Speed is of the essence when it comes to cutting costs

Kate Freeman‘s presentation at the Offshore Wind Journal conference obviously made a great impression. David Foxwell, editor of Offshore Wind Journal, covered the topics in her presentation extensively in the Offshore Wind Journal article  ‘Speed is of the essence when it comes to cutting costs’.

The article includes the following reporting from Kate’s presentation:

But they’re also going to need to get faster, because, as Dr Kate Freeman, an associate at BVG Associates told the conference, time is money, and installation process has a direct influence on the cost of energy from offshore windfarms.

Capex and opex spend both influence the cost of energy from offshore wind, and servicing finance cost is a large part of the overall cost. Speeding up installation moves capex closer to the time at which you pay off debt and it brings down the cost of servicing finance.

As equipment gets bigger – principally as turbines get larger and larger – advantages accrue. There are fewer sites to build and connect; fewer turbines to block wind flow for the others; and fewer pieces of equipment to go wrong. However, as Dr Freeman pointed out, bigger kit needs bigger vessels that can handle larger structures.

“Many people were surprised by the rapid introduction of 8 megawatt (MW) turbines,” she told delegates. “There was a lot of investment in turbine installation vessels but the fleet no longer looks fit for purpose. There have been upgrades to vessels (to the legs they use to jack-up and to cranes), which can plug the gap in the short term, but are there any vessels that can install a 10MW+ turbine?”

So, is there a business case for a new vessel or new class of vessels? Looking ahead at what the industry will be installing five years from now, we could easily be looking at 9-11MW machines; in a decade from now, maybe 10-13MW machines. No ship out there can do that now – and it’s arguable that if the industry really is moving to such large turbines other ways of installing them will have to be found.

But whether it’s a massive installation ship or a ‘tow it out and sink it’ approach, the drive for cost reduction will cause project developers to focus on those areas where they can reduce cost, and speeding up installation is a prime example.

“You are going to see hard bargaining,” Dr Freeman told delegates. “Speed of installation as well as overall cost of installation can help reduce cost. Anything that you can do to have slicker processes will help. Anything that you can do to avoid weather downtime will help. Turbines are going to get a lot bigger. Project developers are banking on this and are banking on being able to handle them.”

You can read the full article on the Offshore Wind Journal website.

2017-02-08T15:47:41+00:00 08/02/2017|News|