Global growth in offshore wind is expected to create high levels of demand for subsea cabling and installation services, but faults continue to occur and can be expensive
More than 16,300 km of subsea power cables will be needed over the next five years in order to build new offshore windfarms worldwide, according to a new report.
The study, Offshore Wind Cables Installation and Manufacturing Forecast 2019-2029 also shows the value of the global market for these cables will grow by 57% from £717M (US$917M) in 2019 to more than £1.13Bn (US$1.45Bn) by 2023.
According to RenewableUK’s Project Intelligence team, which compiled the report, global offshore wind capacity will grow quickly from 20.5 GW today to more than 55 GW in 2024, largely driven by new projects in the UK, Germany, Taiwan and the US.
The report shows the global growth of offshore wind is creating ‘huge’ opportunities for manufacturers of array and export cables, with more than 9,600 km of array cables and 6,750 km of export cables needed between 2020 and 2024.
However, less than 25% of the cables required have been contracted to date, which means there is a huge opportunity for manufacturers, suppliers and other companies involved in producing and installing offshore wind power cables.
Commenting on the report, RenewableUK’s chief executive Hugh McNeal says “Our future energy system will be dominated by renewables with offshore wind playing a leading role, so these subsea cables are vital pieces of equipment when it comes to delivering the low carbon transition, as well as creating global opportunities for manufacturing and investment. As this report shows, the unparalleled growth of offshore wind is creating large economic opportunities for the supply chain.”
A few years ago, the offshore wind market was restricted to a small number of European markets. While these countries remain market leaders with significant future ambition, offshore wind is now a truly global opportunity, with rapid growth in the Asian and US markets in particular.
The annual rate of global array and export cable installation is forecast to nearly double in the next five years, with total installations for both types of cables increasing from 1,642 km in 2019 to 2,647 km in 2024. 2019 installations of array cables and export cables are due to be 846 km and 796 km respectively. These figures will greatly increase in 2024, with array cable installations forecast to be 1,741 km and export cable installations totalling 906 km.
RenewableUK estimates the manufacturing value of array cables being installed in 2019 will be more than £238M (US$304M) and export cables will be more than £479M (US$612M). The value for 2024 installations will increase to £504M (US$644M) for array cables and £539M (US$689M) for export cables.
Installations of array cables are forecast to be at their highest rate in 2028, with 2,928 km of cables due to be installed in that year. The manufacturing value for array cables being deployed in 2028 will total £875M (US$1.12Bn).
These installations are being driven primarily by projects in the UK and US, Ireland and Vietnam. The latter two countries have yet to establish a commercial offshore wind sector, however RenewableUK forecasts they will being developing large-scale projects towards the end of the next decade.
Export cable installations will peak in 2023, with 1,951 km of export cables due to be installed in this year. These installations are being driven primarily by projects in the UK, Germany, Taiwan and the US. The global cable manufacturing value for 2023 is forecast to reach £1.13Bn (US$1.44Bn).
However, despite the fast pace of growth in the cable-lay segment of the offshore wind industry, RenewableUK also recently highlighted that many challenges remain and the industry needs to collaborate to better manage cable issues. Among the issues it highlights are the need to address faults, drive down costs, issues around skills and personnel, regulation and information sharing and collaboration.
Regarding faults, stakeholders have found there is a trend towards higher than expected
levels of faults, and a lack of industry-wide data sharing makes it difficult for asset owners to predict their likely rates of failure.
“With industry focusing a lot of its attention on corrective repair rather than maintenance it would appear the market is tending towards firefighting,” says RenewableUK, “although there is a recent trend towards frameworks with cable repair service providers (see below).
An analysis of faults suggests they break down into:
It should be noted that human error accounted for 80% of all recorded losses since 1991 according to one insurer.
Codan Forsikring global sales and business development manager Jonas Dalsgaard told RenewableUK’s most recent conference on cables for offshore wind that certain types of fault can be particularly expensive to remedy.
Codan Forsikring’s assessments for interconnectors and offshore wind showed that more than 40% of claims were cabling related and covered more than 80% of total claims costs. This was primarily driven by vessel costs, whereby vessel charges – which can range from €80,000 (US$102,000) per day to as much as €225,000 (US$288,000) – account for more than 60% of claims cost allocations and regularly contribute to a total figure of over £10M (US$13M) per repair – though export cables are averaging six months and around £20M (US$26M) per repair. Array cables tend to be replaced in-situ rather than repaired, a process that can take three months and cost around £3.0M (US$3.8M).
Mr Dalsgaard said it was widely recognised that weather – and specifically the impact of weather on key vessels – was a major driver of cost. He stressed the importance for cable owners and operators of demonstrating they have strong risk management in place, including but not limited to, repair frameworks (see below), spares, asset monitoring programmes and sufficient up-front data from surveys to ensure informed decisions could be made.
Framework agreement has many benefits
Earlier this year, Global Marine Group, supported by its business units Global Offshore, Global Marine and CWind, signed a framework agreement for cable repair with offshore windfarm developer and operator Ørsted through the Atlantic Cable Maintenance Agreement. This is a new way of working for the offshore renewables industry, although an approach which has been tried and tested in the telecoms sector.
Global Offshore director of cables Andrew Lloyd highlighted that in addition to growing demand for cable installation, a comprehensive approach to cable maintenance, repair and replacement is needed in the industry.
He said the approach adopted by Ørsted also integrates many of the supplementary services related to cable installation and maintenance as well as pre-mobilised vessels and pre-engineered repair scenario planning. “Wrapping support together in this way makes the process much more convenient for operators via a single service provider which seems to be the preferred approach for many in the industry,” said Mr Lloyd.
“In-situ repairs to rectify faults within the confined space of each affected turbine, temporary power for both planned and unplanned power outages, logistics and personnel, plus cable pull-in teams, termination and testing can be delivered to support the main cable works delivering a turnkey solution for installation as well as ongoing operations and maintenance.”