World Offshore Wind Market Forecast 2015-2024

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  1. 1. World Offshore Wind Market Forecast 2015-2024energy business insight e: research@douglaswestwood.com t: +44 (0)203 4799 505 www.douglas-westwood.com Aberdeen | Faversham | Houston | London | Singapore 2015 Douglas-Westwood 17 World Offshore Wind Market Forecast 2015-2024 By purch asing this docum ent, your organ isation agree s that it will not copy or allow to be copied in part or whole or otherwise circula ted in any form any of the contents without the writte n permission of Douglas-W estwo od Offshore Wind Project Costs Structure Chapter 3 : Offshore Wind Project Development Capex Phase 2(Decom) Opex Phase (O&M) Capex Phase 1 (EPC) Deco mmiss ioning is still some way off for the offsho re wind indust ry. There fore, there is a great deal of uncer tainty with regard to decom missio ning costs. The above projec tion is based on inform ation from decom missio ning progr amme s subm itted by offsho re wind develo pers for their projec ts. Deco mmiss ioning cost estima tions vary signific antly: from 50k/ MW to 140k /MW. Deco mmi ssion ing The opera tional phase for an offsho re wind farm can last for 20 years or more . The main aim during this phase is to maxim ise the availab ility of offsho re wind turbin es by mean s of regula r inspec tion, maint enanc e and repair s (when neces sary). Deve lopme nt of local infrast ructur e (e.g. suitab le ports) and availab ility of specia lised vessel s for transp orting perso nnel and equip ment are key factor s during the O&M phase . A guide line for offsho re wind O&M cost is ~5% of the capita l cost per year, althou gh costs vary consid erably from projec t to projec t (3-12 %). Oper ation s & Main tenan ce This page prese nts a view on the offshore wind cost structure by proje ct stage the chart on the left show s proportions of various Cape x comp onents per MW of installed capac ity. The centr al chart demo nstrates contr ibutio n of dif- feren t cost items to the total O&M costs durin g the operational life of an offshore wind proje ct. The chart on the right hand side provi des an estim ated cost structure for the decommis sionin g phase of an offshore wind proje ct. Expen diture for the planni ng & develo pmen t and constr uction phase of a projec t contri bute to aroun d three quarte rs of the total life-tim e costs of offsho re wind farms and repre sent the riskies t part of the projec t invest ment, as they cover procu remen t and constr uction phase s. The wind turbin e repre sents the larges t share of the total Capex . Balanc e of Plant for offsho re wind is the secon d larges t expen se item and is highly sensit ive to such param eters as water depth , distan ce from shore and wind farm powe r outpu t.Suppl y and dema nd for install ation vessel s is the cost driver during the install ation phase . Altho ugh differe nt from projec t to projec t, curren t data shows averag e Offsh ore Wind Capex at 5m per MW. Plann ing & Deve lopm ent, Proc urem ent and Insta llatio n Figure 8: Cost Break down by Projec t Phase Capex, Opex , Decom. Source : Dougl as-We stwoo d, Centri ca, DONG , Vatten fall 7% 41% 31% 21% Plann ing & Deve lopmentWind Turbi ne Balan ceof Plant Install ation 51% 9% 8% 6% 5% 21% Repla ceme ntEquip mentPerso nnel Trans fer Skilled Techn icians Install ation / Repai r Vesse lsO&M Ports Grid Maint enanc e, Lease & Other Recur ring Costs 53% 32% 2% 9% 4% Turbi ne Found ation Offsh oreSubst ation & MetStatio nWast eMana geme ntSubse a Surve ys 2015 Douglas-Westwood 20 World Offshore Wind Market Forecast 2015-2024 By purch asing this docum ent, your organ isation agree s that it will not copy or allow to be copied in part or whole or otherwise circula ted in any form any of the contents without the writte n permission of Douglas-W estwo od Capex Phase 1: Balance of Plant Chapter 3 : Offshore Wind Project Development A structure connecting the foun- dation with the towe r. The design of the transition piece depends on the type of the support structure. Supplier Exam ples: Aker Solutions, Bladt, MT Hoj- gaard , LIC Engin eering, SIF Grou p. Proportio n of Capex: 3.2% Trans ition Piece The choic e of support structure type depends on site-s pecifi c param eters, includ ing water depth and seabe d conditions as well as the size and weigh t of the wind turbin es being used. Optio ns includ e gravit y base structures (GBS ), mono piles, jackets, tripods, suctio n bucke ts. Supplier Exam ples: Aker Solutions, Ambau, BiFab , EEV, LIC Engin eering, MT Hoj- gaard , OWE C Towe r, SIF Grou p, Wese rWin d. Proportio n of Capex: 13.7% Supp ort Struc tures Array cable s connect wind tur- bines to each other and connect them to a subst ation. Array cable s typica lly have a medium voltage (MV) rating of 33kV. Supplier Exam ples: JDR Cable s, NKT Cable s, NSW , Parke r Scanr ope, Prysm ian Grou p. Proportio n of Capex: 1.9% Offsh ore transformer subst ations are used to reduc e electrical losses by increasing the voltage prior to expo rting the powe r to shore . A large offshore wind farm may have more than one subst ation. Supplier Exam ples: ABB, Areva T&D, Atkin s, Bladt, Harla nd and Wolff, Heer ema, HSM Offsh ore, McNulty Offsh ore Cons truction, Siemens Powe r Trans mission, Semc o Marit ime. Proportio n of Capex: 5% Arra y Cable s Offsh ore Subs tatio nsBalan ce of Plant refers to all major equip ment requi red for the comp letion of an offshore wind farm exclu ding the wind turbin e and towe r. Balan ce of Plant is the secon d largest expense item in the offshore winds Cape x structure and is highly sensitive to such param eters as water depth , distan ce from shore and wind farm powe r outpu t. HVAC (high voltage altern ating curre nt) and HVD C (high volt- age direct curre nt) cable s carry the electricity from the offshore subst ation(s) to shore . HVD C techn ology becomes increasingly economic over longe r distan ces. Supplier Exam ples: ABB, Nexa n, NKT Cable s, Prys- mian Grou p. Proportio n of Capex: 4.8% Onsh ore facilities transforming powe r to grid voltage. Supplier Exam ples: ABB, Areva T&D, Atkin s, Bladt, Harla nd and Wolff, Heer ema, McNulty Offsh ore Cons truction, Siemens Powe r Trans mission. Proportio n of Capex: 2.5% Expo rt Cable s Onsh ore Subs tatio ns 2015 Douglas-Westwood 51 World Offshore Wind Market Forecast 2015-2024 By purch asing this docum ent, your organ isation agree s that it will not copy or allow to be copied in part or whole or otherwise circula ted in any form any of the contents without the writte n permission of Douglas-W estwo od Segment Forecasts: Wind Turbines by Country Chapter 5 : Market Forecasts Over 10,20 0 turbin es are expected to be installed 2015-2024 . China , the UK and Germ any will accou nt for the majority (65% ). 25% of all wind turbin es are to be installed in China , as more proje cts start to come online, includ ing developm ents in the Zhe- jiang Provi nce Daish an, and the Huan eng Mega Farm. The UK is the secon d largest market, ac- counting for 21% of turbin es installed over the next decad e aroun d 400 turbin es are expected to be installed at the large Dogg er Bank proje ct by 2022. Over 2,100 turbin es will be installed offshore Germ any by 2024, sprea d acros s a large numb er of 80 turbin e proje cts such as Veja Mate, Arum bank West and Jules Verne , which are just a few exam ples.The numb er of turbin es is declin ing as larger turbin es (6MW +) are increasingly used, with 0.25 turbin es per MW installed 2021-2024 , comp ared to 0.17 for the 2015- 2020 perio d. Over 10,00 0 turbines will be instal led over the next ten years . China, the UK and Germ any will ac- count for 65% of instal lation s.The UK accou nts for over 20% of turbines. Average turbine size is increasing resulting in fewer turbines per farm. Figure 37: Wind turbin es installed by country, 2015 -2024 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Num berofTurb ines UK Germ anyChina USA Franc eSwed enSouth KoreaRest of World Table 10: Wind turbin es installed by country, 2015 -2024 Turb ines 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 UK 283 - 99 216 356 316 256 400 - - Germ any 485 - - 189 293 80 347 507 214 43 China 262 212 508 883 372 275 50 - - - USA 1 1 11 141 - 70 150 - - - Franc e - - 13 - 75 227 135 - 100 - Swed en - - - - - 500 - 141 - - South Korea - 30 12 9 28 - - - - - Rest of World 125 122 154 298 709 136 22 145 230 - Total 1,156 365 797 1,736 1,833 1,604 960 1,193 544 43 2015 Douglas-Westwood 49 World Offshore Wind Market Forecast 2015-2024 By purch asing this docum ent, your organ isation agree s that it will not copy or allow to be copied in part or whole or otherwise circula ted in any form any of the contents without the writte n permission of Douglas-W estwo od Annual Capital Expenditure by Type Chapter 5 : Market Forecasts Figure 30: Expected annua l offsho re wind Capex, 2015 -2024 0 20 40 60 80 100 120 140 Plann ing Turbine BOP Installation Cape x(billions) Figure 31: Planning and Developme nt Capex, 2015 -2024 , millions Figure 33: Wind Turbin e Annual Capex 2015 -2024 , millions Figure 32: Balan ce of Plant Annual Capex 2015 -2024 , millions Figure 34: Installation Annual Capex 2015 -2024 , millions The figure above illustr ates the avera ge annual level of globa l offshore wind Cape x from 2015-2024 in relation to the four spend ing categ ories. Based on our resea rch of the cost structure for offshore wind, the categ ory totals have been further segm ented in the figure s oppo site to show the avera ge expected market size for each sub-s egme nt such as surve ys, support structures, and cable s. Geot echnical Surve y 4,195 Offsh ore Subst ation 14,98 1 Offsh ore Subst ation 2,697 Onsh ore Subst ation 7,490 Onsh ore Subst ation 1,798 Trans ition Piece s 9,588 Cons truction Ports 3,296 Wind Turbines 11,98 5 Geop hysical Surve y 1,198 Expo rt Cable 14,38 1 Ex