China advances UK offshore wind ambitions as $4bn project gets investment green light

Chinese ambitions of moving into Europe’s offshore wind sector received a boost today (Monday) when the consortium behind Scotland’s 1.1GW Inch Cape offshore wind farm announced a final investment decision on the project in the UK North Sea.

Financial closure for the project covers more than £3.5bn ($4.4bn) of capex, including £2.7bn in project financing.

Terms for the project financing, which includes transmission asset costs, have been reached with lenders comprising 22 banks.

The 50-50 joint venture between Chinese-owned Red Rock Renewables and Ireland’s ESB, will now progress from procurement into its offshore construction phase, the developer said.

The wind farm, which is scheduled for completion in 2027, will comprise 72, 15 MW Vestas turbines on a mix of monopile and jacket foundations, a single offshore substation platform and two 85km AC export cables delivering power to an onshore substation under construction at Cockenzie, East Lothian.

Prior to Inch Cape, Chinese involvement in UK offshore wind projects had been limited to minority stakes.

These include the 30% stake that a consortium led by China Resources Group acquired in the Equinor-led 402MW Dudgeon offshore wind farm in 2017, then Red Rock Power’s own move in 2021 to acquire a 25% stake in the 588MW Beatrice offshore wind farm, under development by UK utility SSE.

Red Rock Renewables is the Edinburgh-headquartered subsidiary of Red Rock Power, itself a unit of Chinese power giant SDIC.

Progression from minority stakeholder to a leading role in developing offshore wind projects mirrors an approach often taken by Chinese companies participating in international oil and gas.

In Brazil, for example, Chinese companies have taken minority stakes in projects operated by local and international oil companies in order to build up know-how and experience on big offshore oil projects. This eventually led to leading Chinese companies such as CNOOC and CNPC qualifying as operators.

'Major milestone'

“Reaching this major milestone of financial close is a significant achievement for ESB, Red Rock Renewables and the whole project team," said Paul Lennon, Head of Offshore Wind, Hydrogen and Long-Term Storage at ESB

"We look forward to entering the main construction phase and safely delivering this project over the coming years. Inch Cape will make a significant contribution to the UK climate goals, while creating local jobs.”

Xiaomeng Chen, Red Rock Renewables CEO described reaching financial close as a "monumental milestone" for the partners.

"This success is a testament to the efficient design and cutting-edge technologies employed by the project, highlighting our resilience and commitment to making it one of the largest green investments in Scotland while contributing to the UK’s net zero goals," he said.

Inch Cape has a 50-year lease with Crown Estate Scotland and secured 15-year contracts through the UK government’s Contract for Difference (CfD) auctions of 2022 and 2024.

Inch Cape Project director John Hill said described it as "the largest infrastructure project currently in construction in Scotland.”

Offshore construction is due to begin in the second quarter or 2025 with the start of installation of the export cables and followed by the installation of the offshore platform.

First power is expected in late 2026, a year ahead of the commercial operation date.

Orders in place

Inch Cape won a UK power deal during the 2022 contracts for difference process for a rate of £37.35/MWh (at 2012 prices). Most of its long-lead orders are now in place.

In December, the Inch Cape (ICOL) consortium confirmed an order to Vestas to supply 72 of its V236-15.0 machines. Inch Cape is likely to become the first UK project to use the Danish company’s 15MW turbine.

A consortium of NKT and Boskalis was chosen to supply and install export cables and, more recently, Dutch subsea cable manufacturer TFK was chosen to supply 66kV inter-array cables with a total length of 152km.

ICOL also booked capacity for the fabrication of XXL monopile foundations with Chinese manufacturers Dajin Offshore and CNOOD-Wenchong Heavy Industries (CWHI).

The developer appointed Siemens Energy and a subsidiary of Smulders, for the supply and build of its onshore and offshore substations.

Construction of the offshore substation jacket foundation and platform is nearing completion at Smulders’ Wallsend facility in the UK.

Seaway7, a division of Subsea7, is expected to start transport and installation of jacket foundations and transition pieces in 2026.