Floating foundations continue to be a hot topic within the offshore wind sector. In the drive to reduce the cost of offshore wind, particularly for floating foundations, attention is often placed on choosing the ‘best’ technology and processes for projects. Floating foundation technologies are competing against one another as well as being collectively compared to their established fixed foundation cousins. While the technology is fundamentally important, it isn’t the only factor having significant influence on project costs. Have we lost sight of this as we debate fixed vs. floating?
Imagining how the leveilsed cost of energy (LCOE) of fixed and floating foundation projects vary with increasing water depth, for example, we might determine the water depth at which it makes commercial sense to use floating rather than fixed foundations. For a highly simplistic view of the technology costs and their relationships to water depth under otherwise constant conditions, this might look like:
Of course, the LCOE of a project is not perfectly correlated with water depth as the above chart suggests. Different projects using fixed or floating foundations will have their own capital and operational costs that are specific to the chosen foundation technology and these costs may themselves also vary with water depth. When we analyse how sensitive the LCOE is to these technology specific costs we see that the crossover point becomes a range rather than a single point, again shown simplistically as:
But the technology specific capital and operating costs aren’t the only factors that will determine the size of the LCOE crossover range. There are also factors that contribute to LCOE that are applied to the project more generally. These include factors such as the annual energy production, the cost of financing and project risk. When we consider how these factors can influence our fixed and floating projects’ LCOE we see a much wider crossover range than before:
What this tells us is that deeper water doesn’t necessarily mean higher cost of energy. In the hands of a capable developer, site selection and project design can make up for potentially higher capital and operating costs to achieve a lower project LCOE. As both technologies continue to mature, they each gain improved viability at intermediate water depths. The choice of foundation type then becomes an organisational or regional preference.
Of course, floating offshore wind still has some catching up to do. Even if the rumours of a commercial scale project on the horizon are true, the number of floating turbines will still be a very small fraction of fixed installations for a significant time to come. Fortunately floating can benefit from the wealth of learning we’ve already made (and still are making) in fixed offshore wind, not to mention that rates of technology advancement and cost reduction have also surpassed industry expectations before.
The fixed or floating debate is thus a false dichotomy. While some sites may be viable for both fixed and floating foundations, floating doesn’t exist to replace fixed. Floating foundations enable us to expand the global reach of offshore wind. Equinor’s future Hywind Tampen project in Norway (that wouldn’t be economically viable on fixed foundations) is evidence of that. The size of the prize is big enough for all, and if floating can mature in the way we expect then in turn it will support driving down LCOE across the industry. There will always be a choice between fixed or floating at the project level, but even now we can see an LCOE competition between the two is not relevant. We know it can produce two winners.