New offshore wind also requires investment in onshore bases

First published in The Herald.

All offshore wind farms need maintenance throughout their working lives. That requires warehouses, workshops, offices and transfer vessels – and, of course, the people who work in them. All of this Operations & Maintenance (O&M) infrastructure needs to be based in a nearby port. To achieve our net zero goals, we will need to build many more of these O&M bases, and/or significantly enhance the existing port infrastructure.

The usual approach is to work with an existing harbour: install pontoons for the transfer vehicles and construct new buildings around the quayside facilities. This may seem quite straightforward, but there are in fact many legal issues that need to be carefully considered whenever a harbour and a developer are discussing contractual terms. A key factor is often the legislation that governs the harbour’s operation. Here are some examples of the relevant factors.

If the developer wants exclusive possession of water areas at the port, does the harbour’s legislation permit this? If not, these rights may have to be acquired from Crown Estate Scotland and then passed on to the developer.

Will the developer pay the statutory published tariff of harbour charges, or is it able to negotiate a special deal? (And again, the harbour legislation may not permit this.) Will any special deal cover all varieties of charge? Is there an agreed mechanism for indexation of the charges throughout the O&M base’s working life, or for reviewing other aspects of the deal?

Is the harbour obliged to dredge to accommodate the developer’s fleet? If so, how often, and has a dredging depth and plan been agreed? If necessary, can the developer carry out dredging itself? Most legislation prohibits dredging by anyone other than the harbour or its licensee. Also, the deposit site and parts of the harbour bed are typically owned by Crown Estate, requiring a separate licence.

The developer may need a ‘works licence‘ from the harbour before installing pontoons, linkspans, navigation lights, cranes and so on.

The parties will need to agree a level of loading on existing quays, below which the harbour is liable for any damage (and, above that level, the developer is liable.)

Will the harbour supply water and electricity, and provide a waste removal service? If so, how will this be charged, both now and in future? And what is the harbour’s liability if it fails to meet its obligations?

The developer will want the harbour to retain liability for maintenance of existing infrastructure such as quays and breakwaters. If the harbour defaults, the developer will want to be able to carry out the works itself, and then deduct the costs from its rent.

Is pilotage compulsory for certain classes of vessel, and will this affect the developer’s fleet? Delays are very expensive: can the harbour’s pilotage service deal with the extra traffic?

It is best to agree early what other rights the developer will have in connection with parking, installation of fuel tanks, road access, water access, and fencing and security.

A long-term commitment

A windfarm will have a long operating life and therefore long-term O&M needs. An individual turbine should typically last for twenty or thirty years (and potentially longer if repowering is undertaken), and the O&M base clearly needs to last just as long. Accordingly this is a long-term commitment between the port and the developer, and the O&M arrangements need to be fully documented.

All of the aspects of the deal referenced above (and others) will need to be carefully considered by both parties before signing the contract. Futureproofing projects at this stage is the best way to avoid costly disputes, delays and other unpleasant surprises.

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