A move into deeper water, and further from shore, helped drive up the price of offshore wind installations. One way the industry has sought to control prices is by scaling up turbine size.
While the move appears attractive to project developers, it faces push back from contractors who are becoming increasingly assertive.
The turbine and tower make up 45% of the installed costs for offshore wind projects, according to IRENA. Controlling these costs, therefore, will play a key role in the competitiveness of such plans.
IRENA noted that the growth of turbines offers “higher capital costs per MW of rated capacity than existing turbines, but they would allow for a much lower cost of energy through higher energy production and lower capex per MW for the foundations and installation”.
China’s Mingyang Smart Energy has set out its focus on increasing turbine sizes in order to reduce investment costs, maintenance and optimising generation.
This idea is changing, though. “There’s a way of thinking that the bigger the nameplate capacity of the turbine, the lower the cost per MW. This is an oversimplification. Bigger turbines require the entire supply chain to change, so bigger foundations, bigger quays, bigger factories – and bigger installation vessels,” Bracewell partner Tracy London told Energy Voice.
London highlighted the strain that the supply chain was under in the offshore wind sector. Contractors are often making “slim – or zero – margins”, she said. If offshore wind developers push too hard to win advantages, they run the risk of losing service capacity to oil and gas work.
Bigger and ever bigger
To a project developer, the allure of larger turbines is straightforwardly economic. Larger turbines reduces the number of installations and reduces the amount of maintenance activity.
Before 2018, offshore wind farms in Europe used turbines with capacity of 3.5 to 8.8 MW. That year, Vestas began offering its 10 MW turbine, from a turbine with a 164-metre rotor and 80-metre blades.
This was just the beginning. The next year, 2019, GE unveiled its first Haliade-X 12 MW. The company now offers variants on this model, with capacities up to 14 MW, with a 220-metre rotor and 107-metre blades.
Vestas now offers a 15 MW turbine, with 115.5-metre blades, while Siemens Gamesa offers a similar rated turbine with blades of 108 metres.
China, though, is leading the way in designing ever bigger turbines and also putting them into operation. In June 2023, Xinjiang Goldwind Science & Technology’s 16 MW turbine – with a rotor of 252 metres – was installed. The next month, Mingyang deployed its 16 MW turbine, with a rotor of 260 metres.
Chinese research continues to push growth. Shanghai Electric launched a design for a 263-metre rotor at an event in October, claiming it would be able to generate 18 MW.
But Mingyang is not resting on its laurels. Seemingly determined to stay ahead, the company has designed a 22 MW turbine, with a 310-metre plus rotor. It expects to develop this equipment in 2024-25.
Full business case
Vestas has more than 25 years of experience in offshore wind. It has moved away from the race for bigger turbines.
The company has pinpointed three main issues with a move to larger turbines. Albert Winnemuller, head of offshore product market strategy at Vestas, noted that the drive to realise global growth requires a laser focus for wind turbine generators (WTGs).
“This requires us to establish more efficient and robust supply chains and reliable, cost-effective operations, including installation vessels for foundations and WTGs, foundation suppliers but also suppliers of our WTG components,” he told Energy Voice.
Second, building turbines beyond 15 MW “seems to provide no upside in most of the cases when impact on the full business case is taken into account, for example, on foundations and installation”.
Finally, he raised concerns about the impact on profitability. Introducing new technology too quickly “before existing technology has been properly implemented, is not sustainable for offshore wind because it challenges profitability, quality, and value chain efficiency”, Winnemuller said.
Bracewell’s London agreed. “Pushing wind turbine sizes above 15 MW will cause an even greater supply chain issue. I think the industry should stick to 12-15 MW and focus on standardisation – although China may be a separate market,” she told Energy Voice.
Standardised
Europe has increasingly turned to discussions of standardisation. Much of the drive for this has come from the supply chain, rather than project operators. Contractors have been squeezed over recent years, but the pendulum may be starting to swing back in their favour.
While developers are keen to grow turbine sizes, saving them money and mobilisation, it is not straightforward to scale up. In Europe, in particular, there is pressure to move to standardisation.
In December, Siemens Gamesa and Vestas agreed to work together – with support from Energy Cluster Denmark – to standardise tower transportation equipment.
Vestas’ lead project manager Morten Baungaard Nielsen said this was a “natural step” in the industry’s growth. “It makes perfect sense for us to develop common standards so that we manufacturers do not have to take charge of large chunks of the logistics. By shifting more of our costs out into the value chain, we save money and boost our subcontractors’ business.”
The companies, and a number of subcontractors, have agreed to collaborate on common lifting equipment and tower base design.
Winnemuller explained that standardisation and industrialisation are at the heart of offshore wind progress.
“Without it, we will not be ready as an industry to deliver the required GWs in the years to come. This doesn’t mean that innovation has to stop – as an industry, we still need to keep innovating but there are also other angles to it than just WTG size, e.g. on sustainability and wind farm optimised control.”
Asian exception
It is apparent that China’s plans for wind – and particularly offshore wind – stand alone. In June, Global Energy Monitor reported that China had 31.4 GW of offshore wind installed, exceeding Europe’s total operating capacity and accounting for around half the world’s total.
© Supplied by MingyangIn the first half of 2023, China added 2.2 GW, according to World Forum Offshore Wind. The country is also building the largest amount of additional capacity, at 2.46 GW under construction as of mid-year. Taiwan is second, and the UK third.
Projects in China highlight the appeal of a move to larger turbines. The Zhangpu Liao Phase 2 will have 312 MW of capacity, while the Fujian Putian City Flat Bay Three Zone C will have 308 MW. The first will require only 21 turbines, while the second needs 44.
There are signs that other countries in Asia are keen to emulate China’s drive for offshore wind growth – and that larger turbines may play a part. RWE won a contract in December to work on a project offshore Japan, which will generate 684 MW, from 38 GE-provided turbines – each with 18 MW of capacity.
Global growth
The frictions playing out in European and Asian markets shed some light on how the sector will develop globally.
London described the drive for larger nameplate capacity as a “painful journey” for the supply chain. “There’s been huge development over the 20 years that I’ve worked in the industry – even before a model is proven and certified, the desire for the next larger turbine is kicking in,” she said.
“There’s a twofold question for wind turbines of a larger nameplate capacity. Can they be installed? And what is a long-term sustainable market?”
As markets develop, local pressures will come to the fore. In the US, for instance, initial exuberance for offshore wind projects has faded. Now, developers are renegotiating plans and in, some cases, abandoning them. Ørsted, for instance, cancelled its Ocean Wind 1 and 2 projects, citing “macroeconomic factors”.
The US has emphasised local manufacturing in its stimulus package for energy transition plans, including offshore wind. The country’s Jones Act also applies. This requires any ship working on projects to be locally owned and locally staffed.
While the sentiment – of capturing value locally – is understandable, this puts further roadblocks in the way of developing offshore wind in a tough environment.
Another country with high hopes for offshore wind is Brazil. In 2022, the energy regulator released that included plans from BlueFloat Energy for four projects, using 20 MW turbines. The company did not respond to a request for comment on its global turbine plans.
Alignment
“The industry will be able to achieve more benefits, and cost savings, if industry participants can reach longer-term contracts or partnership agreements across a portfolio of projects,” London said. “Developers need to understand the pricing context, in order to be able to bid the relevant contracts and right prices.”
Contractors have been caught in a bind, with pressure to keep up with ever-larger turbines. As the mood changes, and the supply chain start to push back and reject onerous contracts, opposition to investing in new equipment to support larger turbines is a symptom.
Offshore wind has the opportunity to grow in new markets playing a key role in the move to net zero. Whether this involves larger and larger turbines – or higher rewards in the supply chain and more moderately sized equipment will be a key area to watch.
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