Earlier this year, the UK’s Crown Estate announced the successful bidders for each of the nine Round 3 offshore wind zones within UK coastal waters. The massive roll out of electricity generation from offshore wind is seen by many as a significant long term investment opportunity, which has the potential to create thousands of jobs in the UK, as well as securing a marine renewable electricity source. Round 3 offshore wind energy generation aims to deliver a full quarter of the UK’s total electricity needs by 2020.
All parties have now signed exclusive zone development agreements with The Crown Estate, which assumes responsibility for renewable energy in UK waters, to take the proposals through the planning and consenting phase.
The developers who have signed exclusivity zone agreements are:
1. Moray Firth zone, Moray Offshore Renewables Ltd which is 75% owned by EDP Renovaveis and 25% owned by SeaEnergy Renewables – 1.3 GW
2. Firth of Forth zone, SeaGreen Wind Energy Ltd equally owned by SSE Renewables and Fluor – 3.5 GW
3. Dogger Bank zone, the Forewind Consortium equally owned by each of SSE Renewables, RWE Npower Renewables, Statoil and Statkraft – 9 GW
4. Hornsea zone, Siemens Project Ventures and Mainstream Renewable Power, a consortium equally owned by Mainstream Renewable Power and Siemens Project Ventures and involving Hochtief Construction – 4 GW
5. Norfolk Bank zone, East Anglia Offshore Wind Ltd equally owned by Scottish Power Renewables and Vattenfall Vindkraft – 7.2 GW
6. Hastings zone, Eon Climate and Renewables UK – 0.6 GW
7. West of Isle of Wight zone, Eneco New Energy – 0.9 GW
8. Bristol Channel zone, RWE Npower Renewables, the UK subsidiary of RWE Innogy – 1.5 GW
9. Irish Sea zone, Centrica Renewable Energy and involving RES Group – 4.2 GW
Following the announcement of the successful consortia, each of these developers is now gearing up to deliver an additional 25GW of electricity generating capacity from offshore wind by 2020.
Faced with such an ambitious target, it is likely that developers will need to refine their operations for wind turbine installation.
A key challenge will be to improve supply chain performance in order to overcome component sequencing and delivery challenges, preventing bottlenecks and delays.
Other major challenges for developers include transportation, vessel and port selection issues to facilitate this unprecedented expansion in UK offshore projects.
Kaj Lindvig, CSO at A2SEA Offshore Installation, suggests that cost-effective solutions will vary by location. “The most cost-efficient solution could differ from a west coast to east coast UK project to a North Sea German project; they all have different logistics to handle,” says Lindvig.
For larger projects, for example on the UK’s east coast, he suggests deploying bigger vessels to harbours located near the production site, where vessels could collect several turbines at a time.
He also warns against the false economy of substituting a larger, more expensive vessel for a simple barge or small vessel feeding installation cranes on-site.
“If you look at the logistics, the time is then used to unload at sea, and unloading at sea is very complicated, time consuming and cost consuming,” he explains.
Offshore wind hubs needed
Kurt Thomsen, CEO of Advanced Offshore Solutions, says there is a need to develop offshore wind hubs, where turbine components would be manufactured at a number of European ports.
He argues that economies of scale can be achieved by loading more components onto bigger vessels. In this respect, Thomsen envisages the industry will increasingly favour large, self-sustained ships.
Consequently, size and capacity considerations will necessitate assembly and perhaps even manufacture, of the components within the port facility itself.
“In the end you will have three, perhaps four, large European wind hubs,” he predicts.
Variety key to success
Andrew Smith, director of energy consultancy London Analytics, suggests that a variety of approaches at the outset will be key to identifying the most cost effective installation strategy.
He refers to the Beatrice demonstration wind farm as an example of how constraints and new challenges triggered a variety of players to deliver innovative solutions, such as on-quay assembly of the turbines, which were floated to site, and the use of floating cranes in lieu of jack-up barges.
Smith is confident that the Crown Estate’s decision to select nine different consortia for each of its nine zones will ensure the maximum variety of approaches.
“We’ll be seeing a lot more diversity in approaches to installation as the market experiments,” he says.
Overcoming vessel and specialized installation equipment shortages in order to reduce the stresses of offshore turbine installation will also be a key challenge.
Smith warns that long-term government commitment and regulatory certainty is crucial if overall momentum is to be sustained.
“Those assurances will lead to finance being channelled into expanding the supply-chain within Britain. Without those assurances, Britain will be forced to continue to buy in services as it needs them, resulting in delays, unnecessary expense, and exported jobs,” says Smith.
With reference to port facilities and vessels, Marc Mühlenbach, analyst at Emerging Energy Research, says the recent surge in construction and build-out will be key for overcoming capacity shortfalls.
However, he cautions developers to ensure that a sustained period of innovation and construction does not tip the current state of undersupply into one of overcapacity.
“The crucial thing to consider in the long-term is the danger of a booming capacity build-out for what will eventually become a curbed growth in terms of installations,” he says.
Providing an alternative angle, Lindvig argues that the crucial criteria on which to judge each approach will be cost savings and time.
“You must always look at the cost and the time. It is not always the cheapest or the lowest cost solution but it is also the most efficient solution,” he said.
Thomsen similarly highlights the central importance of managing expenditure. “The biggest threat to an offshore project is really the fact that you overspend, because it’s going to take you years and years and years to earn that money back.”