RWE, Orsted and SSE clash in wind theft hearing over huge offshore projects

RWE, Orsted and SSE faced off in a crunch wind theft hearing over 12GW of Dogger Bank and Hornsea offshore wind projects, with lawyers trading barbs of opportunism, extraordinary demands and “real violence to the English language.”

The arguments were traded last week between the three heavyweight offshore wind developers in a planning hearing for German power giant RWE’s Dogger Bank South project.

RWE is seeking a development consent order (DCO) for Dogger Bank South, which is split into two 1.5GW phases and counts Emirati renewables giant Masdar as a minority shareholder.

SSE, Equinor and Orsted are demanding that RWE mitigate wake losses its Dogger Bank South project will cause their own – such as by reconfiguring the turbine layout or paying compensation, or both.

Similar disputes are being fought concerning at least six new offshore wind projects currently seeking DCOs in the UK, with thousands of pages of submissions being traded over novel and thorny issues that developers – and examining authorities – are having to grasp.

RWE: Compensation demands ‘extraordinary’

Although wind wakes have been known about for a long time, the issue of inter-farm wake losses has gained much more prominence in the last year, not least through the high-profile clashes between heavyweight developers in UK planning proceedings.

“I've been doing this for 20 years,” Julian Boswall, a planning partner at Burges Salmon representing RWE, told the examining authority in last week's hearing. “There's nothing comparable to this in terms of a new issue emerging that has gone off in a completely unexpected direction and has created the amount of complexity and concern that this issue has done.”

There is “absolutely no track record” of offshore wind developers being made to pay compensation for wake losses, he said. “Extraordinarily, there's the suggestion” that payments “running into potentially hundreds of millions of pounds are suddenly coming into view.”

There is also no track record for ordering mitigation, he said, apart from a groundbreaking order made against RWE’s Awel y Mor project in the Irish Sea in 2023.

But if RWE is being urged to engage over potential mitigation solutions for wind wakes, there “has to be something meaningful to talk about,” he said. RWE argues that mitigations techniques, such as reconfiguring turbine layouts, ultimately do more harm than good.

He noted a submission from Orsted that made a “slightly surprising reference” to a “national scheme” for mitigation and compensation of wake losses.

That “could be taken to imply” there is a proposal for such a scheme, said Boswall. “There is no proposal that we are aware of or that,” he said, adding that it was important for the examining authority to understand “there isn’t something bubbling away” in this regard.

If SSE, Equinor and Orsted had wanted to publicise their concerns over this issue, “they could have done so,” said Boswall. “They could have been writing thought pieces and attending conferences saying in a planning context, you know, you developers should be doing X, Y and Z.”

“Instead, they have sat back. The reason they've sat back is because they weren't expecting the Awel y Mor decision,” he said. After that was issued, they have sought to “take advantage.”

Much of the argument in this regard is based on wording in National Policy Statements that warns that new offshore wind farms must take steps to minimise economic loss or any adverse effect to “other offshore industries,” said Boswall.

“It's doing real violence to the English language to suggest that that can somehow include other offshore wind farms.”

SSE: ‘We have not been sat on our hands’

Appearing for SSE and Equinor, CMS partner Robert Garden pushed back on the suggestion that the developers have been “sat on their hands” on wake losses during the planning process, arguing that they have repeatedly raised the issue throughout.

It is important to remember, said Garden, that the Dogger Bank projects won their Contracts for Difference during the AR3 auction in 2019, which at the time was the most competitive auction round for offshore wind.

The scale of the wake losses these projects may now suffer, £582m, is he said “significantly greater scale than any of the other projects which are currently going through the examination process.”

The loss of revenue, if left unmitigated and uncompensated, would likely represent a “material risk to the future commercial viability of the projects”.

The wake losses are so severe there are risks of the projects “defaulting on loans due to reduction in cash flow,” said Garden, as well as “risks of impact on shareholder confidence.”

Garden also claimed that the three Dogger Bank sites are effectively “three phases of one project,” so an impact on one phase could have “knock-on impacts on one of the other projects.”

Boswall, for RWE, countered that it was “massively contentious” and "very surprising" to claim that a threat to one Dogger Bank phase entailed a threat to the others. "It's not at all clear how that argument can possibly be stacked up."

Orsted: New wind farms can’t come and ‘pull the rug’ on existing ones

Pinsent Masons associate Alex Tresadern, representing Orsted, insisted that the planning process offers the “only time-bound, legally secure way” to ensure projects impacted by wake effects are protected.

It is also important to ensure that “precedents aren't set, whereby a new development can come in and pull the rug from an existing development without appropriate compensation.”

Compensation is “likely to be necessary” to address residual impacts of wake effects that cannot be addressed by physical mitigation, he said.

He also warned of leaving the issue of mitigation and compensation for developers to resolve outside of the planning process, as has been suggested. “Without the planning lever, there's a risk that offshore wind projects will be materially, commercially impacted by waking projects with no recourse.”

In a sign of just how prominent the issue now is in the upper echelons of the UK establishment, inter-farm wake losses were identified as a problem in energy secretary Ed Miliband’s Clean Power 2030 plan released last year.