Looking Forwards for Offshore Wind: A United Strategy

Offshore Wind Structures

Produced in association with:

London, UK14-15th April 2015

Looking Forwards for Offshore Wind: A United Strategy

Join the conversation: linkd.in/Mi6eaN @W_E_Update #OffshoreWindStructures

Reducing the cost of wind energy is a strategic aim of the industry but its

achievement requires a broad collaborative attitude. The impact of political

support and legislation cannot be overstated, and as such an economic strat-

egy must consider policy alongside incremental and step-changes in in the

industry’s technology.

With £81 billion worth of renewable energy projects proposed by 2025 in the

UK alone, including 10GW+ of installed offshore wind capacity, the UK is one

of the leading offshore wind markets. Europe-wide, 40GW of installed capacity

is forecast by 2020 and 150GW by 2030; under increasing pressure to prove its

viability as a commercial industry, offshore wind is making strides towards this

goal with changes to political, financial, contractual and technological strategy.

In conjunction with the Offshore Wind Structures summit (14-15th April 2015,

London) Wind Energy Update has brought together experts from Mainstream

and the ETI (Energy Technologies Institute) to discuss the economics and strat-

egy of offshore wind.

Amy Allebone-Salt

Project Director | Wind Energy Update

amy@windenergyupdate.com

Politics & Strategy

Possibly the biggest question mark for the industry lies in what might happen

after Round Three, and whether or not the appetite of the UK government to

support offshore wind will continue. The ultimate aim is for the cost of wind

energy to be reduced to the stage where it becomes the alternative energy of

choice – and even for its ‘alternative’ status to become defunct. Government

subsidy is necessary for the industry to reach this stage of commercial

sustainability.

Andrew Scott, Programme Manager for offshore wind and marine at the ETI,

comments: “Ultimately government policy will drive this. The industry cannot

prosper without subsidies to make it cost effective and encourage further inno-

vation. But the government rightly so needs to find the balance between the

affordability of any subsidy and the growth of the industry and this has means

that expansion has been less quick than many would have liked. We are now

something like five years behind original projections- accordingly cost reduc-

tions are also slower to be realised.”

Scott thinks that the industry is possibly too focused on the here and now

and needs a longer-term strategic vision to work towards making the cost of

offshore wind come into line with nuclear. Achieving this, he thinks would

underline the longevity and sustainability of the industry and feed further

growth through investor confidence.

“The problem is that there is too much focus on Round Three and not enough

on what happens after that. Innovation is needed and for that there needs to

be a bigger overall industry so that the research and development to make that

innovation happen then becomes worthwhile and commercially viable.

“If by 2020 wind has become less expensive then it will retain its place as the

alternative of choice in the UK. If it can get its projected cost trajectory down

then it becomes a feasible industry in its own right. The objective is not to limp

along supported by the government - it is to build a strong and sustainable

industry,” he says.

In order to achieve that, the industry must build confidence in investors

through mitigating the risks involved in offshore wind projects, improve the effi-

ciency of existing technology, and continue to innovate for the future.

Fintan Whelan, Co-Founder and Corporate Financial Director at Mainstream,

comments: “The big picture and strategic aim must be to include all three

elements. Doing it right reduces risk and unlocks the capital to invest - this leads

to doing it better and then gaining more efficiencies and cost reductions via

continuous improvement, building reputation and experience. Finally doing it

differently requires step change, like with floating platforms – it is testing yes,

but the end game is an important one.”

One of the key changes being made in the industry is actually doing it bigger.

Scott explains: “The actual physics of the sizing means that it pays to go bigger.

If a turbine is using 100m long blades rather than 80m long then it is recoup-

ing more energy. All the major players are now developing 6-8MW turbines

and the expectation is that these will get bigger and bigger. The other thing

is that upscaling does not increase the amount of components used so does

not increase cost and maintenance in that respect. This is all about volume

economics and an economy of scale and critical mass.”

And as bigger turbines bring about better returns for stakeholders, comfort

levels increase, making the industry ever more investible.

Cost Reduction Strategies The Economy of Scale

Better efficiencies could also be gained from turbine manufacturers and foundation

designers working in a more integrated and collaborative manner; this is something

that can change for the good and the longevity of the industry as a whole.

One major sticking point is that the software packages used by the turbine

designers and the foundation designers are not compatible.

Scott explains: “This lack of integration between the various software packages

is simply not practical… Closer collaboration can only mean a more effective

whole. The turbine manufacturers will need to consider the loads that they are

placing on the various foundation types and act accordingly.”

Whelan meanwhile points out that working individually not collaboratively has

resulted in a tendency to over-engineer. “A result of poor interaction and under-

standing of how the two work together is not good for the industry overall. The

logical thing is to pool experience and input for modelling because the two

things are elements of a whole system.”

Other steps that are being taken to reduce cost and increase productivity

include more carefully and strategically placed turbines, so as to capture the

greatest possible amount of energy from the site. Cabling can also be looked at

to make sure that the lowest amount of power possible is being leaked. Finally,

using vessels with GPS capability enhances placement precision and makes the

whole process more effective.

Whelan comments: “A row of turbines at the edge of a wind farm can create a

wake effect so that those behind them do not capture as much energy as they

could do. As the wake effect is better understood then the layout becomes more

important and the right level of bunching at the perimeter can be achieved to

gain maximum capture of fresh wind. This impacts on the price per unit because

the amount of energy captured rises but the upfront spend is the same.”

Modelling & Software Packages Productivity

Floating technology is one of the most contentious issues in offshore wind, but

its supporters believe it has the potential to significantly reduce costs. Floating

platforms have not yet reached commercialisation for offshore wind, but the

concept stems from the oil and gas industry, in which they are old news.

Scott comments: “Floating foundations have real potential to significantly

reduce LCOE from late 2020s, provided the right (not just currently most devel-

oped) technology is chosen. It will allow developers to identify where the wind

is best, then look at how close to shore that is then which foundation would

best suit that particular location.”

He warns, though, that “care needs to be taken not to rush to adopt the first

usable technology and instead get the right and most suited technology.” He

warns that although innovation ultimately brings down cost in the short term

it brings with it risk, and new technologies need time to become proven and

thus commercially viable. “Innovation can actually be off putting for investors,

they need to give new technologies serious consideration given the amount of

capital involved.”

The hopes and expectations for offshore wind are high: a self-supporting, fully

commercialised industry. This seemingly simple goal requires collaboration

across all tiers of the industry from the policy makers and legislators, owners

and developers, designers and consultants, to manufacturers and suppliers,

as well as the extensive support industries. A united, cohesive strategy, with a

focus on efficiency and productivity, seems to be the primary means of escalat-

ing the viability of offshore wind energy.

A Floating Future? Conclusion

Andrew Scott

Programme Manager,

Offshore Wind and Marine,

Energy Technologies

Institute

Fintan Whelan

Cofounder and Corporate

Financial Director,

Mainstream Renewable

Power

Representatives from Statoil and Senvion will be continuing the conversation

with EDF, Mainstream, Ramboll, HR Wallingford, BVG Associates, The

Carbon Trust, ETI, and more from across the industry at Offshore Wind

Structures in London, 14-15th April 2015.

The carefully selected agenda and speakers reflect the most important

technological developments as selected by you: the professionals.

Attend Offshore Wind Structures – the only event to consider the whole

structure and so to unite the industry disciplines and across the supply chain

– to add significant value to your project and achieve the goal of reducing the

cost of energy.

Experiences with Wind Energy Update:

“Good especially because it is much more about the problems and less commercial.” Acciona

“This conference was a great opportunity to meet different actors in the offshore wind industry to share knowledge and best practices. It gave me the opportunity for networking with other professionals as well. The conference

as a whole was quite excellent.” Vattenfall

“The WEU events are the only conferences worth attending. The events are detailed, concise and contain the decision makers. It’s always great to be able to attend an event where the speakers stay and spend time networking with

the audience.” GCube Underwriting Ltd

Including Representatives from:

Offshore Wind StructuresLondon, UK | 14-15th April 2015

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Thank you for reading Looking Forwards for Offshore Wind: A United Strategy.

If you have any feedback, or ideas for what you would like us to publish next, get in touch.

Contact Amy Allebone-Salt

Project Director | Wind Energy Update

amy@windenergyupdate.com

For more information go to www.windenergyupdate.com

Join the conversation: linkd.in/Mi6eaN @W_E_Update

Looking Forwards for Offshore Wind: A Focus on Technology © 2014 FC Business Intelligence®

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Wind Energy Update

Offshore Wind Structures

Produced in association with:

London, UK14-15th April 2015