK, but there is more we need to do and the industry has committed to work towards our ambition of 60% of UK content in UK projects by 2030. And there's quite a few things we're doing right now to deliver that. I think there's some really fundamentally important factors here, though. One is that

like many industries, offshore wind is a global industry now, so we need to make sure that as we build that supply chain in the UK, we develop the goods and services in the UK that they are globally competitive.

We mustn't allow ourselves to take a protectionist approach that will just add costs to consumers and ultimately deliver businesses that can't stand on their own 2 feet in the global market. So let's make sure we identify what it is that the UK has as skills and capabilities that make the UK the place to do these activities. And there's plenty that we can do.

I think the UK is also been challenged in terms of some fundamental points around infrastructure. One of the unusual characteristics of the UK is that ports are privately owned and very rarely owned by government, and so when we are competing as a country with ports around the North Sea basin, for example, we see governments able to invest in and develop ports on the other coast of the North Sea that isn't possible in the UK. What's been really positive though, is to see the government’s £160 million pounds port programme that was launched recently and that will if government gets it right and we think they will, that will unlock the capabilities and the scale that we need to build competitive industries. Building foundations, more blades towers, other large components where you can only really be globally competitive if you can achieve the scale that very large port infrastructure can provide.

So, there's lots to do, but there's lots that's already happened and I wouldn't want anyone to think that we are sitting on our hands on this. We are working hard as an industry as well as Ørsted individually and lots of exciting examples of companies that we're using in the UK, and in fact taking them abroad because they are globally competitive. Whether that's dealing with unexploded ordnance in South East Asia in the North East of the US, or conducting sophisticated surveys around the world, we are very much exporting the best of British already.

Ed Reed

Fantastic, I think we're going to take a short break and then we'll come back and pick this up.

Ed Reed

And so just to pick up where we left off, I think you know clearly there’s that question about turbines and how they're getting bigger. But I think I suppose there are a number of ways in which technology is changing. Benji, maybe set out a couple of items where we could be looking for progress in this regard.

Benj Sykes

Yeah, so I think it's worth coming back to the point that Andrew raised earlier around the variability that is inherent in the generation profile of offshore wind, of course we generate when the wind blows and not when it doesn't.

So it's really important to find system level solutions that ensure that we don't only deliver low carbon low cost electricity, but also reliable. Offshore wind farms are generating something like 90 plus percent of the time, probably more now, but nonetheless we need to make sure we have a resilient system as a whole, and that's where I think the new technologies emerging around low carbon hydrogen, both blue hydrogen, which is traditionally produced hydrogen with carbon capture and storage, or what we would prefer in Ørsted because it's cleaner and we believe ultimately lower cost is renewable hydrogen, so Andrew spoke about times when there's plenty of wind, but perhaps not the demand on the system for all that electricity. What we can see is that using offshore wind to electrolyse freshwater into hydrogen oxygen using that hydrogen to power all kinds of things across the economy. Potentially power generation, but also heavy transport, decarbonising industrial processes and potentially also domestic heat. Hydrogen is in an early stage in its development as a technology, but it has huge potential and the UK will be publishing its hydrogen strategy shortly.

We are eagerly awaiting that, we've got a number of exciting projects in the UK and across Europe, and more widely taking hydrogen, using it in fertiliser manufacturing refineries so that we can start to decarbonise sectors and this does start to deal with this question of variability. I think the other technology that's important to think about is storage and how we can see a smarter grid. Everyone loves to talk about a smart grid, but it is becoming a reality and I think particularly with the huge amount of storage that's coming through electric vehicles as that grows as a part of our transport system, we've got a real opportunity to create a smart grid where those vehicles because we know cars are parked something like 80 plus percent of the time, they can be used as smart storage system, so there's a lot of technology that's coming. We need to develop it. We need to deploy it. We need to create the policies that will pull it through to commercial deployment, but I think in the round we are on that journey whether technologies will solve the challenges of particularly the resiliency of the grid.

Ed Reed

As sort of directing that question at you, Andrew. I mean, do you feel that the question of sort of energy storage of hydrogen of those sort of smart grids, is that sufficient as yet or is there still more sort of room to run?

Andrew Perkins

A really really good question, and one that a lot of people are thinking about at the moment in that it's I would dearly love to be able to be 100% certain that it will happen and the degree to which it would happen and the cost of it. You know looking at that, but at the moment there's a lot that's got to happen, even the roll out. Some started the roll out of electric vehicles that is happening a lot quicker. There are a lot of big plans announced in January this year. The UK is looking to build a giga factory up in, up near Blyth chemical British vault and that is that's going to drive it. But there's a lot of money needed deployed in that. And then as far as you are using the battery in a car as a storage device. Yes it's good in theory, but actually distribution system needs to be able to be fit for purpose for that, so I think there's a lot of thinking that needs to go into that. A lot of intellectual property again can that be developed here and exported. I mean yes and with hydrogen, I'm a massive advocate of hydrogen. I think both for transport and all the other mechanisms and uses that are out there. But it's still a nascent technology and it is very inefficient to convert power into hydrogen just to put it back into power again and expensive to put into other things, so I think we're going to see a lot of technology evolve over the next five years which will answer these questions and there's no doubt there's a lot of momentum behind that change. The UK is driving it, other European countries like Germany is absolutely behind it as well, and in a way the race is there in order to gather the enough sort of knowledge and expertise around this so that we can sort our energy needs to make sure that the lights are on and it's low carbon and then we can share that expertise across the world to actually help other people catch up.

Benj Sykes

Just jumping in on Andrew’s Point actually around their cost point. The current price point for low carbon and particularly renewable hydrogen. He's absolutely right. You know it's a nascent technology, and it's certainly not standing on its own 2 feet at this point as a competitive alternative to carbon intensive hydrogen production. What I would say though, is we were saying that about offshore wind 10 years ago and look where we've got, and I think obviously there are differences here, but I think, as I said earlier, it's easy to underestimate and hard to overestimate. How in ingenuity and innovation can drive cost down where there is a need and I think as we all recognise the urgency of getting climate change back in the box, I believe that those cost reductions will be delivering potentially more quickly than we all expected based on not only offshore wind experience but also solar PV and other technologies which have shown phenomenal rates of cost reduction.

Andrew Perkins

I agree with that Benji and that, when we did a survey of the offshore costs about six or seven years ago, and we look forward and talk to all the developers of offshore wind farms around what their costs were looking like and some of the developers and how their costs were looking what they were looking to roll out, and no one believed it was going to get below £100 pounds. And if we looked at all the component parts, each individual line was everyone was being quite conservative and they really sort of pushed it out.

They just couldn't get expect the price to come down. I think what really happens is that when an industry gets behind something like offshore wind or solar or hydrogen then it all works together and the cost come down a lot quicker than people anticipate.

Ed Reed

And then I suppose, kinda picking up that baton of that technological question. Obviously as we've said, there's the aim for a gigawatt of floating offshore wind. Obviously this is, you know, so talking about nascent technologies. Andrew, do you think you think that the floating offshore wind will be ready to deliver that scale of generation by 2030?

Andrew Perkins

Building offshore wind has been discussed for a few years and it is right there and ready. Now we've got the Kincardin project being built out up in Scotland. Great project and we've got clients who've got giga watts of pipeline of floating offshore wind to build out. I wouldn't be surprised to see several projects coming through in the next few years, both in the UK and across the North Sea, so it's one of those ones where it looks uneconomic at the moment, but the costs are coming down and the desire is there to actually bring the cost down to make it happen. And there are lots of locations where offshore wind, sorry, floating offshore wind is the logical solution. So yes, I do believe that the giga watt everyone looked back on in 2030 and go actually that wasn't a particularly large target.

Benj Sykes

So floating is where offshore wind was fixed. Bottom fixed offshore wind was 10 or perhaps slightly more years ago and I think as Andrew says it's going to be an important technology, certainly relatively marginal out to 2030 in our view, and clearly floating is going to play a big roll out to 2050, particularly in Scotland, we’re very excited by the Scottish offshore wind market. We think it's got huge potential actually for bottom fixed wind as well because technology is not only getting the cost of floating wind down, but it's also enabling us to push current bottom fixed technology into deeper waters and more challenging conditions. So Scotland is going to be, I think, growing very rapidly as an offshore wind market, but floating will be very much. Pardon the pun, anchored there I believe, and I think if we look at the emerging technologies that that are being used for floating, we can see that there's still a bit of Darwinism needed to decide which are going to be the winners in which, which will fall by the wayside. But I think in the medium-term floating is going to be a very exciting technology and at Ørsted we are very much focused on our extensive portfolio and pipeline of bottom fixed projects, but of course we're very well aware of that longer-term future. If you look at what, for example, the climate change committee said in its six carbon budgets about the potential scale of offshore wind that we're going to need to hit net zero by 2050, we are clearly going to need floating wind farms at scale at the GW scale as well as bottom fixed wind, particularly if we're going to use it for generating hydrogen as well as providing clean power.

Ed Reed

Sure, sure and then I suppose you know, given these sort of major expansion plans, there's that question about sort of transmission and is the grid, not just the onshore grid, is it ready? By that sort of state of investments to linking offshore capacity up with the onshore grid. Is more work needed Andrew?  

Andrew Perkins

Well, we are very close to this particular part of the market, in the fact that we've supported our client win quite a lot of the off-tow licences, and I'd say it's a very competitive market and the technology is very proven. This is something that is known and has a very low risk to it and therefore low cost of capital applies to it. We’re also involved in the interconnector industry, which I think is also very important for making sure the power flows across Europe to where it's needed. So I think from the connection, the cables lying underneath the sea bed, that's something that is known and proven, and the supply chains working, and it's a good industry. The onshore connections are slightly changing. They were point to point, all across the UK. I think we're beginning to see a bit more aggregated hubs. We've seen well publicised one, which also get Benji to talk about over incapable Copenhagen, the Energy Island, where they are basically promoting an effective hub, where all the offshores window connect into to create one location which can then have a larger cable taken into where the powers needed. I think we'll see more of that coming through over the next few years, so maybe less point to point with more hubs so don’t know what Benji thinks of it.

Benj Sykes

Well, I've got quite a lot to say on that so no surprise, so Andrew is absolutely right that the off tow point regime has been very good at driving the cost of capital down and enabling companies like ours, Ørsted, to recycle capital into the next generator project. But I think the off tow regime is ultimately going to be a victim of the success of the industry, because point to point is a fine way to connect a few wind farms to the grid. It's not a fine way probably to connect 100 gigawatts of offshore wind to the grid, because there's just too much of it. So we're really pleased that on the back of the sector deal that I mentioned earlier, governments have kicked off an offshore transmission network review to look at how do we make a more integrated approach. How do we bring an integrated approach to connecting all of this offshore wind to the grid, and I think there are a couple of drivers for well number of drivers. One is around the economics because there are potentially different and maybe more economically efficient ways to connect all this power than point to point, will maybe come onto it later. But transmission is just one of a number of challenges of building out offshore wind. Another one is making sure that we fully respect the environmental aspects of development in the marine environment.

And the fewer cables that we put in the sea bed, the better from that perspective and also onshore we know the disruption that laying cables, we bury our onshore cables no overhead lines that we build, but nonetheless installing onshore cables and building onshore substations can be disruptive for communities who are nearby those activities. So I think there's a number of reasons why, given the scale of ambition that we have for offshore wind in the UK is quite right, that we look at different and smarter ways to connect.

Ed Reed

Sure, just picking you up on that that point about the sort of environmental impact. Benji. I think you know. I suppose that's the challenge that that we are seeing, and I've seen some concerns voiced by the RSPB is about obviously on the one hand, reducing carbon emissions is a sort of a global good, but the sort of the local impact of impact on birds and sort of flora and fauna. How do you go about sort of mitigating that impact?

Benj Sykes

Well, this is a really really important question for us as an industry. We are very much, you know, we're in this industry. I moved from black to green because I want to create a better future for my children and everyone else's as well. We're not in the business of going out to damage the environment. We know any development in the marine or indeed the terrestrial environment has an impact that's almost inevitable. So what we're focusing on is making sure that we work with RSPB and other organisations as well as statutory bodies to make sure that we fully understand and where necessary we create compensation for any impacts that we have. I think though if you step back and you know we've just done this on our Hornsea project, three which received its project consent, its development consent on the last day of 2020, which was great for us, included in that is our commitment to build certain facilities forkittiwakes , a species of bird that needs some protection, for example. So, we're doing a lot to ensure that our impact is addressed firstly by how we design the wind farms and secondly, by working closely with all of these bodies to make sure that we find appropriate ways to mitigate, and ultimately we need to compensate those impacts.

I think what we needing to do now though, as we see offshore wind scale up is step back and take a more strategic approach to how we site wind farms, how we connect them to the shore and also looking at these environmental impacts in the RAM because we're not the only activity out in the sea. There's a lot going on that’s still oil and gas for the moment, there's shipping, there's aggregates extraction and of course there’s fishing, all of which are also having impacts on the environment and I think what we need to do is to look at this in the round and work together with all of these groups and with government to find the solutions that enable us to tackle climate change whilst maintaining it and really improving the environmental status of the seas.

Ed Reed

Sure, and just, I suppose, sort of directing that to Andrew. You mentioned earlier on about that sort of the ESG shift. Obviously sort of, I suppose, at least in the world of energy away from as Benji puts it, from black to green. Do you think that there might be concerns around in terms of the sort of environmental impact of new industries?

Andrew Perkins

There is a concern that the question for me is where that concerns coming from and I really worry how we're going to address the carbon challenge we’ve got as a country. We have reduced our carbon. We've done a good job as the country. One thing that really concerns me is the imported carbon that we are struggling to reduce. We import a lot of goods from around the world and those goods are often produced in countries where their carbon intensity is greater than our own and therefore by exporting our manufacturing we have actually ultimately exported our carbon production so that needs to be looked at and actually changed and I think actually the willingness to do that change is really from the consumer and EY has just done a survey of 2,000 consumers to look at their views on carbon and sustainability because we've sort of feel that yeah, it's actually there the ones going to drive this change. And it's them that are sort of seeing it in the home, you know the cables coming in and do they think it's worthwhile, and I think it's good to see just a few figures coming from this 2,000 people we consulted with 76% would rather use sustainable energy generated in their community, so very much a local generation, which suggests that people don't mind seeing solar parks or wind farms in their region. They may not be right next door to it, but they like that.

62% of consumers are likely to purchase a product or service that is sustainable, so there's a lot of apps and things out there showing how sustainable your product is that you're going to buy, buying a new coat or shirt or whatever happens to be. 68% want to use less electricity for heating and better appliances were using less power, so I won't go on, but there's a we’re releasing that next week so anyone interested that'll be on our website, but it is interesting as consumers want the change, COVID-19 has been a, has initiated, a lot of people thinking with that change. Those beautiful, clear skies earlier last year with no, you know, no visible pollution. Everyone sort of delighted about that noise pollution gone right down. The carbon still went up unfortunately last year, so we despite, even if we stopped everything, we still have to do, reverse the impact of a lot of years of producing carbon into the environment. But yes, the consumers are behind us.

Ed Reed

And just sort of in closing, I mean, as you mentioned, that sort of, that sort of global impact. In that sort of back and forth of carbon. But I still sort of, you know, drilling that down into the offshore wind. What do you think are the lessons that could be learned from the global industry and I suppose also you know, what do you think about what, what the UK might be able to provide to the rest of the world in due course?

Benj Sykes

Well, I suppose you need to look at this from the perspective of the UK as the world leader in this technology we are deploying and have deployed more than pretty much any other country outside of China and I think one of the things that I'm quite involved in both with my Ørsted hat on but also as the previous chair of the offshore Wind Industry Council and working with UN bodies like the ocean panel.

Looking at what is it that has made the UK successful and I think there are some exportable things there. It's about the policy regime and the stability of that policy regime that we've seen over 15 years, which Andrew referred to earlier is absolutely vital to give investors confidence that when they come and invest in a technology that has a 25 plus year life cycle, that they know what they are going to get.

I think it's also about partnership between industry and government. One of the things we've done is work very closely with government on those things where we need to work together. Whether that's developing the supply chain, ensuring the fit for purpose policy, we've very much engaged together on that journey with a common challenge of how we get low cost, clean electricity onto the grid. So, I think that those are two areas that I would very much say the UK should be and is exporting around the world.

Ed Reed

And in terms of things that we can learn from elsewhere in the world?

Benj Sykes

I suppose, on the supply chain, it's really important that we press on and find what we're going to do, but I think we need to take a leaf out of some other countries books and look at what can we be good at. I mentioned this earlier but what we need to look at is why have other countries been successful in not just in this industry but in other new industries. What is made countries successful in building their supply chains? And I think it is finding out what you're good at and then relentlessly pursuing it.

Ed Reed

Sure, sure, Andrew tell me what can the UK show the world and what can the UK learn?

Andrew Perkins

The UK is already showing the world its excellence in engineering and I would say this with my professional services, we're working around the world with colleagues.

And those networks work really well, and I think the knowledge is flowing around the world in a way of, you know, best practises is being shared, and the global Giants like Ørsted have a massive role to play in that. The UK is learning from other countries who are building things and putting things together and hopefully we'll do a bit more of that over time, but you know it is a global market, nearer to home European market. The wrong target is to hope to do everything here because that would just be inefficient. So we need to be part of that market and have a fair share of it and not necessarily have to dominate every part of it.

Ed Reed

Fantastic. Well listen. Thank you so much to you both Andrew Perkins and Benji Sykes, this has been a really insightful conversation, I think. I suppose the thing that really stands out for me is that is that question of sort of nurturing.

How to nurture an industry which I suppose, is probably, you know applicable to a number of areas, but I suppose this sort of offshore wind and this sort of the variants you know, like this hydrogen and this sort of storage and the floating offshore and trying to find the right sort of policy balance and sort of financial stability. I think it's going to be a really interesting one to watch and obviously you know it's playing out instead of a relatively short time frame given the way if you know that sort of nine year clock is sort of underway, so thank you to you both, to our listeners. Please let us know your thoughts on this topic through our social media channels or by emailing outloud@energyvoice.com. If you want to be part of the conversation and share your story with the energy industry, you can email outloud@energyvoice.com too. You may already know that every week the energy voice team get together to highlight important stories from the world of energy in our regular podcast episodes. So, if you're not already, please do subscribe free to energy voice out loud in Apple podcast, Spotify or wherever you get your podcasts to get this essential briefing every Friday.

We'll be digging into the rest of the 10 Point Plan over the rest of this year leading up to COP26, so do please look out for those. But for this, the first episode of the 10 Point Pod I've been, Ed Reed. Thank you for listening.

Andrew Perkins

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