European offshore wind (especially in the North Sea) has been developing very well. Volumes continue to increase, new turbine and foundation technologies are being developed and deployed, and costs are coming down in a spectacular fashion.
But let’s not fool ourselves that the situation in the North Sea is typical. It has large areas of relatively shallow waters quite close to shore and good wind conditions, making it near-ideal for offshore wind development. For offshore wind to go truly global it will need to exploit regions of much deeper water, which means floating foundations.
Right now, we are in the early stages of floating offshore wind with demonstration projects being developed in the UK (Scotland), France and Japan. As a result, volumes are low and costs are high – total project CAPEX for the 24MW projects in France is expected to be around €7-8m per MW. This is over three times the CAPEX per MW for a large commercial offshore wind farm on fixed foundations in a good site.
Costs will reduce as installed volumes and project sizes increase, through supply chain efficiencies, specialisation, facility utilisation, design optimisation, overall learning and risk and finance cost reduction. BVGA calculates that we will need to see around 5GW of floating offshore wind deployed by 2030, to drive its cost down to a level that means global governments will see floating offshore wind as a ‘no-brainer’ to be a substantial part of their energy mixes.
The good news is that BVGA’s latest forecast indicates we should pass this 5GW figure for installed capacity of floating offshore wind at the latest by 2030. The three key markets of Japan, France (Mediterranean) and US (Pacific) account for over 80% of this, with other potentially significant markets being Taiwan, Korea, China and the UK (Scotland).
The drive in Japan and France appears strongest – both have major population centres near deep-water areas, and they’re not already hooked on lower-cost bottom-fixed wind. Statoil is driving a global agenda for its Hywind technology, and it is predicting an optimistic (but not impossible) installed capacity of 12GW by 2030. Other technology developers and service providers (especially in Scotland and France) are also gearing up to help deliver the roll-out of floating offshore wind.
The biggest obstacle to achieving the required cost reductions is not, however, the volumes to be deployed. It is to do with the ability of later technologies and projects to build on and benefit from the learning of earlier ones. In the North Sea, a lot of this learning has happened naturally. In a small but growing industry in a constrained area, the same suppliers were used on multiple projects, developers learned of success and failures on other projects and people have moved between companies. Even before the type of sharing initiatives put in place by the offshore wind programme board in the UK and similar activities in Denmark, substantial learning took place.
The floating market is global, and being pursued by strong supply chains from a number of countries. In this situation, we need the big developers to share information and learning on the basis that they have more to gain (from enabling a major global market) than they have to lose. Those countries that invest in floating projects need to be demanding of developers about learning (and cost and risk reduction) from other projects being brought into current projects, and about how new learning is translated into cost and risk reductions for future projects.