Navigant Research Blog

Floating Offshore Wind Showing Potential

— November 1, 2017

Offshore wind is notching up impressive cost reduction success, evidenced by record low power purchase agreement prices in recent UK and other European competitive bidding auctions. This is great news, but the game changer is if floating offshore wind foundations could achieve commercial success.

This could reduce offshore wind foundation costs and open cost-effective wind power in locations coincident with large coastal population centers, energy demand, and deep ocean sea beds that currently aren’t cost-effective with today’s variety of fixed bottom foundations. Potential markets are the entire west coast of the Americas, Hawaii, Japan, South Korea, parts of China, South Africa, New Zealand, and many European markets, including much of the Mediterranean.

Floating Offshore Wind Becoming a Reality

With that context in mind, it’s great news to see that floating offshore wind is moving from the conceptual and design phase to actual projects. In 4Q 2017, Norway’s Statoil installed a 30 MW wind farm on the northeast coast of Scotland. It is made up of five 6 MW Siemens turbines installed on floating structures at Buchan Deep, 25 km off Peterhead, Scotland.

The Hywind Scotland wind farm is expected to power around 20,000 households. Statoil believes the project will demonstrate the feasibility of future commercial floating wind farms “that could be more than four times the size.” From the first pilot floating turbine outside Karmøy, Norway in 2009 to the launch of this new wind farm, capital costs have fallen by around 60%-70%. Statoil says cost reductions of a further 40%-50% are realistic for future projects.

Hywind Scotland Wind Farm

(Source: Statoil)

Hywind Scotland

The Hywind project will cover around 4 square kilometers at a sea depth of 95-120 meters. The floating turbines have a total height of 253 meters, with 175 meters of the structures floating above the surface of the sea (to the wingtip) and 78 meters submerged underwater. The rotor diameter is 154 meters. This is only the first step of the project, with the end goal being to develop a large-scale floating offshore wind project of 500 MW-1,000 MW. Statoil is a serious company with serious money backing its efforts, including the company agreeing in a competitive auction round in December 2016 to pay $42.4 million for lease rights to develop an offshore wind project off the New York coast.

Following France’s Example

The Hywind launch comes on the back of the inauguration of France’s first floating offshore wind turbine—Floatgen—in October and represents an important breakthrough for floating offshore wind. It shows it is ready to be integrated into the energy market. Floatgen’s 2 MW turbine features a number of innovative solutions, from the concrete composition and its construction to the nylon mooring lines.

The consortium developer Ideol has optimized some areas of the design and the construction method. It is building its supply chain in preparation for mass production, all with an eye to driving costs down. Ideol says its solution is ideal because it is compact and does not need to increase in size and mass at the same ratio as the turbine nameplate rating. Ideol says it can potentially be adapted to turbines up to 15 MW, the size range the leading turbine OEMs are planning for next-generation 2025-2030 offshore installations.

Offshore Wind Soon to Be a Legitimate Power Option

Floating offshore wind is not yet commercially viable against fixed bottom foundations. Plenty of fixed bottom locations are available, but these two projects show that commercial viability just around the corner. If the past decade has been any guide, with the costs of onshore wind falling 77% in the past 7 years, the wind market has been attacking challenges, costs, and other impediments and disproving doubters. Floating offshore wind is increasingly likely to prove its legitimacy as a cost-effective offshore wind option.

 

UK Offshore Wind Costs Plummet to Record Lows

— October 5, 2017

Offshore wind power costs are plummeting as wind turbines get bigger and European countries implement a variety of market-oriented competitive pricing schemes. The general pattern is to let wind project developers bid and compete for the lowest power purchase agreement (PPA) price at which they are still confidently willing to finance and build a wind project. The latest results of the United Kingdom’s Contracts for Difference (CfD) auction for 15-year contracts are being hailed as a breakthrough on price.

Contracts for Difference Awards

3,196 MW was awarded mid-September, divided to go to three projects. Project and price highlights are as follows:

  • Dong Energy will construct its 1,386 MW Hornsea Project Two with a winning bid at £57.50/MWh ($75.75/MWh). Staged commissioning is planned for years 2022 and 2023.
  • EDP Renovaveis (EDPR) also won its CfD bid at the same £57.50/MWh ($75.75/MWh) price for its 950 MW Moray Offshore Wind Farm East with a similar 2022-2023 completion timeframe.
  • Innogy (formerly RWE Innogy) won its CfD bid at £74.75/MWh ($98.48/MWh) for its 860 MW Triton Knoll offshore project.

Other Offshore Wind Wins

Technically, the lowest prices awarded recently for offshore wind are for the Borssele III and IV wind farms off the Netherlands, amounting to 700 MW at a new record low PPA price of €54.5/MWh ($65.2/MWh). This was awarded in December 2016 to a consortium made up of Shell, Van Oord, Eneco, and Mitsubishi/DGE. The next lowest price seen yet was awarded in September 2016 as part of Denmark’s nearshore tender to Vattenfall for its 350 MW Vesterhav Syd and Vesterhav Nord wind farms at €60/MWh ($71.79/MWh).

However, while both of those projects are nominally the lowest PPA contract price, the Borssele projects in the Netherlands and the Danish nearshore tender do not include the cost of transmission and grid connection. This cost is estimated to add another approximately $15/MWh-$20/MWh, which pushes their real price up to around the price level of the recent UK CfD projects.

Changes in the Past Few Years

These recent prices reflect a rapid drop from offshore PPA prices only a few years ago. Dong’s 1,200 MW Hornsea 1, which will go online in 2020, was guaranteed £140/MWh ($184.2/MWh) in 2014. Three years later, the recently awarded 1,386 MW Hornsea 2 will proceed at less than half the previous Hornsea 1 project’s cost. By comparison, the new low prices are coming in cheaper than the United Kingdom’s nuclear power.

In addition, in the previous CfD auction in 2015, two offshore wind farm projects won subsidies between £114/MWh and £120/MWh ($150/MWh and $157.8/MWh)—Neart na Gaoithe and East Anglia 1, respectively.

Other Auctions and Numbers

Recent April 2017 offshore wind auctions in Germany should also be mentioned. Dong and EnBW won power contracts for offshore wind plants totaling 1,490 MW with zero subsidies.

Large projects and ever growing turbine sizes are major reasons for the price drop. The latest generation Vestas 9.5 MW turbine can provide enough power for over 8,000 average UK homes. Siemens likewise has rapidly uprated its offshore platform to 8 MW, and the company is hinting at a 10 MW plus turbine for coming years. Dong and EDPR did not disclose the turbine nameplate rating expected for their latest wind projects, but size is likely to be between 10 MW and 15 MW per turbine. Larger turbine units generate more power and reduce the total number of offshore foundations needed for a given project size, thereby reducing construction, foundations, and inter-array cable cost.

 

Will 2015 Be Global Wind Power’s High Water Mark?

— June 9, 2017

Will 2015 be the high water mark for annual global wind installations? Navigant Research compiled its data for 2016 in its annual World Wind Energy Market Update report, and an enormous amount of wind turbine capacity was installed—over 54.3 GW. But this was a 14% annual decrease from the over 63.1 GW installed the year before. The downturn is largely the result of China dropping from 30.2 GW installed in 2015 to 23.3 MW in 2016 due to changing incentive rates in that market. Unless there are further incentive changes that foster another huge annual rush in China, the 63.1 GW installed in 2015 is likely to be the high water mark within Navigant Research’s forecast out to 2026.

The reality is that the global wind energy industry is a huge market that is no longer subject to the high annual growth rates it experienced in its infancy. Rather, it is a mature market seeing steady installations across most country markets and regions. In 2016, stable installation rates occurred in most countries outside of China—from the long established European countries to new markets in Latin America, Asia Pacific, Africa, and elsewhere.

Maturation Evident

Europe installed nearly 14 GW of wind power capacity in 2016, almost the same amount as the year before. This represents 25.7% of global capacity installed in 2016. Europe also had the distinction (for the first time) of having more wind energy installed than coal plant capacity. North, South, and Central America combined installed 12.4 GW in 2016, representing 22.9% of the global market in 2016. This is down from over 14.5 GW of capacity the year before. The downturn was partly due to less capacity added during 2016 in Canada and Brazil.

The United States led all countries besides China in 2016, and the US market is in the middle of wind plant construction boom. A long-term extension of incentives ramping down through 2020 provides much sought after policy stability. It also supports continued capacity expansion that is expected to peak, with over 10 GW of annual wind projected to be brought online in 2020. While there were some concerns at the start of the new presidential administration, having a Republican back in office is not expected to alter this wind build cycle since it is based on a tax credit phaseout deal coded into law prior to 2017.

Wind power capacity continues to surge in Mexico as its policies and energy demand show the foundation for steady growth while energy deregulation secures a windy future. Chile and Uruguay saw strong installation rates to bolster capacity in Latin America.

The combined markets of South and East Asia represented 49.7% of global wind power capacity in 2016, down from 52.6% in 2015. China’s market strength again propelled global growth, with 23.3 GW, followed by India with 3.2 GW. India is experiencing steady and substantial year-over-year growth in installations and should prove to be a stable large market going forward, driven by new policy changes and insatiable energy demand from an enormous population.

Momentum Offshore

Offshore wind continued its successful build cycle of 2.2 GW in 2016, bringing the total cumulative capacity of offshore wind to 13.5 GW. The majority of capacity came from Europe, as expected, led by the Netherlands and Germany. China ramped up its offshore wind capacity in 2016 as well, with multiple turbine vendors installing capacity and pushing the country’s cumulative offshore wind online to over 1 GW.

Looking forward, wind installations in 2017 are projected by Navigant Research to increase slightly by 1.7% to around 55.3 GW. Annual installations are expected to average around 51.9 GW between 2017 and 2021. This is a downward revision from 54.2 GW from the 2016 World Wind Energy Market Update report due to lower installation levels expected in China and Germany.

 

Building a Better (and Bigger) Wind Turbine

— February 11, 2016

Der Rotor wird angesetztIn early 2014, MHI Vestas, a joint venture between Vestas and Mitsubishi Heavy Industries, announced its new V164-8.0 wind turbine. Designed for offshore use, the massive wind turbine is currently the largest in production and already has secured orders at multiple offshore wind farm projects including the Burbo Bank Extension, the Walney Extension, and the 448 MW Borkum Riffgrund II project in Germany. At 80 meters long, the blade is the largest in the industry, not counting the 83.5 meter blades used in the Samsung S7.01-171 turbine currently in limbo. A team of researchers has been given a grant by the Department of Energy’s Advanced Research Projects Agency-Energy program to develop a 50 MW wind turbine that would require a blade at least 200 meters long. The idea is that a single machine capable of producing the same amount power normally generated by 10 to 20 machines will reduce overall construction and maintenance costs.

Researchers from several different institutions will collaborate to design this massive turbine. Led by the University of Virginia, the project will also include engineers from Sandia National Laboratories, the University of Illinois, the University of Colorado, the Colorado School of Mines, and the National Renewable Energy Laboratory. Corporate advisors will include Dominion Resources, General Electric (GE), Siemens, and Vestas. The project will be a continuation of the work Sandia has completed on a 100-meter blade (328 meters in diameter) that would go into a 13 MW wind turbine. Doubling the length of a turbine blade is no small task. Segmenting the blades can help solve the construction and transportation issues; however, the massive weight and associated blade fatigue, peak stresses, and cost are major limiting factors.

Cutting the Weight

Sandia has experimented with several different technologies in an attempt to reduce the weight of the blades. The addition of a carbon spar cap, new core materials such as balsa, and flatback airfoils have all been examined. The company accomplished a weight reduction of over 50% from its original 100-meter blade design, which weighed in at 114 tons. Studies and testing have continued in order to quantify potential issues such as tip deflection, panel buckling, flutter speed, and aerodynamic design load.

Palm Trees for Turbine Inspiration

Adam Wilson Blog

(Source: Popular Science)

These blades will utilize a design called the segmented ultralight morphing rotor. They will be built and assembled in segments to avoid the difficult logistics of transporting blades built as a single unit. Because of the blades’ adaptability to windflow, they will have less structural mass (i.e., ultralight). Unlike conventional turbines that are configured upwind of the rotor, these turbines would be placed downwind. This feature, combined with the segmented nature of the blade, allows them to bend forward in order to reduce stress in strong windstorms such as hurricanes. This feature was inspired by the way palm trees move in wind storms. When speeds are within the optimal power-producing range, the blades will spread out in order to maximize energy generation.

Chances are slim to none that this technology makes it into the marketplace anytime soon, if at all. However, people today are surrounded by once seemingly impossible technology deployments from the nano to macro scale. At the very least, research projects like this are showing that when it comes to advancements in wind turbine technology, turbine vendors and researchers alike are not afraid to think big.

 

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