Net Zero – Green Finance Community Hub

Cumbria’s Offshore Wind Potential

Posted on September 28, 2023July 1, 2025 by Green Finance Community Hub in Community Energy, Community Finance, Net Zero, Offshore wind, Renewable Energy, Sustainable Finance

By Ciara Shannon

Reaching net zero by 2050 is “narrow but still achievable” because of the staggering growth in clean energy technologies, so says the IEA. IEA’s recent updated Net Zero Pathway calls for a tripling of global renewable power capacity (in particular, solar and offshore wind), a doubling of energy efficiency improvements, a steep rise in EV cars and heat pumps and large reductions of methane in the energy sector. Taken together, these measures could account for 80% of the emissions reductions by 2030.

Offshore wind – the spine of the UK and the world’s future electricity system

The UK is already home to one of the largest offshore wind sectors in the world (second only to China, followed by the USA and Sweden), providing about 14% of the UK’s electricity generation (or 12.7 GW). In the future, offshore wind is widely expected to become the spine of the electricity system and the Climate Change Committee (CCC) has suggested that by 2050 the UK may have between 65 and 125 GW of offshore wind capacity. Likewise, the National Grid ESO’s Future Energy Scenarios 2022 ‘Consumer Transformation’ scenario projects offshore wind increasing to 110 GW by 2050, providing 56% of total domestic generation.

In line with this, scientists at Oxford’s Smith School of Enterprise and the Environment recently estimated that solar and wind farms could “easily” power the UK by 2050 and suggest that 73% of the energy could come from offshore wind farms, with solar providing 19%. Professor Cameron Hepburn of Environmental Economics at the Smith School of Enterprise highlighted that while it’s likely that nuclear power and other renewables will have a part to play, their analysis finds that it’s entirely possible to power the UK on wind and solar alone.

Reduce the bottlenecks

The Government is aiming for 50 GW of offshore wind by 2030, including up to 5 GW of floating wind and this is expected to drive £155 billion of investment in the UK, supporting around 100,000 jobs. (Source: RenewableUK, February 2023).

But right now, challenges such as high inflation, rising interest rates, low auction prices and the excessive time it takes to gain planning permission and to secure a grid connection, are creating bottlenecks and putting this target and the government’s 2035 target to decarbonise the electricity system at risk. As a ball park, the development and deployment of offshore wind farms can take up 13 years, of this, around 3-5 years is needed for planning and consenting. (Source: Renewable UK, 2022)

Delays in grid connection is one of the greatest risks facing all new energy infrastructure especially renewable energy. Currently, more than 600 renewable energy projects are waiting in queues of up to 13 years to begin operation. These delays come at a cost. According to EnBW, for every year that the grid connection to their Morgan and Mona offshore projects (developed in partnership with bp) is delayed, a minimum additional £462m of DEVEX, in the form of option fees, will be incurred.

As noted by National Grid, more than five times [than has been built in the last 30 years] of transmission infrastructure will need to be installed to decarbonise the power system by 2035. This includes investing in sub-stations to connect offshore wind farms to the onshore network, as well as more pylons and electrical lines to move energy around the country.

Another solution, as set out by National Grid ESO, is the Holistic Network Design (HND) which is based around the connection of 23 GW of offshore wind being connected by the end of the decade, and includes projects that secured seabed leases through The Crown Estate’s Offshore Wind Leasing Round 4 and Crown Estate Scotland’s ScotWind Leasing Round. The HND would bypass onshore grid bottlenecks by coordinating wind farms to share transmission lines offshore, before they are connected to the grid. For example for the North West region, there could be an offshore connection between Scotland, Cumbria and Wales via a high voltage undersea direct current (HVDC) cable, with potential for other projects to connect in the future.

Calls for reforms to the UK government’s contract for difference (CfD) mechanism are also growing louder. Just recently, we saw the CfD auction round (AR5) fail to bring forward any new offshore wind projects. Up to 5GW of offshore wind was eligible to compete in the auction – but no offshore wind developers took part after many complained that the maximum price (£44 per megawatt hour (MWh)) was too low to account for cost increases – largely due to inflation and hikes in capital costs. Instead, new capacity was secured by onshore wind and solar and a small amount of tidal projects and, for the first time, geothermal.

Earlier this year, Sweden’s Vattenfall scrapped their plans for a giant offshore windfarm off the Norfolk coast because rising costs meant it was no longer profitable. The company bid a record low price of £37.35 a megawatt hour (MWh) for the electricity generated.

The future is local – Local Area Energy Plans

We agree with Chris Skidmore’s MP recent report that ‘The Future is Local’ and whoever forms the next government, greater devolution to help drive local net zero plans is needed. The report suggests a Local Net Zero Charter and the importance of Local Area Energy Plans across the UK. It also recommends developing a local Net Zero Delivery Framework to enable collaboration between UK Government and local and regional authorities, using the Local Net Zero Forums.

Make the most of Britain’s Energy Coast

Along Cumbria’s coastline there are eight offshore wind installations bringing major business, investment, and job opportunities along with it.

Offshore wind has been making an impact in Cumbria since 2006. Official data for offshore wind generation is defined by where the supply ‘lands’ – Robin Rigg (East and West)- is located midway between the Galloway and Cumbrian coasts in the Solway Firth in Scottish waters, but ‘lands’ in Seaton near Workington in Cumbria. This is in contrast to Walney 1, 2, 3, Ormonde, Barrow, and West of Duddon Sands wind farms, which, though an important part of Cumbria’s renewable supply, reach land in Lancashire.

Less well known is that as part of the consenting process for the Robin Rigg Wind Farm in the Solway Firth there is the Robin Rigg Community Fund, funded by RWE. Grants are available to community groups and organisations on both sides of the Solway area.

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Barrow and Workington ports provide significant offshore Operations & Maintenance (O&M) with this set to expand with the new Mona, Morgan and Morecambe offshore wind proposals. According to the Offshore Renewable Energy Catapult, the UK offshore wind operations and maintenance market will grow faster in relative terms than any other offshore wind sub-sector market over the next decade.

Socio – economic reliance on the nuclear sector

Despite Cumbria’s significant offshore wind and maintenance contribution, West Cumbria’s socio-economic identity remains deeply tied and very reliant on the nuclear sector. In 2021, Sellafield and the Low Level Waste Repository (LLWR) generated £1.30 billion of GVA across the local economy, equivalent to 40% of the area’s total GVA. In total, Sellafield and LLWR supported 21,650 jobs, or 28% of total employment, including more than 11,000 jobs in the supply chain. (Source: The economic contribution of the NDA to the West Cumbria economy, April 2022).

There are also several plans, with investors ready and waiting, for Small Modular Reactors (SMRs) to be deployed in West Cumbria. As well as plans for the Dean Moor Solar Farm and battery storage facility with enough renewable energy to power over 50,000 family homes every year. Plus, there’s an approved green hydrogen plant in Barrow that will supply hydrogen to Kimberly-Clark from 2025 and the MNZ (Morecambe Net Zero) Cluster has taken further steps forward to convert the North and South Morecambe gas fields for carbon capture and storage.

Project Collette – shared prosperity for all

Cumbria could be making much more of its windy coast and we hope innovative projects such as Project Collette which aims to be a 1.2 GW (with 80-100 turbines) community owned wind farm off the coast of West Cumbria, will be taken seriously and embraced by the local community. If successful, Project Collette would be England’s first community owned offshore wind farm, and it would be Cumbria’s first offshore wind farm with its supply also ‘landing’ in Cumbria. Collette’s renewable energy would be used to decarbonise the local area, support green hydrogen projects at Carlisle, Workington, and Whitehaven and green steel opportunities in Workington (or its surrounds).

Click here to read about Project Collette in more detail. If successful, all of these plans could lead to Cumbria becoming a strategically important center of clean energy generation, and a significant contributor towards the UK’s net-zero ambition.

Harnessing Low Carbon Hydrogen – Market and Investor Risks Remain High

Posted on February 16, 2023July 1, 2025 by Green Finance Community Hub in Green Investments, Hydrogen, Net Zero

By Ciara Shannon, Green Finance Community Hub

This week, it’s been exciting to see the first ever UK Hydrogen Week celebrate some of the many hydrogen projects in the pipeline. The buzz is testament to the growing momentum of hydrogen’s potential to decarbonise a range of hard to abate sectors such as long-haul transport, chemicals, fertilisers, iron and steel.

To be clear though, right now, most hydrogen production is fossil-fuel based and the UK currently produces and uses about 700,000 tonnes of hydrogen per annum. Very little – if any – so far is low carbon.

But things are moving very fast with demonstration projects being announced almost every week. The government is investing up to £240 million via the Net Zero Hydrogen Fund and is developing an investor roadmap, business models and has outlined plans for a globally recognised low carbon hydrogen certification scheme. The European Commission has also published its definition for green hydrogen that now clearly states that nuclear-derived hydrogen – pink hydrogen – will not be labelled as “green” within the European taxonomy.

Getting “green” status is seen as a way to help unlock billions of pounds in funding for the nuclear industry. But, in the UK it is not yet clear if nuclear will get this status. The UK’s Nuclear Industry Association thinks that the UK should follow the science and label nuclear as green in its sustainable finance taxonomy to make it “cheaper and easier to finance nuclear projects from a wider pool of capital and (according to them) the UN confirms nuclear has the lowest lifecycle carbon, lowest land use, and lowest ecosystem impact of all electricity generation technologies.”

Long Term Reassurance on Cost and Viability Needed

In the UK – according to the Green Finance Institute (GFI), growing the UK’s green hydrogen industry could generate a cumulative GVA of £320 billion by 2050, including £250 billion of exports, and up to 120,000 new jobs by 2050.

Before this can happen, there is still a lot of work to do to find the most economical way to produce green hydrogen and as hydrogen is currently a nascent area of energy policy – better long-term funding, and policy reassurance is needed to support early producers and users of green hydrogen.

If they get it right – the rewards will be substantial. According to research done by the RMI [1]for the EU, supporting early producers and users of green hydrogen: spending up to €15 billion to offset investment risks, between now and 2030 could generate more than 20 times as much private spending on advanced clean energy technologies.

First Mover Risks – Hacking Through the Thorns?

First mover risks

The “first mover disadvantage”is presently a major barrier to scaling up quickly. For example, for early movers investing in the current high electrolyser costs could make these projects uncompetitive in the future. At the same time, to be financeable, a hydrogen project must also have an off-taker, but right now, for off-takers the risk is signing on to long term contracts that could lock them into paying higher-than-market rates in the future.

Green hydrogen is still 2-3 times more expensive than blue hydrogen (produced from fossil fuels with carbon capture and storage). Most hydrogen forecasts show cost parity between green and blue hydrogen somewhere between 2030 and 2040 and falling technology costs and rising carbon prices will ensure green hydrogen outcompetes fossil alternatives. [2]

Multi-Coloured Hydrogen Opportunities for Cumbria

The North West of England has the industry, infrastructure and innovation to make low carbon hydrogen energy a reality and Cumbria has significant potential to contribute to this opportunity.

In our Green Investment Plan for Cumbria – that was initially created to look at alternatives to the coal mine – we commissioned Arup to consider more deeply an emerging hydrogen strategy for Cumbria. Firstly, this included a large-scale, grid-connected green hydrogen production facility located at (or near) Harker, north of Carlisle. This would provide a means to overcome England/Scotland’s grid constraints using the strategic road network to distribute energy, whilst unlocking the expansion of further onshore renewables.

Second, the plan is to use surplus power from the existing Robin Rigg offshore wind farm (in the Solway Firth), to generate green hydrogen and oxygen from an electrolyser located near Workington, adjacent to a wastewater treatment plant. The final effluent (treated water) from this plant would provide the water input to the electrolyser, and surplus electricity from the wind farm would be used to split the water into hydrogen and oxygen. The innovation proposed at Workington demonstrates a ‘circularity’ in energy use that could be replicable across the country at wastewater sites.

Project “Collette“

Third, at the heart of our thinking on green hydrogen in Cumbria is Project “Collette” (as in collective) which would be a 1.2 GW community-focused offshore wind farm that would use excess power to produce green hydrogen, and this would create, effectively, a storage buffer to deal with the intermittency of wind as a means of transfer of energy to shore. We calculated between 850 and 1100 Kt C02e of savings each year and these savings could be enough on their own, to significantly contribute to savings needed for Cumbria to meet its net zero targets. An essential component though is ‘Anchor’, high energy users or off-takers, that offer a ready market for green energy generation, thereby underpinning the investment rationale either for the community, for the business or in a partnership.

The giant among such potential off takers in Cumbria is Sellafield, but there are many other large companies, institutions and utilities with large buildings and energy demands such as United Utilities, Electricity Northwest, Stagecoach, BAE Systems, Westmorland General Hospital. All of these have a decarbonisation agenda and offer potential hydrogen investment opportunities with a community element.

Moving All Things Forward at Once

At this early stage of low carbon hydrogen production, all methods, and technologies for producing and using hydrogen should be explored to get the market moving. But most hopes rest on “green” hydrogen.

Excitingly, already in development, is Carlton Power’s Barrow-in-Furness green hydrogen project that would supply hydrogen directly to Kimberly-Clark’s paper mill along with other industrial off-takers in Barrow and the wider area. The project is initially expected to be 35 MW produce 3500 tonnes of hydrogen every year, with expansion capacity planned as demand grows. [3] Carlton Power is a good example of an organisation taking first mover risks, as detailed earlier and as described in our recent podcast[4].

In Cumbria, in addition to its green hydrogen potential, it is very likely that new nuclear generation including small modular reactors (SMR) will be able to deliver pink hydrogen by the next decade.

More controversially, there is also the Morecambe Bay Gas Fields with the Barrow Gas Terminal operated by Spirit Energy that offers a blue hydrogen opportunity with a massive carbon use and storage (CCUS) potential. Importantly, hydrogen allows vast quantities of clean energy to be stored for long a duration for use in peak demand and seasonal energy balancing. [5]Then there is the ongoing testing by DNV at Spadeadam in Cumbria that is working on building up the case for hydrogen in domestic heating.

Potentially, Cumbria has many investable hydrogen projects to help jumpstart the UK’s hydrogen economy and given Cumbria’s significant net zero revenue and job creation opportunities, it makes little sense that a coal mine has been approved as part of the mix.

[1] Source: https://rmi.org/tackling-investment-risks-to-accelerate-green-hydrogen-deployment-in-the-eu/

[2] The cost of green hydrogen production is quantified using the levelised cost of hydrogen (LCOH) and this is driven by different technologies and scenarios for production. Green hydrogen is made by the electrolysis of water powered by renewable energy sources; it does not produce CO2 and so is the ‘cleanest’ option

[3] Source: https://www.carltonpower.co.uk/news/kimberly-clark-and-carlton-power-enter-partnership-agreement-to-launch-breakthrough-green-hydrogen-project-in-barrow

[4] Listen to our podcast – Harnessing Low Carbon Hydrogen – Hacking Through the Thorns? Click – https://apple.co/3E8i8lm. (recorded Jan 19, 2023)

[5] Hydrogen can be stored in salt caverns, depleted gas fields or as compressed gas or liquified at various strategic points.