The sky’s the limit for offshore wind!

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At ABN AMRO’s annual offshore wind conference, taking place this year in Amsterdam on 9 November 2017, leading industry players will discuss the latest innovations and optimisations in this sector and try to predict what is in store for ‘The Next Frontier’ of offshore wind. Lisa McDermott from the bank’s project finance team, which focusses on debt financing of projects such as large-scale wind parks discusses potential talking points.

The next frontier for offshore wind will not only entail us thinking bigger, but also smarter Lisa Mcdermott Executive Director within the Structured Debt team of ABN AMRO

“The world’s first ever offshore wind turbine was installed by DONG Energy in 1990, a ‘mere’ 0.45MW machine, one of only 11 turbines making up the 5MW Vindeby wind farm, 1.8km off the coast of Denmark. Fast forward 25 years and the same party is now building a 1.2GW, 174 turbine wind farm , 100km off the coast of England. Offshore wind is clearly scaling up. But is it also growing up?

Developments and ambitions

The offshore wind sector has experienced extraordinary exponential growth in recent years, most clearly epitomised by an almost three-fold increase in wind turbine generator capacity: from the 3.6MW turbines inaugurated in 2013 at 630MW London Array (the world’s current largest offshore wind park) to the 9.5MW machines available for order in today’s market. Greater power production per turbine boosts revenues per Euro invested, but also delivers important savings on operational and maintenance costs - optimisations desperately required by the European offshore wind industry in light of the stark decrease in subsidies on offer for this technology. EnBW and DONG have promised to deliver subsidy-free projects in Germany by 2025 – but their ambition is predicated upon the deliverability of 13-15MW mega turbines.

Bigger and smarter

The next frontier for offshore wind will not only entail us thinking bigger, but also smarter. Deploying smarter turbine software, developing more sophisticated generation and transmission systems and unlocking the potential of battery storage alongside wind are all advancements likely to play a role.

Floating foundations

One of the biggest game changers, however, could come from taking a ‘bottom up’ look at the industry. The vast quantities of steel currently required to produce the foundations for offshore wind turbines (reaching heights of c.80m and weighing in at over 1500 tonnes) could be drastically reduced if the market were to embrace ‘floating foundations’. Suspended near the sea surface and anchored to the seabed, floating foundations are not only more environmentally-friendly than conventional monopiles, which must be piled deep into the sea bed, but they also have the added benefit of being able to be used in very deep waters (such as Japan and California), considered inaccessible for fixed bottom foundation structures. Floating foundations could also ultimately deliver a lower-cost alternative to fixed-bottom structures, given the potential for standardisation of design and the use of readily available installation vessels, according to Statoil and Principle Power, two first-mover proponents of this technology. However, for floating wind to have a truly buoyant future and achieve the levels of competitiveness witnessed to date in the fixed bottom market it must convince the industry of the need for its wide-scale deployment.

Futuristic?

But why stop at floating wind? Why not eliminate the wind turbine entirely and just take to the air? Since the tips of the blade of a turbine capture most of the energy, the airborne wind industry claims that all the concrete and steel in between is therefore largely redundant. Instead it aims to harness the stronger and more consistent power of high-altitude wind by using free floating devices such as balloons, kites or tethered wings, flying 300 metres and upwards. It may sound futuristic but companies worldwide, including Dutch-based Ampyx Power, are already planning offshore commercialisation by 2023. When you look at it like that it seems the sky could indeed be the limit for offshore wind.

Outlook

Technical innovation is clearly at the heart of the offshore wind industry and is outpacing expectations at rate unthinkable only a few years ago. In 2016, the cost of energy from offshore wind fell below the ambitious 2020 industry target of GBP 100/MWh a full 4 years ahead of schedule. Emboldened by such progress, US researchers, led by the University of Virginia, are now working on designs for colossal 50W wind turbine technology, in a bid to reduce energy costs by a further 50%. For some a wind turbine 5 times taller than the Statue of Liberty, generating 6 times the output of today’s largest machines, is truly unthinkable. However if the offshore wind industry has proved anything over the last 5 years it’s that even the unthinkable can quickly become reality.

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