Floating offshore wind has huge potential, but where will the first commercial-scale projects be built, by whom, and is there sufficient political support in Europe for the sector, despite its considerable advantages as a huge export market?
Floating Offshore Wind UK 2018 in Aberdeen in October provided an excellent opportunity to take the temperature of the floating wind energy market.
Currently, the main potential markets in Europe for floating wind include France, Spain, Portugal, Ireland and the UK, which have large, deep territorial waters, significant wind resources and high population and industrial activity densities near the coastline. There is also a very significant export market for floating offshore wind.
UK industry bodies believe floating wind has an important role to play in supporting the development of the offshore wind supply chain and can contribute to 50 GW of offshore wind in the UK by 2050. But although it is widely seen as the next ‘wave’ of offshore wind, the floating wind segment does not yet enjoy the high level of political support afforded to the UK’s bottom-fixed offshore wind segment. It is not expected to receive emphasis in the upcoming Sector Deal the offshore wind industry is negotiating with the government, and although pilot projects are under way and Hywind Scotland has been acclaimed as a massive success, the conference heard that commercial-scale floating wind projects are unlikely to be realised in the UK until the second half of the next decade. Moreover, early floating wind projects in the UK will need to compete with bottom-fixed projects, where costs have fallen steeply.
So why all the excitement about floating wind? The reason is that, as wind energy veteran Henrik Stiesdal told delegates at the event, “windfarms in shallow water are an anomaly” and “most future demand for offshore wind will come from deepwater, which means floating wind.”
Political support for floating wind may be a little lukewarm in the UK, partly because there remain plenty of shallow water opportunities in its waters, but speakers and delegates at the event agreed that opportunities for floating wind are developing quickly in other countries and floating wind is likely to take off first outside the UK unless government realises its massive export potential. RenewableUK’s executive director Emma Pinchbeck told the conference the UK “needs to get hold of this brand new market and own it or risk losing out to other countries.”
France, where bottom-fixed offshore windfarms have been held up for years, is pressing ahead with floating wind demonstrations and with an upcoming commercial-scale tender. In Norway, which has no offshore windfarms, two areas on the continental shelf are being opened up for demonstration/pilot projects that will provide an opportunity for industry to innovate and learn, enabling Norwegian technology and competence to develop in order to compete in a quickly evolving and growing global market.
Some almost purely floating wind markets – such as Japan – are expected to be huge. Floating wind is also taking off on the west coast of the US. Most attendees at the event agreed that the first commercial floating windfarms will probably not be built in the UK, although the potential for floaters is being considered by Crown Estate Scotland as part of its recently unveiled proposals to lease seabed to encourage a new generation of offshore wind projects in Scottish waters. Floaters have also been proposed off the southwest coast of England.
The authorities in Scotland seem to recognise the potential of floating wind even if their contemporaries in Westminster do not. Scottish energy minister Paul Wheelhouse told the conference the Kincardine demonstration project off the coast of Scotland “demonstrated the potential of floating offshore wind and Scotland’s potential role in it.” Scottish Renewables senior policy manager Fabrice Leveque said the announcement of first power from the Kincardine windfarm highlighted that Scotland “has a unique opportunity to reap the economic benefits of this emerging technology.”
Finding a route to market for floating wind was a major preoccupation for everyone at the event and opinion differed about the further value of demonstrators. Some see them as an invaluable way to gain experience and show what technology can do, others doubted their usefulness as indicators of future cost levels.
There is a gap that the industry somehow needs to bridge – described variously by speakers at the event as a ‘valley of death’ and a ‘chasm to be crossed’ – between demonstrators and commercial-scale projects.
Some kind of innovation revenue mechanism is required, they suggest, that will reward innovation until floating wind can compete on cost terms with bottom-fixed projects. Despite these issues, said Green Giraffe director Clément Weber, floating wind projects are already bankable, and insurable, and there are a lot of projects in the precommercial and early development phases.
Mr Stiesdal also made the point that in his view there are already too many floating offshore wind concepts that are technically interesting but which fail the test of whether they could be standardised and manufactured in volume. The floating wind market will need a technically advantageous concept that can also be industrialised, he told delegates. “Because they cannot easily be industrialised,” he said, “some will inevitably fail the economic viability test.
“For deepwater floating windfarms the yardstick will not be costs compared with bottom-fixed offshore wind,” he said. “The yardstick against which floating wind will have to compete is solar PV and storage,” a sentiment that Sebastian Bringsgaerd, Hywind development director at Equinor agreed with wholeheartedly.
Mr Stiesdal said when the floating offshore wind market takes off, the ability to industrialise concepts successfully will be a “super strong lever” and believes the TetraSpar concept his company, Stiesdal Offshore Technologies (SOT) is developing with oil company Shell, turbine manufacturer Siemens Gamesa Renewable Energy and energy company innogy is just such a concept. The companies plan to undertake a demonstration project using the innovative floating foundation that uses a tubular steel main structure with a suspended keel that Mr Stiesdal believes will provide important competitive advantages over existing floating wind concepts, with the potential for leaner manufacturing, assembly and installation processes with lower material costs.
In the run up to the Aberdeen event, a flurry of reports was released, with WindEurope setting out steps it would like policymakers in Europe to implement in order to cement a lead in the floating wind sector. The wind energy trade body believes the right policy measures could permit large-scale commercialisation of floating offshore wind. “As demonstrated this last decade with bottom-fixed offshore wind, speeding up the commercialisation process means driving down costs and contributing to European competitiveness,” said WindEurope. With the right visibility in terms of volumes and industrialisation, floating costs could tumble even faster than for bottom-fixed offshore wind, it believes, down from today’s €180-200/MWh (US$207/MWh) to reach €40-60/MWh by 2030.
WindEurope said European companies lead 75% of the 50-plus floating offshore wind projects currently in development across the globe. It sees floating offshore wind as a fast-maturing technology with huge potential but believes dedicated policies are needed to ensure Europe harnesses its full potential. “Floating offshore wind needs urgent action from the EU and member states to maximise the local economic benefits of a nascent supply chain. These should ensure that cost reduction continues through economies of scale, low financing costs and research and innovation,” WindEurope said. “Member states should set their ambitions for capacity, project pipelines and supporting policies for floating wind. The European Commission should publish the aggregated European volume of floating offshore wind projects to 2030 to enable a clear market visibility for investors and industry.”
A total of 55 innovations that could help reduce the levelised cost of energy from floating offshore wind have been identified in a report produced by InnoEnergy and BVG Associates. The joint report, Floating Offshore: 55 technology innovations that will have greater impact on reducing the cost of electricity from European floating offshore windfarms, is a companion to a previous report published by InnoEnergy in November 2017. InnoEnergy renewables technology officer Emilien Simonot said “We know that there is tremendous potential across the value chain for innovations to reduce the cost of floating offshore wind energy.”
A Crown Estate Scotland-commissioned study by the Offshore Renewable Energy (ORE) Catapult set out the potential benefits to the UK economy of floating wind development and the different types and costs of government support that may be needed. It is estimated up to 17,000 jobs and £33.6Bn (US$43Bn) of gross value-added could be generated by 2050.