Global Energy Group (“GEG”), the Scottish-based energy services company has agreed on terms with offshore wind tower manufacturing specialist, Haizea Wind Group (“Haizea”), to build a £110m-plus (~$146 million) offshore wind tubular rolling facility at Port of Nigg, located in the Scottish Highlands.
GEG said Friday that Nigg Offshore Wind (“NOW”) would be 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.
"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," GEG said.
The factory design will integrate 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, GEG said.
Subject to successfully achieving financial close, GEG said, the NOW factory will receive substantial financial backing totaling £15m in debt from SSE Renewables, making SSE the largest single UK-based strategic backer behind the NOW plans, along with senior debt being provided by Sequoia Economic Infrastructure Income Fund (“Sequoia”).
GEG said that global wind and solar company Mainstream Renewable Power (“Mainstream”) was 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 (“HIE”) and the UK Government via the offshore wind manufacturing investment support scheme (“OWMIS”). UK Government funding is subject to the completion of ongoing due diligence.
"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," GEG added.
135 towers per year
According to GEG, 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 marshaling and staging work for turbine components and foundations (the marshaling and staging work already employs over 120+ people)," GEG said.
Tim Cornelius, CEO of GEG, said the project would create more than 400 direct long-term, high-value job, as well as more than 1000 indirect jobs in the Scottish and UK supply chain, and he thanked SSE and Mainstream for support.
"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," Cornelius said.
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.”