UK Parliament / Open data

Debate on the contribution of ports to green energy

Commons Debate pack by Nicole Watson and Nikki Sutherland. It was first published on Thursday, 12 October 2023. It was last updated on Tuesday, 17 October 2023.

Ports and green energy

Ports have an important role to play in delivering offshore renewable technologies, such as offshore and floating offshore wind (FLOW), as well as wave and tidal power. Industry groups, such as Associated British Ports, have also expressed interest in developing seaports as hubs for ‘green’ hydrogen.

The government has targets of deploying:

50GW of offshore wind by 2030, including 5GW of floating offshore wind (FLOW)
Up to 10 GW of low carbon hydrogen by 2035

The Library briefing Where will Britain’s future energy supply come from? (May 2022) provides further background on these targets.

The UK Infrastructure bank has highlighted that “significant additional port infrastructure needs to be built in advance of 2030 for the UK to stay on track for net zero” (PDF, September 2023).

Ports also represent opportunities for economic growth. Analysis by the Centre for Economics and Business Research, an economic consultancy, found that, in 2019, UK ports created £10.8 billion in direct gross value added for the economy and that ports provided 126,000 jobs across the UK (PDF, May 2022).

Offshore wind and floating offshore wind

A report from the Floating Offshore Wind Taskforce, which was established by RenewableUK and the Offshore Renewable Energy Catapult in collaboration with the UK Government and devolved administration, highlights the importance of ports in enabling the deployment of offshore and floating offshore wind developments throughout the whole project lifecycle (PDF, March 2023). The report notes that port infrastructure is particularly important for floating offshore wind (FLOW) projects, which require the turbines and foundations to be built and integrated onshore, as the projects are located in deeper waters. As floating foundations are heavier and larger than bottom-fixed foundations, FLOW projects also require larger and stronger cranes and quays, as well as wider berths, access channels and wet storage. According to 2022 analysis from the Global Wind Energy Council, 80% of the world’s potential offshore wind resources is in deeper waters.

In British Energy Security Strategy, published in April 2022, the government announced updated targets for offshore wind capacity by 2030, increasing them to 50 GW (previously 40GW), and up to 5 GW floating offshore wind (previously 1GW) by 2030. To help achieve this, the government announced a series of measures to speed up the consenting process for offshore wind developments. The includes provisions to implement these measures. Further information can be found in the Library Briefings Delivery of floating offshore wind projects (October 2022) and Energy Bill [HL] 2022-23: Parts 11 and 12 - Offshore wind, oil and gas (May 2023).

Funding

In 2023, the government announced £160 million of funding under the Floating Offshore Wind Manufacturing Scheme to help ports develop the infrastructure required for FLOW. However, the publicly owned UK Infrastructure Bank has highlighted the need for further investment, pointing to estimates that the investment required for ports to support FLOW infrastructure is £3.45 billion by 2030.

The Contracts for Difference scheme (CfD) is the government’s main support scheme for large scale, low carbon power infrastructure, including offshore wind. For further information about CfDs see the Library briefing Contracts for Difference Scheme (October 2023).

Offshore wind has previously been the dominant technology in CfD auctions, where renewable development projects bid for investment. However, in the latest (fifth) CfD auction round in 2023 offshore wind developers did not place any bids.

The energy consultancy Cornwall Insight highlighted increased supply chain and development costs as key factors driving developers to opt out of bidding, as the government had not increased the price that offshore wind generators would receive to reflect these costs. The results for offshore wind in the fifth auction round were widely criticized by the energy industry. Keith Anderson, ScottishPower CEO, referred to the auction round as “a multi-billion pound lost opportunity to deliver low-cost energy for consumers and a wake-up call for Government”, stating that ScottishPower did not bid in this auction as “the economics simply did not stand up this time around”. RenewableUK urged the government “to develop and fund supply chain growth and an internationally competitive fiscal regime which attracts capital into the UK”.

Green hydrogen

Hydrogen can be produced in many different ways. ‘Green’ hydrogen uses electrolysis, passing electricity through water to separate out the hydrogen and oxygen. Seaports have been suggested as an good location for the production of green hydrogen, due to the availability of land and cooling water, presence of large industrial consumers, and proximity to offshore wind. The Library Briefing on The future hydrogen economy (June 2022) provides further information on the potential uses of hydrogen and government policy.

Under the British Energy Security Strategy, the government increased its ambition for hydrogen from 5GW by 2030 to up to 10GW by 2035. The Energy Bill 2022-23 includes provisions to support this. The Library Briefing Energy Bill [HL] 2022-23, parts 1, 2 & 3: carbon storage, hydrogen, and new technologies (May 2023) provides details.

In 2022, the Associated British Ports, which owns and operates ports across the UK and Air Products, a company that develops industrial gas projects, announced a partnership to deliver the UK’s first large scale hydrogen production plant in the Port of Immingham. The project will use green ammonia to produce green hydrogen for use in hard-to-decarbonise industry and transport applications.

Tidal stream energy and other marine technologies

Tidal stream energy generates renewable energy by using fast-flowing water driven by tidal currents.

The current installed capacity of tidal stream energy in the UK is 10MW. This represents more than half of the operational tidal stream capacity installed in the world as of 2023. Tidal stream energy was highlighted in the UK’s 2023 Independent Review of Net Zero as an area in which the UK has significant strengths and could take advantage of being a first mover.

The government has not yet set a specific target for tidal but stated in the British Energy Security Strategy (April 2022) that it would “aggressively explore renewable opportunities afforded by our geography and geology, including tidal and geothermal”. The Environmental Audit Committee (EAC) recommended in January 2023 that the government set a specific ambition for the tidal and marine energy sector in terms of gigawatts of generating capacity. The Marine Energy Council, an organisation which represents the wave and tidal stream sector in the UK, recommended that the government should set a target of 1GW of wave and tidal stream energy capacity by 2035.

In the fourth auction round of the CfD scheme in 2022, £20 million was ringfenced for tidal stream energy for the first time. Four tidal stream projects securing funding, with a total capacity of 40.8 MW. A further £10 million was ringfenced in the most recent (fifth) auction round of the CfD scheme in 2023. 11 successful bids with a total capacity of over 53MW secured funding for tidal stream energy in this most recent round.

Devolution of ports policy

Ports policy is devolved. Management of ports is carried out under the Harbours Act 1964 in England, Scotland and Wales, and under the Harbours Act (Northern Ireland) 1970 in Northern Ireland. The Harbours Act 1964 pre-dates Scottish and Welsh devolution and has not been significantly amended since.

Ports across the UK are managed by Statutory Harbour Authorities (SHAs). They are local legal entities with powers to manage a harbour area. Their powers vary depending on the size and type of the port, but usually include charging fees for vessels, maintaining harbour infrastructure and, in some cases, dredging the waters in their area.

Further information can be found in the Library Briefing Ports and Shipping FAQs (August 2022).