MONEY MATTERS
FEATURE SPONSOR
TRACKING THE PATHWAYS TO COST REDUCTION
Cost reduction in offshore wind has been the big issue facing the industry particularly over the past 18 months. This has only intensified following the strike price announcement in June, which has left many developers concerned about the viability of their projects.
OFFSHORE COST REDUCTION PATHWAYS STUDY
The magic figure is £100/MWh and in May 2012, BVG Associates delivered the technology workstream for The Crown Estate’s Offshore Cost Reduction Pathways Study. This not only identified the prospects for lower cost of energy but also highlighted the signs that we should look for in understanding how much progress has been made. We have recently reviewed our analysis and the picture of progress toward the industry goal is mixed.
Dr Alun Roberts PROGRESS ON TRACK
Central to cost reduction is the development of ‘next generation’ turbines and the good news is that progress is on track. The number of turbine manufacturers eying the offshore market has dwindled but those that remain are forging ahead with new products. Siemens has recently installed two of its 6MW offshore turbines at Gunfleet Sands III and Alstom and Samsung Heavy Industries are planning to install their offshore prototypes this year.
DEEP WATER PROJECTS
With the introduction of larger turbines and the trend towards deeper water projects, there has been considerable interest in developments in foundation technology. For many developers, jackets are the natural choice, but the bespoke production process used for these structures in the oil and gas industry will be too expensive an option for offshore wind. R&D in radical designs continues, but the emphasis is now on making marginal cost savings on the standard four-legged designs by standardising tubular and weld angles to enable high volume production and reduce material costs. Progress is being made, but market uncertainty has delayed the investment needed to realise the potential for cost reductions.
INCREASED CAPACITY ARRAY CABLES There is better news concerning the introduction of 66kV array cables, which offer increased capacity on each string and lower electrical losses. With support from The Carbon Trust Offshore Wind Accelerator, 66kV products are now expected to be available to the market in 2015.
INSTALLATION
For installation, the focus has been on fit-for- purpose vessels that can operate in a wider range of weather conditions. There has been significant investment in third-generation turbine installation vessels which are larger than their predecessors and with greater lifting capacity.
There is still concern, however, that specialist foundation installation vessels are not progressing from the drawing board. The cable installation market is maturing fast, but the vessel fleet is largely assembled from ships designed for the oil and gas and telecoms market. As cable installation is a high risk activity with low margins which means that investment in bespoke vessels is unlikely unless there is change.
INDUSTRIAL STRATEGY
The forthcoming UK Government industrial strategy is expected to build on recent developments such as the establishment of the Offshore Renewables Catapult, Offshore Wind Industry Council and Norstec, to galvanise industry efforts in the UK on innovation and cost reduction. With these collective efforts, there are good reasons for believing that the offshore wind industry’s ambitions for cost reduction can be realised.
Dr Alun Roberts BVG Associates
www.bvgassociates.co.uk
52
www.windenergynetwork.co.uk
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