From an early stage, The Crown Estate has signalled its intention to trigger economic development in the Celtic Sea region, loosely defined as off South Wales and South West England. The Crown Estate’s thinking has evolved in the past year and its Information Memorandum, published last week, shows that it has selected aspects of the UK Government’s Social Value Model (SVM) as a scored part of the Invitation to Tender – Stage 1. Bidders will be required to submit a series of Celtic Sea plans to achieve outcomes in ‘certain areas’:
- An apprenticeship plan
- A skills development plan
- NEETs (not in education, employment or training) plan
- A community impact plan
- A community engagement plan, and a
- A volunteering plan.
The eagle eyed among you will have noticed that there is no mention of job creation or supply chain, but developers would be wise not to breathe a sigh of relief to quickly. The first two Celtic Sea plans can only be completed with some understanding what a developer (and its suppliers) will be buying in these ‘certain areas’ and how many workers will be needed. For example, if a developer is to have a coherent plan for achieving 3.5% of the project workers as apprentices, it needs to know what types of work will be needed and how many people each uses.
So there is some overlap with the current Supply Chain Plan requirements for CfD Allocation Round 6. An important difference is that for SCPs, it is possible in many areas to package existing activities creatively to meet the criteria. The IM’s requirement for a ‘plan’ rather than a description of activities is likely to require a blank sheet of paper, starting from first principles. This will take time. As well as the skills work, plausible community of volunteering plans require an understanding of local communities. Fortunately, developers have a little over a year to submit ITT1 but it would be wise to make a start ahead of the ITT1 launch in August 2024.
While there is much work to be done, those hoping for a stronger requirement to create local economic benefit are likely to be disappointed. For the moment, there are no absolute targets nor any incentive to secure local supply. Perhaps this is wise because Celtic Sea projects will need to be competitive, They will need to be able to secure CfDs and that means a lower cost of energy than, floating ScotWind projects and potentially fixed UK projects in the longer term.
