Irish supply chain primed to help UK meet ambitious 2030 offshore wind targets

The commitment of the UK offshore wind industry to work with the UK Government on an ambitious and transformative sector deal will require a significant mobilisation of the supply chain, and Irish companies are ready to go.

The ambitious industry plan presented by the UK Offshore Wind Industry Council (OWIC) highlights the sector’s plans to generate 30GW of offshore wind power by 2030, helping to power more than one third of the UK’s electricity needs and strengthening the UK’s position as the global leader in offshore wind. The 2030 vision will require a £48Bn investment in UK infrastructural spending and support upwards of 27,000 skilled jobs.

Irish companies are ready and well positioned to help the UK meet its 2030 targets and enhance economic growth. This was illustrated during a recent Enterprise Ireland and SSE Offshore Wind Exchange at SSE’s Glasgow office. An Irish delegation of 15 companies met with senior SSE executives to discuss SSE’s future project plans, the direction of the UK offshore wind industry and to showcase the Irish expertise that can assist with maintaining and accelerating growth in the UK. Indeed, Enterprise Ireland research shows, that there are over 50 Irish companies with a proven capability in the offshore wind supply chain, while many companies possess the ability to quickly and effectively pivot in to the sector; to provide reliable and innovative products and services to an ever-growing industry.

There is a well-established history of Irish companies driving growth within the offshore wind sector, going back to Arklow Bank in 2004. Located 12km off Ireland’s East coast, Arklow Bank was one of the first offshore wind farms to be developed in either Ireland or the UK. Commissioned in 2004 by Irish owned Airtricity (now part of SSE plc), the windfarm brought over 25MW of clean renewable electricity to the grid. Airtricity subsequently brought their Arklow Bank experience to the 504MW Greater Gabbard offshore wind farm off the Suffolk coast, where construction was completed in 2012. The Irish influence in the UK can be further seen in the Hornsea One project off the Yorkshire coast. One of the world’s biggest (Round 3) windfarms, it was developed by Irish company, Mainstream Renewable Power, who also developed the Neart Na Gaoithe zone off the East coast of Scotland prior to its recent sale to EDF.

In addition to possessing a strong international reputation for developing offshore wind farms, Irish companies bring excellent geotechnical and environmental engineering experience to the offshore industry. For example, companies such as Gavin and Doherty Geosolutions work with offshore wind developers to identify uncertainties, risks and challenges in the design, installation and operations of offshore wind farms such as Neart na Gaoithe. When it comes to maintaining windfarms, Irish companies are to the fore again. Irish Sea Contractors work with Ørsted to provide subsea inspections for its offshore assets around the UK coast. The same company is also leading on innovation in the subsea cable repair supply chain with its patented Habitat solution. Other Irish companies, such as Xocean, use Unmanned Surface Vehicles to provide seabed mapping and turnkey data collections services for the offshore wind industry.

Vessel design and build is yet another strong area of Irish expertise. Irish vessel builders such as Mooney Boats and Arklow Marine have substantial experience building support vessels for the UK offshore wind industry, with several Irish companies also involved in vessel management.

Of course, with ever increasing renewable energy generation comes ever increasing demands on the electricity grid. Increased requirements for grid connections and the construction of power transmission and substation infrastructure will be a key element of the industry’s growth. Irish capability in this space can be seen in companies such as H&MV Engineering, Kirby Group Engineering and Gaeltec Utilities. Meanwhile, companies such as GridBeyond provide crucial grid-balancing technology solutions. With ever increasing offshore wind generation, demand side response services offered by GridBeyond are essential to ensure flexibility and a stable supply of electricity to the grid. The importance of grid solutions to the future of the energy industry is reflected in the establishment of an Enterprise Ireland Smart Grid cluster in 2018, reflecting the collective Irish capability in this space.

Furthermore, Ireland’s Universities and research centres such as the Centre for Marine and Renewable Energy (MaREI) have been at the forefront of the development of next generation technologies and systems.

With a new trading relationship between the UK and the EU on the horizon, Enterprise Ireland client companies remain wholeheartedly committed to working with and supporting our nearest neighbours in the development of its offshore wind industry. To further highlight this commitment to the UK market, Enterprise Ireland will host a UK industry delegation to Ireland in March 2019 to deepen collaboration and highlight the critical areas of support that the Irish supply chain can provide across the UK offshore wind industry.

Written by Darragh Cotter: Enterprise Ireland Cleantech Market Advisor.

For more information on Ireland’s capability in the offshore wind sector, please contact Darragh Cotter in Enterprise Ireland’s London office at Darragh.cotter@enterprise-ireland.com

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Transforming construction

A new £72M Core Innovation Hub is being developed to lead the transformation of the construction industry.

The construction industry has hardly changed in the last 40 years, bringing about efficiency and productivity issues, whilst the industry is also facing a skills shortage with an ageing workforce and lack of technological know-how.

The Core Innovation Hub will help to lead a transformation in construction, make it more productive and importantly create new, high-value jobs at the same time. As the industry develops new techniques, the Industrial Strategy investment will promote access by a diverse pool of candidates and create better homes and public buildings through modernisation. By supporting research and development in digital and offsite manufacturing, the hub will advance new knowledge and approaches in construction, bring forward new jobs and build the supply chain.

Introducing more standardised modular components, construction techniques and processes will remove some of the risks and create safer, more efficient work. However, this will also require a brand new skill set and help to diversify the available workforce.

The investment is through the £170M transforming construction challenge, part of the government’s Industrial Strategy Challenge Fund that is being delivered by UK Research and Innovation.

Sam Stacey, Challenge Director, UK Research and Innovation, said: “We need to transform construction so that we can create affordable places to live and work that are safer, healthier and use less energy.

“By taking a lead in the UK, we can increase our ability to export. Global demand for efficient buildings is rising rapidly, driven by the pressures of urbanisation, affordability and the need to cut emissions.”

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FMB sends stark warning on apprenticeships

The FMB has warned the skills shortage will only get worse for construction, claiming that apprenticeships are plummeting because of the Apprenticeship Levy.

The FMB’s reaction is in response to statistics published by the Department for Education, which show that there has been a 24% fall in apprenticeship starts for the 2017/18 academic year compared with the previous academic year.

In order to stop this free fall and regain numbers, the FMB says that the Levy must be more flexible.

Commenting on the figures, Brian Berry, Chief Executive of the FMB, said: “Apprenticeships are falling and the Government must take urgent action to reverse the decline. At the recent Conservative Party Conference, the Government announced much-needed reforms to the Apprenticeship Levy but these do not go far enough. From April 2019, large firms will be allowed to pass 25% of Levy vouchers down through the supply chain to smaller firms but the FMB is calling for this to be increased to 10%. This is an important change because in construction, it’s the smaller firms that train more than two thirds of all apprentices. Conversely, large firms don’t tend to directly employ or train tradespeople. If the Government is serious about creating three million quality apprenticeships by 2020, it must ensure the Apprenticeship Levy works for the construction industry.”

Berry concluded: “These alarming apprenticeship figures come hot on the heels of the recently published Migration Advisory Committee (MAC) report, which outlined some worrying recommendations for the UK’s post-Brexit immigration system. The Government’s initial reaction was to accept the MAC report’s recommendations. This is deeply concerning as the report suggests that the supply of ‘low-skilled’ migrant workers should be severely limited. The construction industry relies heavily on low skilled workers, such as labourers, who are essential to any construction site. What’s more, Level 2 tradespeople, such as bricklayers and carpenters, will be deemed low skilled and therefore severely limited in number. This is unwise given the construction skills shortage and insulting given the amount of knowledge and skills these individuals possess. New figures show that there were 2.25M EU nationals working in the UK in from July to September 2018, 132,000 fewer than one year earlier – that’s the steepest fall on record. It is therefore even more vital that the Government listens to the industry and reforms the Apprenticeship Levy before it is too late. We need to be training more UK-born apprentices to reduce future reliance on migrant workers from Europe or else the construction sector will grind to a halt. We need tens of thousands more apprentices and tens of thousands of migrant construction workers – of all skill levels.”

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The challenges in the construction of energy projects

Perhaps the most critical issue in all energy construction projects is the need for the completion of the project by a specified date. We speak with James Brown from law firm Haynes & Boone about at the potential legal disagreements which could, and have, occurred.

The contractual documents will accordingly impose on the party that is to undertake the relevant works a binding deadline for their completion, and will typically contain other associated contractual provisions that are concerned with this end-date for completion. The legal consequences of late performance can be very significant indeed. Hence issues concerning time and whether works have been completed within the required is probably the ripest area for disputes in respect of energy construction projects.

In the first instance, a failure to perform on time may initially give rise to an obligation on the party in default to pay compensation to the innocent party. It is a very common feature of contracts concerning the construction of energy projects for the contractor in certain circumstances – usually late performance – to have to pay “liquidated damages”. English law does not permit clauses that penalise late performance (or indeed any other failure to perform as required) but provided the clause in question is not a penalty, then such a clause would typically be upheld by the English courts. Although these clauses impose an obligation on the party that is “late” in its performance to pay compensation to the other, such clauses can be regarded commercially as for the benefit of both parties (ie: both the paying party and the recipient) because they provide greater certainty as to the consequences of a specified failure to perform than would otherwise be the case (since otherwise the “innocent party” would have to establish a breach of contract by the late performing party, that it had suffered loss caused by the breach and that it had  taken steps to minimise the loss suffered by it – ie: to mitigate it).  Even in the absence of a liquidated damages clause, a failure to perform on time may well give rise to damages at common law.

Instances of delayed performance, however, may give rise to even more significant rights than an entitlement to damages (whether liquidated or not). So for example, many contracts will provide for an express contractual right to terminate the contract upon some specific period of delay and/or such a right may arise at common law.

The potential for a serious legal dispute to arise in respect of an alleged failure to perform by the time required is therefore extremely great because so much will often be at stake. At the root of many such disputes will be the interpretation and operation of the typical contractual provisions that provide for (in certain circumstances) extensions to the time by which a party is otherwise contractually obliged to complete its performance. Thus, construction contracts will typically provide for the time for performance to be extended when a party’s ability to perform is hindered by circumstances that are beyond its control, for example by “acts of God”, such as poor weather, flooding, fires etc, or other events of force majeure. Whether a force majeure event had prevented a party from performing its contractual obligations, albeit in the context of offshore drilling operations, was in July 2018 the subject of an English High Court judgment in the case of Seadrill Ghana Operations Limited v. Tullow Ghana Limited.  Haynes and Boone CDG, LLP acted successfully for the drilling contractor in establishing that Tullow had not been entitled to terminate a long-term drilling contract for what it contended was force majeure, namely the issuing of a drilling moratorium, with the court determining that this in fact had not been the sole cause of Tullow’s inability to perform its contractual obligations. As a result, Tullow was required to pay Seadrill Ghana US$270M on account of its having terminated the contract for convenience rather than force majeure.

Construction contracts in the energy sphere will also typically anticipate the possibility that the employer, as the recipient of the contracted-for performance, may well during the contract need or wish to instruct changes or variations to the goods/services to be provided under the contract. For example, a wind-farm operator may contract for the construction of an offshore maintenance/accommodation platform but may direct certain changes to the design of that platform subsequent to the signing of the relevant contract and during the course of its construction. It may be that such changes  will impact not only on the eventual costs of the yard in constructing the platform and transporting it to the offshore site, but also on the time taken to complete its construction. In respect of such eventualities, it is common for contracts for energy  construction projects to provide a contractual mechanism which provides for the adjustment of the contract price and/or the time for completion of the contract in the event of such instructed changes. Similarly, such contracts will typically provide that the contractor shall be entitled to an extension of the time for completion where the employer has failed to perform as it is required or has otherwise hindered the contractor in its performance of its obligations.

A common cause of difficulties, however, is that parties will commonly in practice not follow the necessary contractual procedures for claiming an extension of time, in which case there may be a dispute as to whether the time for completion has nevertheless been extended. Or one party may seek an extension of time in circumstances in which there is a dispute about whether an alleged delaying event was indeed an event of force majeure or was rather some event that was within the reasonable control of the party seeking the extension of time. Disputes will often arise as to with whom responsibility lies for delays on a project – with particular difficulties arising when there may be fault on both sides – with the parties falling into conflict over whether the contractor’s time for performance has actually been extended, such that the contractor’s performance is not late under the contract, or whether it is beyond the time required. Where the issue is whether, as a result of late performance, a right to cancel the contract or reject the goods has arisen, such disputes will likely be hard fought and often costly, particularly if a great deal is at stake (for example, the matter may concern a contract for the construction of an offshore drilling rig  having a price of up to US$1Bn, with  the buyer usually having the right upon some specified period of delay in delivery by the builder to cancel the contract and to be paid back its instalments and interest if construction of the rig is not completed).

Matters of timing and delay are therefore absolutely critical issues in energy construction projects and will be of significant focus in the drafting of the contracts.  The aim is to avoid costly and time-consuming disputes about these issues by as far as possible agreeing clear contractual provisions that provide for as much certainty as possible as to the legal position when things go wrong, as they often will.  However, with the best will in the world, it is in the nature of these projects to give rise to disputes in which event it takes skilled legal practitioners to resolve them.

 

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Technology upgrade for England’s first motorway

Marking the 60^th birthday of England’s first motorway, Highways England is leading a major technology upgrade on the M6.

60 years ago, on 5th December 1958, 2,300 drivers drove along a new road for the first time and straight into the history books. With the eight-mile section of the Preston bypass becoming the very first motorway in Britain, which is now part of the M6.

With just two lanes in each direction, no safety barrier in the central reservation and no electronic signs or other technology, the M6 has come a long way on its journey. Today hundreds of thousands of drivers travel more than 20 million miles on the M6 every day, accounting for one in eight of all motorway journeys.

Preston bypass during construction.

A new project will see a major technology transformation and significantly improve journeys on the M6. As part of the motorway’s evolution, Highways England is now pledging to complete four upgrades on the M6 by spring 2022 to add extra lanes and better technology to 60 miles of the motorway between Coventry and Wigan.

The first upgrade between Crewe and Knutsford in Cheshire is due to be finished by spring next year, and contractors are currently completing the installation of 258 electronic signs, 104 traffic sensors and 70 CCTV cameras along the 20-mile route.

The four upgrades, worth around £900M, also involve converting the hard shoulder to a permanent extra lane to increase capacity by a third.

Andrew Jinks, smart motorway director at Highways England, said: “The M6 provided a major economic boost to the country when it first opened 60 years ago and it still provides a vital link between London and Scotland through the West Midlands and North West.

“Hundreds of thousands of drivers now use the motorway every day to get to work, meet friends and family, or for long distance deliveries, and the smart motorway upgrades will ensure the M6 is fit for the future.

“Our motorways have changed massively over the past six decades and smart motorways could be just a glimpse of the technology transformation still to come. In 60 years’ time, driverless vehicles could be as commonplace as a car radio.”

The new smart motorway technology will allow variable speed limits to be automatically set on overhead signs to improve the flow of traffic, preventing stop-start conditions and tailbacks caused by sudden braking. The technology will also be used to detect queuing traffic, breakdowns and collisions as they happen so that Highways England’s traffic officers and the emergency services can respond quickly to incidents.

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A smart alliance drives into the future

Highways England has invited companies to join a £4.5Bn alliance, designed to improve motorway journeys and delivering the roads of the future.

The Smart Motorway Alliance needs six partners to develop a smarter network over the next ten years, creating extra capacity relieving congestion, for more traffic to use the country’s busiest motorways.

The infrastructure that goes into creating that capacity will form the foundations for connected vehicles to use the motorways in the future.

The Alliance is the second part of the company’s ground-breaking Routes to Market procurement approach; earlier this month it announced the companies it will work with on £8.7Bn worth of Regional Delivery Partnership deals.

Highways England’s Chief Executive, Jim O’Sullivan said: “We want a step change away from traditional thinking and more towards creating value. We want companies that can learn from their experiences, and work together to deliver ever improving efficiency and productivity.”

Highways England has developed the model through engagement with the supply chain. The innovative and infrastructure leading approach will enable a step-change in performance and aid the delivery of a large number of schemes that will increase capacity and reduce congestion on motorways, whilst improving safety during the delivery of these schemes.

The company is seeking three on-site delivery partners, two digitally enabled design partners and one production management partner.

The Alliance puts integration and collaboration between Highways England and its supply chain at the heart of how Highways England’s smart motorway programme will work going forward.

The Contract Notice has been issued to the OJEU, click here.

If you are interested in finding out more about key infrastructure trends today, you may wish to attend the flagship infrastructure exhibition at the NEC 30th April 2019 : UKIS 2019

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The future is virtual

The government has announced a £72M investment which will see virtual reality revolutionise the UK’s construction sector.

In a move designed to improve productivity within the sector, in line with government policy, virtual reality, digital design and offsite manufacturing technologies will be pushed forward as the future of UK construction.

The investment will allow the development of a new Core Innovation Hub, as part of the modern Industrial Strategy, which will make the UK a world leader in the latest construction techniques – as well as creating new jobs across the UK.

The new Core Innovation Hub will transform the UK’s construction industry by supporting the development and use of technologies such as digital design, advanced manufacturing, robotics, drones and augmented and virtual reality.

Many of these techniques are used and proven in other sectors, such as automotive manufacturing, but it will be a first for construction. The increased use of technology will enable the sector to design and build faster, cheaper and more sustainably. Smart sensors and digital systems will be incorporated into buildings and infrastructure, so they can manage and maintain themselves – and the data they gather will enable the government and industry to make our towns and cities better places to live, work and travel in.

The investment was announced by Business and Industry Minister Richard Harrington, during a visit to the Building Research Establishment (BRE), which is receiving funding, and is part of the Core Innovation Hub. He said: “We have the opportunity to revolutionise construction in the UK and the Core Innovation Hub will help us build smarter, greener and more efficient buildings much faster and cheaper than we do now.

“From the introduction of virtual reality to off-site manufacturing, our modern Industrial Strategy, is helping the UK construction sector to develop new techniques and skills – modernising the sector and delivering the homes and buildings our nation needs.”

Exchequer Secretary to the Treasury Robert Jenrick said: “Our manufacturing industry is vital to the UK, contributing billions to the economy every year.

“This new fund will see it partner with our construction and digital sectors to revolutionise the way we develop crucial infrastructure. It will enable us to build in more efficient and cost-effective ways, boost productivity and ensure we are fit for the future.”

The delivery of the hub was awarded to the Transforming Construction Alliance (a partnership between BRE, MTC and CDBB) following a nationwide competition launched as part of the Industrial Strategy Challenge Fund.

Keith Waller, Programme Director for the Transforming Construction Alliance said: “I am delighted to be leading the Transforming Construction Alliance in its mission to deliver the Core Innovation Hub project, and boost productivity and performance in the construction sector.

“I look forward to working alongside government, industry and the talented teams at MTC, BRE and CDBB to realise the vision of a transformed sector.”

The alliance aims to deliver a national Core Innovation Hub (CIH) that will support collaboration across sectors to develop, commercialise and promote digital and manufacturing technologies for the construction sector, offering an opportunity for everyone with an interest in construction to become involved.

Find out more: www.transformingconstruction.org.uk

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