Notice

Floating Offshore Wind Manufacturing Investment Scheme: clarification questions with responses (updated 14 June 2023)

Updated 14 June 2023

Application form criteria

Q: Are there any circumstances in which grant spending can be made after 31 March 2026? For example, if the construction contractor is under contract by 31 March 2026 can monies be released to the contractor after this date?

A: As outlined in Essential Criteria C3 scheme funding will not be available beyond 31 March 2026.

Q: Regarding the criteria for D4.4 on providing details of non-project related public funding, is there a de-minimis and a time limit for what funding should be announced?

A: If you have received any other public funding whatsoever, please provide full details. We need to be made aware of all public funding, who it was given to, when, who it was given by and what it was for. We will then take a view as to whether this impacts the amount of funding for which you would be eligible under the scheme. If you consider any other subsidy should not be cumulated with any funding for which you may be eligible under this scheme, please set out the reasons why referring to relevant subsidy control legislation.

Regarding the timing of the receipt of past public funding, we encourage applicants to over-include and provide a summary of any subsidies received that could be relevant. However, we would suggest that they (with their legal advisers) offer a rationale in their view as to why relevant grants should/should not be cumulated with any funds provided from FLOWMIS (this may include matters such as timing of grant and activity for which it was used/recipient). While we will not substitute the view of an applicant for its own, we will consider any views offered. As per our published guidance we will take all steps necessary to ensure subsidy control compliance as part of its process.

Q. Do UK Trust Ports / local authority ports qualify under essential project criteria C1?

A. Yes, FLOWMIS is open to all UK ports, regardless of ownership model.

Q. Can you provide guidance on Essential Project Criteria 10?

A. We expect that grant funding will act as a component part of the wider funding stack, leveraging private sector investment, which would need to be in line with C10.

Q. Is there any flexibility in the minimum water depth of 10 metres below CD essential criteria?

A. Applicants must meet the requirements of all essential criteria. Selection of the FLOWMIS essential criteria has been informed through industry research and represent the basic attributes that we believe that a floating offshore wind port capable of supporting the immediate ambition of 5GW by 2030 and wider pipelines developing in the UK must possess.

Q: Is there a conflict between C10 (The applicant must make its port infrastructure available to interested users on an equal and non-discriminatory basis and on market terms) and D2.1 (Please provide details relating to the level of commercial interest, agreement or commitment that you have received from the following […]).

A: Commercial interest can be demonstrated by way of arrangements with offshore wind manufacturers or developers. Naturally, not all developers or manufacturers need to be facilitated at your site. However, there should be no exclusivity arrangement with the effect that you will only enter into discussions with one manufacturer or developer and not others.

Planning and consenting

Q. Do all consents need to have been applied for at point of submission?

A. We expect applicants to demonstrate that projects have made appropriate progress in obtaining necessary consents at the time of application and identify a timeline to resolve outstanding consenting issues that enables FID to be taken with sufficient time to defray eligible expenditure by 31 March 2026.

Financing

Q: Is the grant intervention rate tiered to offer 90% grant to the first £15 million of a project, 80% grant to the proportion of the project between £15-£40 million, and 60% grant to the proportion over £40 million? Alternatively, is it a flat-rate grant intervention dependant on total project value?

A:

• The grant intervention is not tiered.
• If your application is successful, you will be awarded a maximum level of grant which will be the minimum amount required to enable the project to go ahead. This will be set out in a Final Grant Offer Letter (FGOL).
• The scheme guidance confirms that the maximum grant intervention rates of 60%, 80% and 90% that can be applied for will be dependent on the level of eligible project spend, i.e. £15 million, £15 - £40 million and £40 million+.
• The maximum amount of grant applied for must only be what you need.  This will be tested through the application assessment and due diligence.
• We will reserve the right to adjust the level of grant payable.
• We will reserve the right to require a greater amount of expenditure at the point before we release the grant fund. This would be set out in the FGOL, if your application was successful.

Q. Is there a minimum spend requirement?

A. No there is no minimum bid requirement.

Q. Is there a maximum spend limit?

A. Any funding award will need to be compliant with the scheme guidance. This includes section C8 of the Essential project criteria:

The total amount of publicly funded subsidy (including the Grant Funding Agreement and any other subsidies, as defined in the Subsidy Control Act 2022 and associated regulations, whatsoever) sought must not exceed the following subsidy intensities:

(a) 90% of the forecast eligible expenditure (as defined in C4) where the total eligible expenditure for the Project is not greater than £15 million;

(b) 80% of the forecast eligible expenditure (as defined in C4) where the total eligible expenditure for the project is greater than £15 million and less than £40 million; and

(c) 60% of the forecast eligible expenditure (as defined in C4) where the total eligible expenditure for the project is £40 million or greater.

Please note however that these are maximum levels of intensity and all applicants must be able to demonstrate that funding represents the minimum necessary to enable the project to proceed. Further information is available in paragraph 3.5 of the guidance.

Q. Is the scheme open to applications for a delegated grant scheme, for example where an applicant acts as an intermediary for dispensing FLOWMIS funds to other entities?

A. The purpose of the funding through FLOWMIS is to support investment in port infrastructure to enable the activities outlined in the guidance document. We have undertaken a considerable amount of engagement with the sector, particularly through a Request for Information exercise last year and are expecting these to be quite large payments for major infrastructure projects. As such we wouldn’t be looking to consider applications for a delegated grant scheme at this stage.

Q. Are we able to capitalise planning and consenting costs?

A. As outlined in the Essential Project Criteria (C4), eligible expenditure only relates to capital investment in:

• the construction, replacement or upgrade of port infrastructure;
• the construction, replacement or upgrade of access infrastructure; and/or
• dredging

and should be able to be capitalised in accordance with International Financial Reporting Standards.

If it is possible for the applicant to capitalise any specific costs for developmental expenditure (e.g, costs for planning and consenting) in line with International Financial Reporting Standards and the applicant can demonstrate, to the satisfaction of the Department for Energy Security and Net Zero, that it is standard practice for the company to capitalise development expenditure of this type with supporting evidence of previous instances of capitalising development expenditure (including justification that this expenditure is proportionate and limited to the minimum necessary), the Department for Energy Security and Net Zero may deem, at its absolute discretion, that this could be considered eligible expenditure, providing it relates to:

• the construction, replacement or upgrade of port infrastructure;
• the construction, replacement or upgrade of access infrastructure; and/or
• dredging.

As outlined in the guidance, submitting an application to the scheme does not guarantee any award of Scheme funding, but the date on which an applicant submits its application can be used as the start date for eligible expenditure that can be defrayed for the purposes of the Grant Funding Agreement in the event that a Grant Funding Agreement is subsequently awarded (Essential Project Criteria (C3)).

Applicants are advised not to make any irrevocable commitments to incur project expenditure prior to submitting their application. For the reasons above, applicants are also advised that they should not make any irrevocable commitments to incur project expenditure in reliance on funding by the Department for Energy Security and Net Zero at any point prior to finally executing a Grant Funding Agreement. Until a Grant Funding Agreement is signed, all project expenditure incurred is entirely at your own risk.

Applying entities

Q: Can funding be extended to entities that are not port owners but are constructing factories supporting ports?

A: The purpose of the funding through FLOWMIS is to support investment in port infrastructure to enable the activities outlined below under C6 in the Essential Project Criteria and so the scheme would be applicable for the port owner rather than for the build of a factory.

Leasing rounds

Q: Is the scheme restricted to entities involved in the Scotwind or Celtic Sea leasing rounds?

A: Applications are open to ports across the UK and will in part be assessed against the level of commercial interest in the project which is not limited to the Scotwind or Celtic Sea leasing rounds. We would welcome applications from ports supporting other projects.

Fixed foundation applicability

Q: Do plans to use a port’s new infrastructure, initially for fixed foundation projects, and afterwards for floating windfarm projects, disqualify a FLOWMIS application?

A: There is no objection to port infrastructure being used for fixed as well as floating offshore wind. However, in order to qualify as eligible costs, the expenditure for which grant funding is sought must relate to a project which demonstrably supports/enables floating offshore wind (See eligibility criteria C6). What would not be acceptable is funding port infrastructure that only facilitated fixed offshore wind.