Green Volt Floating Offshore Wind Farm: Matt Green, Flotation Energy

[Music] This episode is sponsored by Lloyd's Register, a trusted partner in the evolving energy landscape, and EIC Global Platinum Partner. As the world works towards net zero, traditional fuels like oil and gas will remain essential in meeting global energy demands. Lloyd's Register supports operators across the energy spectrum, helping integrate renewables, hydrogen, nuclear, and carbon capture to existing systems. Their deep expertise ensures safe, efficient, and sustainable solutions across the full energy value chain. Backed by the Lloyd's Register Foundation, they provide independent guidance to help businesses make confident future-ready decisions. Learn more at lr.org/enegis or connect with the Lloyd's Register team in person at an upcoming EIC event. [Music] Hello and welcome to the EIC Clearly podcast. EIC Clearly, see what I did there? This is the podcast that brings you in-depth discussions with energy, policy, and thought leaders on the most critical issues, trends, and innovations shaping the global energy supply chain. [Music] Hi everybody, this is Stuart Brody from the EIC and welcome to another EIC Clearly podcast. I am delighted to be here with Matt Green, who is project director for the Green Vault Floating Offshore Wind project, which is a joint venture between flotation, energy, and voregrant. If you're wondering about Green Vault, you may or may not have heard of it. It's a critical project in the British Clean Power Agenda. It's seen as the first commercial scale floating offshore wind farm in the UK. It's already at CFD, REACH CFD in 2024, looking forward to today to finding out how the project's going, maybe one of the blockers and what are the enablers to get to FID and of course then to construction, I guess, Matt by 2029-2030. 2030, that's right. Amazing. [Music] So, Matt, welcome to our EIC offices here in London. How are you? Very good, very good. Very pleased to have you here. Yeah, and delighted that you're here too. On one of those rare sunny days, we've had such a rainy start the year, that not a windy day, and I know you're always probably thinking, "I want windy days," but not always, not until we've constructed. So, okay, normally the way we do this, Matt, is we like to start with a little bit of getting to know you, the person, and I think good way to go back to where it all started for you and the energy industry. And I guess as we go back, a common theme is going to be energy and offshore, so where did it start? I graduated as a naval architect. I got into that as, from a family of engineers, it was interesting to not really have an ad plan, going into that, so I decided to do a marine engineering qualification out of interest. And I started immediately afterwards in the oil and gas industry, with a joint venture with Sypem and Halliburton doing pipeline analyses, which is a very interesting start to a career and one which, I think, grabbed me quite early on, getting to play with large vessels and incredible engineering as well as part of that company. So, oil and gas at the start? That's right. When was this? 1995 was the start. I stayed with them for, I think, four years. I had a quick three year spell with an offshore communications company, which was Global Marine Systems, who were responsible for laying fiber optic cables. So cable laying was probably also a helpful skill to add to your arsenal? Another helpful skill. So I've done heavy lift-siphoned pipelines, and then the last right cable laying, and then I went back to Sypem, Sypem UK, again, in a capacity as my project manager, doing vessel management and an offshore oil and gas projects. So, you're a quarry for quite a while. So I guess if we go through here also Van Fowl, so a number of steps through here, was this an intentional plan to really become an offshore energy expert? Did you always see yourself moving into renewables and ultimately into the sort of leading entry renewables which you could argue is floating offshore wind? But it came in, what's been your plan? I'd love to say I was that visionary, but it wasn't all intentional. But I think what it looking back, I think it was very convenient to have worked in so many industries, so many different types of company actually, from utilities to developers, to contractors to consultancies. And it filled in a lot of the gaps, which were kind very useful when you deal in a very sort of multi-disciplinary role, which a project director is, and a multi-disciplinary industry, which I think wind power is what was in the start. I found it useful from the very starting with Van Fowl. The project team I had then was broadly an oil and gas team, we used an oil and gas consultancy to build our first project. Right through to today, and you're talking here today about green vault and green vault, is a project which involves, again, mixing up the supply chain, the renewable supply chain, and the oil and gas supply chain, and the electrical infrastructure supply chain altogether, again, in a different way than perhaps we did it when we started in fixed bottom, back in the early '90s. I don't have any come on to the supply chain, how integrated it is. But back again to your days, in the earlier part of your career, you spent quite a bit of time in Taiwan as well, didn't you? Taiwan was sort of the mid part of my renewables journey. I spent seven years with Van Fowl, which was almost a utility, Swedish utility, predominantly doing green field, renewables development in the UK on an offshore. I left them, did some work in financing of all offshore and onshore projects, with my own company, they not joined Macquarie in Taiwan. They had a very interesting proposition in Taiwan to develop what was. The first offshore wind farm outside of Europe, the first project finance wind farm outside of Europe, which is foremost a one in Taiwan. So you're talking here about effectively establishing an industry, you were kind of right at the start. How did that go? What did you learn about that? Exactly that. In Taiwan, had a maritime industry, but no offshore industry, oil and gas industry, and no real regulations to deal with how you work offshore. No certification authority, no health and safety body, it was able to deal with these types of challenges. And it was a really great experience working with them, with the regulators to develop essentially the industry out there. And so you're working hand in hand with the authorities to get to where they needed to be. And as well, you know, Macquarie, who I was working for at the time, is an investment bank predominantly. And working as a lead developer for a financial institution, and being given the opportunity to form the regulations, which build the industry in Taiwan was quite a good journey. What did you learn about what works and what does not work in setting up an industry, which arguably now, of course, is what Scotland is trying to do with floating offshore wind? I think there has to be a lot of flexibility from all sides. There needs to be a lot of give and take. You need to be listening as much as speaking. A trait which I think the Taiwanese are very good at, they're quite measured. They can take their time. It's not a criticism. They take their time in some areas. But in other areas, they're quite focused. They were open to us taking the lead. They were open to providing us with significant amounts of trust in what we were doing. And they were very keen in that we were very keen to leverage their appetite for establishing a new industry in Taiwan, which was offshore wind, the project. We were working on with a seed project for many others and many other phases of project. You made the link there to floating in Scotland. And there is definite parallels. There's a huge amount to be gained by being a market leader in a new industry, such as floating offshore wind. Scotland had the first floating offshore wind find high wind. Scotland, I mean 2017, I think that came operational. And they're very keen to strike while they are. It's hard to keep that industry moving and become an established effort. Which is very challenging. And of course, you need to do the right way. So yeah, there's many parallels and lots of learnings in the way that you need to be quite, yeah, I think flexible as the right way of pulling it. So in your time in Taiwan, what was the major achievement you most proud of? Formosa 1 was a fairly fast-tracked project. We built a team, us did, were one of the shareholders. But there was a significant number of the team from a local developer called Franco. And they were great. I mean, they were a great bunch of people. They didn't have any offshore wind experience or any offshore experience. They were mostly civil and international engineers. But they were very clever, very willing, very capable, and very willing to form part of a team, very good team players. And I think we managed to establish a team of very disparate people who actually worked together in a really good way. And that was a good feeling. We ultimately delivered the project pretty much as expected. It was on time, it was on budget, you know, in the years following. That wasn't something which was the norm. So again, you know, in a new industry, it was a rather incredible feeling to be there on the finish line of the right time. And again, it was something which ticked a few boxes for Taiwan diplomatically and for their government as well. So it was a kind of celebration. You touched very briefly on just before you went to Taipei, the green solutions business that you set up for a while, which was a project finance role. Again, why did you do that? And I suppose that's another set of skills that you're bringing to now the floating offshore wind challenge. It was set up as a consultancy to advise on M&A transactions and I was working with some other companies to be in a technical advisory to financial transactions. And it did give me an insight into the M&A business working previously before that for mostly contractors and utilities. That's not something you get particularly involved in. And it was interesting to see how investment organisations valued offshore wind projects and how they valued risk and how they valued the planning and the setup of these projects as much as the returns. And I think to get that quite rounded view of, you know, and informed an intelligent outsider but still one with predominantly a financial viewpoint to these investments. Turning a project into an investment, something I learned. Well, did you learn then about the risks that they care about the most? And just so you get, this was Fix Bottom project risk at the time. Fix Bottom and onshore. A very interesting project that we were looking into was actually in Greece where it was actually a project on the island. It was onshore. But the only way to connect it to the mainland was by an export cable. Interestingly, it was on theshore project with an export cable. And it's the binary risks. They see binary risks they saw. In that example, the export cable is being a potentially challenging risk. They went into huge amounts of diligence into looking at the potential risk to that single point of failure taking it to the shore. As an engineer, you see everything, I think quite equally. You see everything as a challenge and then a solution. See a cable and a steel structure. And perhaps a turbine as broadly equal, but as an investor, you see where this can stop paying the bills. and sort of preventing the revenues. And then coming up to date, just before the Green Vaults project director role, you were head of Bid Strategy for a Correa Generation, which I guess is a subsidiary of Macquarie. So it's another key skill, I suppose, now as critical to the work you're doing today. It is. It was an opportunity, really, to deep dive into the global market for offshore wind and offshore renewables, and to understand how the different countries dealt with the enormous challenge of providing investors with certainty in their investments. The cornerstone of our industry is really connecting investment to engineering or wind revenue opportunities. And it's really down to the regulators to make that path as seamless as possible. Some of the, you know, I talked about binary risks earlier in a technical context, but the binary risks in terms of revenues is also, of course, one of the things that investors will be looking at significantly. I think the UK has done a very good job of putting in place over the years, a very investable market for renewables and for wind. Other countries I have been through some journeys, and Taiwan was a very interesting case study of how to create an environment for investment, which had many pros and cons and many ups and downs in Taiwan. And other countries are sort of battling with the same challenges. It was really interesting to get very critical and analytical about how we saw different markets globally, and then how to bid into those markets in a way that would provide an investable prospect for our shareholders. So then you landed the project director role for Green Vocal Congratulations of Ember 2024. Just after CFD, I assume. That's right. So this, of course, is an Aberdeen project, and it must make you feel like it's right back to your roots somehow, because now part of the Aberdeen community, the Scotland Island Gas Community, that of course is looking to floating offshore wind as one of the ways that they can transition skills as quickly as possible. So I guess we'll co-order and talk about that, but tell us firstly about the Green Vocal project and about the joint venture partners. Yeah, so Green Vocal to joint venture between Vorgren and the location energy. They're both relatively small. They're both great companies and relatively small, but quite agile, and they both are entirely dedicated to Green Vocal. It's a very big part of their businesses. They're very different businesses. They come from a very different, shell-ding structure on each side, but ultimately, I think both their ambitions are very much to support and make Green Vocal a reality. That's what Green Vocal is. It was successful in achieving its consenting and achieving its CFD, as you mentioned, in 2024, which put it in a very enviable position in the industry or certainly in the floating offshore wind industry as being the first commercial scale floating projects. As you say, it's Aberdeen based. Our offices in Aberdeen, the project is some 70 kilometres off the Aberdeen coast, and our grid connection is a 35-kilometer journey in the other direction in land, and there's a few challenges in our last sentence. We see ourselves as an Aberdeen based project, and it ticks quite a number of boxes being that. You talk about the transition from the skills and the sector which Aberdeen is predominantly being well known for on the oil and gas industry to floating offshore wind. There is a huge number of synergies there, looking forward anyway. It's all about getting it to FID, of course, then the synergies really come to life. So we'll talk about that. The Green Vocal project was awarded through Crown Estate Scotland's Intog leasing round, which not everybody may be familiar with that. Can you explain what that is? It was around a seabed leasing, as you say, run by Crown Estate Scotland. The in is innovation and the targeted oil and gas. We're in the latter category. The targeted oil and gas category. And the intention is to create synergies between, and I think this is a very important initiative to create synergies between the industries, between our energy industries, offshore, oil and gas and renewables. And in this case, floating. And the predominant intention is to create an opportunity for electrification of oil and gas platforms. So oil and gas platforms use a huge amount of power. They predominantly have generated that power by gas turbines, but there is electrification and carbon reduction opportunities to convert them to electrical generation. And to do that directly from an offshore wind farm is the most opportunistic way to do that. So that's the intention is to the Green Vocal project will be capable of providing electrification to adjacent oil and gas facilities that they want to. Yeah, so assuming it all happens on schedule, it will be the world's largest floating offshore wind farm commercial scale up to 560 megawatts. So just to understand the link between the work you're doing and the offshore industries then, are you as part of your role also having to sign the, is it PPAs? Effectively, you're signing with the oil and gas industry. How's that going to work? That's right. So to compartmentalize the project, we have 400 megawatts of grid capacity under a CFD. So we have essentially a power purchase agreement with the UK to export power to the grid. And then we have the opportunity to sign PPAs with oil and gas platforms in the vicinity. There is around four or five potentially could take the power from the wind farm. It's segregated. It would be its own dedicated turbines and cables to them, but it would be done under an entirely separate business case. And for those, would they have battery energy storage systems linked to that so that they then have base low power? How about that work? The base low power would probably become from a cable to shore solution. So we'd be an intermediary in terms of providing power in the other direction from the grid out to the oil and gas platforms. In the event that there was no wind power available for them to operate. So there'd be a hybrid, a wire to shore and turbine solution. Very interesting. Is this the world's first use of offshore wind to power oil and gas platforms? I don't believe so. I think this has been done in Norway, I think the high wind tampon project is something similar, but that's not a grid connected wind farm. So this would be the first time a grid connected wind farm would be doing this. And it's the first time it would be done on a commercial scale rather than a private solution. So the project would go ahead based on CFD without any of those additional oil company PPAs. And that would all be what was kind of upside or how would that be seen? It's all being looked at separately. So each of them would have to sort of wash their face in terms of the returns and the economics and they would have to do that together. We have obligations and there are leads to enable that to happen. Yeah, I mean we have live conversations with the oil and gas off-takers and we're hopeful that we'll get something signed. But if not in time for the FID for the CFD project shortly afterwards and we will enable it. So we'll have the technology there and the engineering in place for it to be essentially plugged in. And the regulator is responsible. This is norsea transition authority. Are they responsible to create this positive environment in the oil industry to want to sign PPAs with you or how does that work? Yeah, there's certainly a major stakeholder in that discussion and to assist. You know, I think it's one of those situations where you know the oil and gas generators will go down this route. They would like to go down this route. It makes things easier for them in the long term. I think the fiscal framework at the moment is perhaps not entirely positive to it. I think there's a few tweaks which can be looked at to make it positive and I think that's being looked into you. If you're enjoying this podcast and think you have an inspiring story to tell, contact me, Stuart Broadley, directly, as I would love to do a sea-level podcast with you too. EIC is proud to be the UK's largest membership energy trade association and the fifth largest in the world. We are unique around the world for three reasons. We are truly energy agnostic, believing all energy technologies are vital to delivering energy security, affordability and adjust transition. We are the only energy trade association anywhere in the world that offers a truly in-house one-stop shop for market intelligence, networks and events to help our members export diversifying grow. And we are proud to be the voice of the energy supply chain, advocating for the five golden rules of a healthy energy supply chain. More details on EIC membership, the five golden rules, details about doing a future podcast with me and how to contact us about anything else or in the description for this podcast. So I'd love to get into a bit of detail if I can. Then I will see I don't know how much commercial information you can share. So just go as far as you can. But have you got turbine design selection kind of in your mind yet? Are you in detailed negotiations now, I guess, with FID coming? That must be close as well. It is. I think there's broader conversation around what we need in terms of our collaboration with the supply chain on this project. Being a first of a kind, it does present certain challenges. If this was a project that had been a well-trotting path, we would be probably have penciled in our turbine supplier and our foundation supplier quite early on. We haven't yet done that. We haven't yet appointed a turbine supplier. We haven't yet appointed a substructure supplier either. But we are in advanced negotiations with more than one in both cases. The challenge there is of course maintaining the engineering workstream. So with two substructures and two turbine suppliers, there's not going on the background, but we're not pursuing four different tracks. But we are doing more than one potential engineering outcome of turbine and substructure combinations, which are still both possible. And so this is, I guess, it must feel like it's adding extra work and complexity for you, but is this because there is this fundamental big decision that sort of sits on your shoulders, subject to government policy around the turbine selection coming either from a European supplier or a Chinese supplier, or is it a bigger question than that? That is a big question we've been wrestling with throughout the project. I think the whole industry is wrestling with this question. The government's appetite for a far eastern turbine supplier to be awarded a large contract in the UK is part of it. You know, it's not something that they've provided any indication of positively or particularly negatively. I think in the press that you would have all heard about concerns, national security concerns. From a project perspective, we make the decision based on normal commercial parameters, to be honest. In the advent of any clear UK government policy, on us making that decision, we will make it based on what's best for the green vault projects. And it is an interesting decision, you know, Chinese turbines have come a long way. I personally see that there are very high quality. I think there's no indication that there is any problems with them technically or reliably. I have an insurance market, the reliability of the Chinese fleet of turbines in China has not been outlier to offshore turbines in the rest of the world. I think there's a really exciting prospect of these manufacturers coming into the UK market. Whether it's right for us or not, I can't really say today, but it has been a real test of our tendering team. Yeah, it's interesting isn't it? It's a absolute hot potato, a really difficult decision. I guess it sits for policymakers in the end to say do we allow Chinese technology to come into the offshore wind industry for such critical projects, you know, so I've actually got got a bit of an offshore wind background myself. I was in that industry for four years myself. And so I know that it's a very established, very mature, very commoditized industry, but floating offshore wind brings new challenges. So it's an amazing opportunity to put the UK at the center or something. And it feels strange, isn't it, that there's this whole debate around should we allow Chinese technology in when we should do it ourselves? That's what seems to be the rhetoric. But we've never built an offshore wind turbine or a large scale onshore wind turbine in the UK. There's this confusion around while we have large scale offshore wind manufacturing in the UK. We've laid manufacture in the UK. That's basically what we have with two plants, one Siemens energy, one's bestest. And we have selected other pieces of equipment that is made to a degree in the UK, but this seems like a great chance to bring in full capability into the UK, but then it gets sort of tarnished. And it's hard for me to know whether this is rightly so, but tarnished with the cybersecurity and other challenges around security generally. What's your view? How do you approach that from a bankability point of view, from a project, spec point of view, and also from a reputational point of view? Yeah, I mean, it's a really good question. I don't prefer to be a turbine expert, but I understand that the componentry within, let's say, generic or European turbine and a Chinese turbine is not that different. The component parts inside of it are generally made wherever they're best placed to be made and a lot of the European components are made in China, and next to the ones in the Chinese turbine. So I think it's a call them in a Chinese and European turbines is a bit of a misnomer, which is what you're sort of suggesting. We'll make the decision from what's best on the project. I mean, I think what is quite significant is the European turbine, but there is a huge bottleneck of turbine provision and we need to look at how that's addressed. Is that right? So from a European point of view, we're talking particularly here about Siemens Energy and Vesta, so they're currently backlogged, aren't they? Their appetite to develop new platforms has reduced. They had new sizes of turbines coming out very quickly and a floating derivative of one of those turbines is a new bit of technology. I mean, it isn't the same turbine put on a different platform. It needs to be engineered slightly differently. And I think their appetite to service what they see is a reasonably sort of nascent market. It's not entirely there. Having said that, you know, they've been because of the challenges they've had of bringing out new turbine platforms for the European market. They are very well placed and their engineering teams are very well placed to understand what an organization and what a project like Greenvolt really needs from this. So I would say that I wouldn't underestimate their ability to turn themselves to providing very good European based floating offshore wind turbines. And again, this is part of the challenge in choosing is that they will give us a very good product and they'll give us a very good service and they know the market and they know what we need and they know what the banks that we use need. And perhaps the Chinese suppliers have a little bit of learning to do in that regard. But I think it's inevitable that they will learn those lessons and they will be able to be a credible product supplier in Europe. Is there a material impact on FID? Either in terms of lower cost to purchase Chinese turbines or in terms of higher cost to capital because there's some kind of market nervousness around the funding of that or the insurance of that or does it balance out in the end as there might be a lower upfront cost but in the end the overall project costs, you know, to pick up, I don't know, some assumption of high maintenance cost later in the life or something like that. I think both routes are bankable. I think from what we've seen in the initial market sounding is that the investor market are intelligent enough to be able to understand the pros and cons of both routes. So I don't think there's a huge overall difference in what our project would look like going down one route or the other in terms of the financing process. As you go into the detail is very different but ultimately at the end of the day I think they're both credible routes and I think the investment community have thought this through already and have come to a conclusion that this is inevitable and therefore they need to consider it. And yet sitting here in Scotland and reading the Scottish press and the views around, is it the right thing to do to have Chinese manufacturers based in Scotland? And I guess is it the right thing to do to have Chinese technology and strategically critical assets? It's still very much debated with lack of clarity, I would say. We're all watching what happens in the US right now where if a head of state doesn't like the right thing for a project they very much intervene. I know that's not going to happen here. I hope it doesn't happen here. But still there must feel pressure for you to also think about the geopolitical aspects to this. I mean, UK government have been very clear that they won't influence our commercial decisions. So I think that's actually fair and it's what they're very keen to underline. But you do have to think through the public perception of the project and what it would look like and it isn't an easy decision, you know, to stand in the way of an investment. In North East Scotland is something that we wouldn't want to be seen to be doing but at the same time again to be using too little Scottish and UK content could also be seen as detrimental. So it is a balance. But I think at the end of the day it's a commercial decision that will make based on which product we think is best fit for the project. So let's talk about Scottish content and then Scottish skills and jobs. So this project would require, I guess, a significant port infrastructure and a significant supply chain scale up and some new technologies. So what do you need from the supply chain? It will. It's a project which feels like it will appeal to both the oil and gas and the renewables supply chains. We're obviously in deep and quite mature conversations with a number of them. I think what we're feeling is and what we're seeing is and the way that we're trying to engage with that supply chain is to encourage collaboration. They've never really done this before. We've not done this before. No one's been down this route before and it's not going to be something where we would expect a supply to come along and have all the answers. It's more important for us for us to come along and ask all the right questions and that to us is worth a lot. And as you're entering into a financing work stream it's an uncomfortable position to not have what you typically like to see lump some pricing and fix scope. It's very uncomfortable not to have lump some pricing and fix scope at this stage of the project. But it also, we still need the innovation, the collaboration and the loose guy thinking to continue probably into the construction phase to make this project as low risk as possible. We'll have an engineering solution. We'll have a financial bull solution before financial investment decision but we may not have de-risked it to the point that we need it to be possible by the time we go fully into the construction phase. So we're looking for partners in the project which are thinking that way. They're thinking every day, how can this be improved and not telling us how it's going to be done because that's not credible to say that when it's a new industry. Listen, listen, listen, listen. First in the world of this scale. First is world, first is kind and it means a lot. So what will the kind be? What I mean is the submersible design for the structural platform itself? There must be a hundred designs out there that I've seen. Have you already selected the design that you're going to use and tell us about that? When I joined the project, we'd already, or those before me, had already narrowed it down to a number of designs that were all very similar. So they were all sent to column, which means the turbine sits in the middle rather than on top of one of the three corners, semi submersible substructures. So we've ruled out a number of attention-leg substructures and other varieties of substructures. So that was the only one that we are looking at. We believe that's the combination of ease of manufacture and also suitability for the conditions. That was the best one. We're looking entirely at steel, steel manufacturing. We're not looking at concrete structures, which are also another alternative for even these submersible structures. So they're all very similar designs. The challenge now is not so much the design of the floater. It's more the industrial capability of manufacturing these floaters in a way, which we can ensure that they are both cost-effective reliable, but also that they can produce them at the rate that we need them to be made, which is around one every couple of weeks. How many turbines are we talking about? We're talking of around 30 turbines plus or minus a few, depending on various factors. So these will be what size turbine in megawatt terms? We're looking at between 15 and 18 megawatt class of turbine at the moment. And so are they mass produced today, or would this again be a first-of-a-kind turbine for this first-of-a-kind project? The turbines we're looking at, there will be a new turbine or a derivative of a previous turbine of that size. Okay, and what about port selection? Actually, there's sort of four ports. There would be a port which we'd use for storage. That's both floaters and perhaps mooring systems. There's an integration port, which is where we connect the substructure to the turbine. There may or may not be a commissioning port, which is where they then go to to get ready to be shipped off of shore. And then there's an interesting concept, and this is an area that's been a bit of an innovation that we've considered on the project. I don't know where it's obvious, but when you build an offshore floating wind farm, the reason you build it as a floating wind farm is that it's very difficult to connect it to the sea bed because of the water depth, which also puts there a range of jack up vessels and maintenance vessels. So the options that you then have to maintain the turbines, especially if you have to exchange any major components is quite a challenge. So you either have to do it in situ, which involves sending something up the tower to remove components, which has not been done at this scale. It has been done at smaller scale, but that's an option, or you tow the whole thing back into port, and then you change the component out in the port, which is what the main assumption is today, isn't it? Is the lower risk squared doing it? Which is the base assumption? It's relatively simple and clean to do that, but what lets it down is the availability of a port and a suitable crane in the port to do that. So we're looking at a concept which goes back actually to, we talked earlier about the synergies of different industries and my experience in the offshore telecoms industry. There's an initiative there that's been around for a very long time of cable maintenance agreements. So numbers of cable installers and operators club together, and they have a collective maintenance base, where they store cables, and they have a ship on standby to repair offshore submarine cables. They work very well, and we're looking at a similar concept here, where there would be a, what we're calling a, an MCR hub, a major component replacement hub, set up on standby floating offshore wind industry to make use of, which would mean that when you bring a structure in to replace a component, whether it's routine or non-routine repair, that there's the facilities available for you immediately, and that reduces the downtime enormously. That's good collaboration, because we don't see that in the fixed bottom offshore wind market today, where there's collaboration, and the common port that all can use. Why doesn't that work in the fixed bed as well? It surprised me that that's not happened. I think historically, that 80% I think have insurance claims relating to offshore wind farms relate to cable failures. And I think that's still the case, although I think it's now export cables, rather than inter-array cables. Are you expecting the cable failure scenario to worsen with floating offshore wind much more dynamic environment? I significantly hope not. (laughing) That's a part of the risk profile, and I think the more you talk about it, the more you realise which is why it's great. You're here today talking about it, 'cause I think perhaps just assume it's just another turbine. You know, it's just a turbine that's floating, but it was the difference. So many differences. Are you an energy business looking to revisit your strategy? Did you know EIC's consult here? helped 50 businesses last year. How? We helped them with their strategic investment decisions using EIC's award-winning market intelligence and data to provide them with tailored, pragmatic BD strategies, presentations and reports. It works. Our data and insights have helped customers to confirm their decisions to export, diversify and grow. Contact us now to learn more about EIC's consult and begin your own journey to smarter decisions. Details in the description below. [MUSIC PLAYING] So let's just go back to the build side of it. So is the logic that, of course, you don't build it out at sea. You build it in port as a fully completed floating unit and then tow it out. Is that the logic? Yeah, I think for many years in offshore wind, it's always been the case that you do as much as you can on shore because that's cheaper. And you do as little as you can offshore. In this case, actually, the one benefit of floating wind is that that's actually more possible. So you assemble the turbine and substructure on shore. So you don't need a very expensive installation there, so either. That's right, you need a series of tugs. The port is your installation vessel, and you can tool in tens and perps is fully commissioned on shore. Because one of the big challenges with installation vessels is it's up there built and then suddenly the next turbine's bigger. And that's now obsolete and there's a bigger installation. So that's another benefit here. Once this industry scales up, a port will be able to handle larger and larger turbines in a much more readily accessible, readily scalable way. Yeah, that's right. The vessels you need to do the tow out and the hook up, yeah, relatively small vessels. And you don't have the road transport challenges because everything is sea transport. So it's interesting that you can imagine. Once this is at scale, this industry will have a lot of cost savings over fixed bed or fixed bottom of shorewind. OK, in the end, there are cost. So let's ask the question another way. Let's say go forward to ten years, where you're now building one, two, three gigawatt size floating offshore wind farms and it's an established industry. What will still be the aspects of that industry that make it more expensive per megawatt than fixed bottom of shorewind? It's a really good question. You know, we're moving towards gigawatt projects. And I said earlier, the UK's environment for investment in tow offshore wind is very good with the CFD process. But ultimately, that relies upon the LCOE of the projects reducing down to a point where it's domestically viable for that to happen. For gigawatt floating projects, that still will involve some significant cost reductions. The substructures inherently will always be bigger than the substructures on further insure fixed bottom projects. I can seem looking forward a bit of a step change in the design of substructures. I think we are in a place where there's some significant improvements in the substructures, but I don't think they're ever going to be comparable to fixed bottom substructures. The route, the distance to shore, I mean, I assume it gets deeper as you go further offshore and therefore the cable connection will be longer. But having said that, there's a lot of fixed bottom projects which are in quite a long way from shore. I think the turbines are reasonably similar. And once the turbine suppliers are supplying turbines which are floating the design for the floating environment, they will be much the same. I think then you start to think that everything else can start to look a lot cheaper. You're putting these in areas which are less congested, putting these in areas that have higher wind speeds and you're putting these in areas whereby they can be built on much larger scales because they're less congested. And not just higher wind speeds, but many more wind days per year. That's right, that's right. Most projects these days fixed bottom ore, floating have SOVs, so the technicians are offshore anyway. And the predominant amount of the project construction is on shore. So it is quite like, you know, it makes a lot of parallels today about the oil and gas industry and it is, you know, Scotland is very well placed to service these types of projects because of the port facilities that they once have and still have available now to be reused for renewables. And fleets of vessels which are very well placed actually for floating offshore wind projects as well. So how important is the oil and gas industry in Scotland and its longevity, its criticality of key skills in oil and gas that are transferable to offshore wind? How important is it that that is a focus of policy makers to protect it for your future project capability? Or do you feel like, okay, if it moves abroad because there's an anti-ion and gas policy today, then you'll be able to import what you need. It's a really good point. I mean, I think there's three things in play. Just in that question, there's the future of the oil and gas industry in Scotland and the UK and there's the future of projects like GreenVolt and large scale, the gigawatt scale projects in the offshore floating industry which we hope to seed. And then there's a compatibility between the two and the transition of jobs facilities, vessels, workforce, companies, supply chain between the two. I think at the moment there looks like there could be a bit of a gap. I think policy looks like it's creating a situation whereby a downturn in North East Scotland's supply companies is saying, "never to blow." I'm not sure if that's controversial. The scope of the work that you've got is actually up to 1.9 gigawatt, isn't it, as a total joint venture scope, including, yeah, including Senos. So do you see that if this project doesn't get the full bankability and the full support of the whole energy industry that that puts at risk future projects as well? Or again, do you see this as having it a sort of its own unique journey? I see it the other way around a bit. I see it as we can unlock the potential of floating offshore wind by meeting a huge number of the challenges. We will be able to enable the upgrade of many of the ports. We will be able to hopefully instigate this major component replacement hub that we talked about earlier, which I think is a great initiative. We will hopefully be able to give the supply chain and everything from turbine substructures, vessels, the TNI electrical supply chain, a really useful case study to work on and to sharpen their teeth on in terms of producing something which is viable. All this is great news whether they're UK companies or whether they're foreign companies is all great news for the UK because it's there that they'll be using their skills and it's there that they'll be demonstrating that they can make this work. But I think there's other challenges which we won't be able to meet in the timescales that we have. I mean, the CFD process, the allocation round process is ultimately time constrained as milestone dates, which we have to meet. And so regulation almost certainly won't keep pace with it. And therefore I think we'll work around that. But I think for the industry to be successful that will need very urgent consideration. There's so many things in your scope, fascinating discussion by the way. Thank you so much for sharing everything you're working through. And very much is a sort of nascent technology and you're just here and it's now and it's in Scotland. What a chance for everybody to work together and make this happen. So I'm sure every listening is like, okay, how can we help? So I think the two questions are kind of final questions. So one is, so what do you need? What are the things that are going to get you to FID? It's just to be very clear, what do you need to get to FID by the end of the year and what do you actually not need to happen? And then the second question and then how can the supply chain participate? Good questions. I think it's a question of risk management this year. It's a question of the investment community and the technical communities coming together and satisfying one another that they have adequate levels of assurance that what we're planning to do over the years from 2027 to 2030 are achievable. And I think there's every indication that that's the case otherwise we wouldn't have got this far what can go wrong and significant changes in policy or significant changes in regulations could still get in the way. Such as such as there's a little bit of clarity required on consenting of these types of projects. There's an interpretation of how we can move these large components around which is unclear and we hope the interpretation that we have is one which is adopted and seen as correct. Who does that sit with? The Scottish Government and the re-indirective. Who were very supported by the way? No, I mean this isn't about trying to name and shame, it's just about trying to understand, you know, for a critical project like this what you're going through and you know what you're still facing. That's been a surprise and one which has concerned the shareholders somewhat that we currently marching forward into a period of time when we are asking them for significant contributions and commitments to the supply chain but without the grid connection which matches our CFD. So we have been quite vocal around that topic. Who is the grid utility company that's going to have to do that? It's SSEN but it's not with them. I mean we're fairly sure that the grid connection is capable of being upgraded from 300 to 400 I think the 100 megawatts is not significant for that interconnection point but it's the process around that of having that confirmed which is the one which has caused us some concerns over the last few months. This is pretty fundamental issues you're talking about here so it's good to understand them and talk about them and. I don't think so. I mean I think everything else I would put down to sort of normal background noise of these types of infrastructure projects. There's a lot of which there's many but we can work through those. I think the last part of the question is around you know what can the supply chain do. And I think it's about their appetite for this industry to be as success as much as ours. We'll all come out of this. I mean our shareholders are making a significant gamble in it and if it can invest into something which has never been done before they're up for the challenge but we're asking for partners to collaborate with us in a similar mindset. To take this forward, to think about the bigger picture, to think about the future, to think about what this can mean for renewables for Scotland and the wider industry and to help us make it a success so you know and that will be a journey and one which will be hopefully a positive trajectory in terms of a journey one which will solve a lot of problems but it certainly won't be something that'll be based on existing thinking. And the supply chain though they have to wait for FID really now so the supply chain you've already engaged with they already know who they are but now to go to the next step we need FID and then suddenly it all happens. That's right that's right that's certainly the big catalyst to getting this product off the ground as the point of their return. And I think that's sometimes what surprises even policy makers but certainly those that are kind of not detailed involved into the major infrastructure projects is we read all the time about Greenvalt Greenvalt got CFD and there's an assumption that it's just happening there. No no no this is just getting to the point of reaching FID. It enables you to do all of the development work to get to the decision for financial investment decision and find an investment decision. FID is unfortunately a much harder threshold to get past isn't it? That's right it is much how a threshold it would be a lot of money at stake and it's not easy. All the risks will have to be manageable and it is the point of no return. And how many jobs do you think will be created if this project is built? We're looking at around 2000 jobs being created during the construction phase. That's I think a fairly conservative afterment and it'll be across all the different areas of the supply chain that be created and secured by that construction phase. Moving into the operational phase, it's a more modest amount directly employed around a hundred but I think I've seen in the past with projects that I've constructed in the past that the secondary indirect consequences of a project like this. And the redevelopment of key sides and ports which you kind of leave in your wake is is actually a really important part of the legacy of these projects. And the jobs which policies today assume will be there for the iron and gas workers of today. 'Cause it's a kind of gross value. Either GVA is estimated at two and a half billion pounds just from this one green bolt project as well. So, and then the export capabilities if we could create a supply chain here and operate a capability here, which has proven become the world leaders in this amazing technology. Which net zero won't happen, I think, commentators would agree. Floating offshore wind is central to net zero 2050 being achieved around the world, not just in the UK. Absolutely, and there's a number of big economies which were completely reliant upon loating offshore wind. Such as Japan. Exactly. (upbeat music) It's been absolutely brilliant, mate. I hope that's not been too challenging 'cause I wanted to really get into the detail of it. Thank you so much for sharing. Been a pleasure. Any final thoughts? No, I'm really looking forward to this year. We've talked a lot about engineering. We've talked a lot about finance and this is the year they come together. So, it's gonna be really interesting to see how that happens. And I think the other important point about green bolt is it's not obvious from everything we've said. It's a showcase project that is for the industry as much as it is for our sponsors. So, if anybody wants to learn a bit more about the details or get involved, just get in touch. Okay, well, we'll put the details about green bolt and the two partners in the show notes. So, Matt, thank you again. Love you to see you. - Nice show. - Best of luck. - Yep, great, thanks. Well, that's our show for today. A huge shout out to Samara, Lucas and Jowell. And the rest of our incredible team behind the scenes. This show truly wouldn't happen without them. If you enjoyed this podcast, it would mean the world if you'd hit that follow button. Give a five star rating or leave a review. It's the best way to help us keep doing what we love. And as a thank you, I'll leave it with my favorite five word joke. Love win power, big fan. (upbeat music)