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Terms agreed for new tower plant at Port of Nigg

By: Tom Russell 03/12/2021 Global Energy Group

Foundations General Turbines Windfarms

Global Energy Group and Haizea Wind Group have agreed terms to build a £110m-plus offshore wind tubular rolling facility at Port of Nigg, located in the Scottish Highlands. Nigg Offshore Wind (NOW) will be a 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.

Subject to successfully achieving financial close, the NOW factory will receive substantial financial backing totalling £15m in debt from SSE Renewables, along with senior debt being provided (subject to due diligence and approvals) by Sequoia Economic Infrastructure Income Fund. Mainstream Renewable Power is 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 and the UK Government via the offshore wind manufacturing investment support scheme. UK Government funding is subject to the completion of ongoing due diligence.

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.

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.

The Port of Nigg rolling facility is designed to be capable of producing up to 135 towers per year as well as other 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 marshalling and staging work for turbine components and foundations (the marshalling and staging work already employs over 120+ people).

First Minister, Nicola Sturgeon, said: “We need bold, collective action to tackle the global climate emergency, and the growth of our renewables sector over the next ten years will be truly transformative, helping to deliver a just transition to net zero and a greener, fairer future for us all.

“This significant investment in Scotland’s energy sector is testament to the skills, expertise and innovation within our industry. We are delighted to financially support this cutting edge offshore wind towers facility, through Highlands & Islands Enterprise, as it reaches this significant milestone, that will deliver high value, green jobs and bring multiple benefits to communities across the Highlands and beyond while playing a pivotal role in delivering offshore renewables growth in Scotland and further afield.”

Tim Cornelius, CEO of GEG, commented: “The continued focus on a Just Transition to a carbon neutral economy has received fresh impetus as a result of the impact of COVID-19 and the Scottish and UK governments are looking for opportunities presented by the now inevitable energy transition from a dependency on hydrocarbons to clean and sustainable sources of energy, to create jobs and generate sustainable economic growth.

"The announcement today of a state-of-the-art tower rolling factory at the Port of Nigg can and will be a leading example of the ‘green recovery’ in action. It will create more than 400 direct long term, high-value jobs, and will offer our existing clients and new customers from around the world with the opportunity to buy ‘Scottish’ – meaning offshore wind developers can achieve their local content targets whilst helping the UK economy recover in a green and sustainable way. The facility will also create more than 1000 indirect jobs in the Scottish and UK supply chain. We are delighted to be partnering with Haizea who will bring their tower manufacturing expertise and knowledge to the Highlands of Scotland.

"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.”

Borja Zarraga, CEO of Haizea, commented: “Haizea is delighted to be partnering with GEG to develop a state-of-the-art tower rolling facility at the Port of Nigg in Scotland. We are recognised as world leaders in tower rolling technology and the UK is an important market for us to operate in. We know how important local content is for our clients and customers, and I am very confident that when the GEG reputation for manufacturing excellence and the physical location of the Port of Nigg is combined with our experience, client base, track record and know-how, we will together deliver best-in-class, cost competitive towers to the fixed and floating offshore wind market for many years to come.”

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.”

Mary Quaney, CEO of Mainstream Renewable Power, said: “Mainstream has consistently viewed the development of local supply chains as a vital part of the growth of Scotland’s emerging offshore wind sector. Today’s announcement demonstrates Mainstream’s commitment to investing ahead of the market to deliver practical, enduring and value-creating assets for the benefit of all in Scotland’s Just Transition to a #netzero economy. We are delighted to be able to work with Global Energy Group and all our partners, and to leverage our experience over the last fifteen years in offshore wind to create a sustainable supply chain for Scotland.”

Greg Taylor, Director of Sequoia Investment Management Company, said: "We are pleased to be involved with this important project, which will support the continued growth of the UK offshore wind industry, help create highly-skilled and well-paying jobs in the UK and further add to our portfolio of projects with positive ESG characteristics. We look forward to working with the Global Energy Group team and our other partners to support a transition to a carbon neutral economy.”

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Terms agreed for new tower plant at Port of Nigg

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