|Far out: if the industry can overcome the technical, regulatory and financial barriers to placing turbines more than 100 km fron shore, there is a vast amount of uptapped power to be channeled into Europe’s grids Source: Siemens|
How far is too far when it comes to placing wind turbines out in oceans? Everyone knows there is massive energy potential to be harnessed miles out to sea, but what are the barriers preventing the growth of far offshore wind farms?
Kelvin Ross, Deputy Editor
Offshore wind farms are a not uncommon sight from the shoreline of many European countries and their construction is continuing apace.
Yet the dream for renewable energy firms is the wind farm that you cannot see from land ” the far offshore project that can tap into stronger winds and deliver greater power into the grid.
Everyone in the industry knows that putting turbines far out to sea in deep waters will yield impressive ” and far less intermittent ” results compared to onshore and near-shore wind farms.
What they don’t have is a blueprint that combines the challenges of getting them there, installing them, maintaining them and ” critically ” securing the funding for all of this.
Jean Huby, AREVA Wind executive vice-president, says there are four key challenges for the industry in placing turbines far out to sea in deep water.
The first is having a technology that works and is proven. “No other solution can replace this,” he says. “For this, we believe offshore specific technology is required.
The second is getting experience in the logistics of installation and service and maintenance, while the third is securing top quality control and surveillance, limiting to the absolute minimum the work to be done at sea.
“At AREVA Wind, we have chosen to invest at our Bremerhaven site in a test facility where 100 per cent of the machines after production undergo a full load test and where we carry out a full pre-commissioning, thus limiting commissioning at sea and optimising quality,” he explains.
|Blade runners: while wind farms must be robust enough to withstand the wind and wave consitions of being far out to sea, the logistics of moving turbines to their location is just as challenging Source: Vattenfall|
And the fourth challenge is “a well-structured industrial base with production facilities that are well accessible and benefiting from the required infrastructure”.
In April, the US and the UK signed a pact to collaborate on developing floating wind turbines for deep waters. The countries will work together in the development of floating wind technology designed to generate power in deep waters currently off limits to conventional turbines but where the wind is much stronger.
This alliance is indicative of governments realising the opportunities that are waiting to be exploited off their shores.
Tresna Tunbridge, partner in the projects team at DLA Piper, the world’s largest law firm, says: “Much of the UK’s windiest coast is around the western seaboard where water depths can be anywhere from to 60″100 metres.
“Similarly, North Western Europe’s higher wind speeds are also to be found in areas of deeper water.”
She says that once shallower waters are developed ” and 80 per cent of the UK’s current Round 3 of wind projects is already in depths over 25 metres ” developers will need to move into deeper water.
And she adds that from a public acceptance perspective, far offshore farms have a big advantage ” they cannot be seen from land, cutting out the so-far constant threat to wind farms of NIMBY-ism (Not In My Back Yard).
“The potential of deep water wind farms is clearly attractive to developers and governments alike,” she adds, “which is driving the investment into demonstrating floating wind turbines, like Statoil’s Hywind, and the collaboration between the UK and US on floating wind turbine demonstration projects.”
Currently, the furtherst offshore wind farm is Bligh Bank, 46″50 km off Zeebrugge in Belgium in waters 32 metres deep, with 55 Vestas turbines that can generate 330 MW.
That distance is set to be beaten by the end of this year, when installation works will begin on the DanTysk wind farm, a $900 million project located 90 km off the Danish coast in the North Sea that is being built by Sweden’s Vattenfall.
Vattenfall’s offshore strategy is to target large scale wind farms ” such as East Anglia Offshore Wind, a joint venture with ScottishPower Renewables ” and clusters of nearby wind farms like Horns Rev, DanTysk, Sandbank and Nordpassage, which are all located in Denmark or Germany.
|While transportation and maintenance play a role, it is the financial viability and risk associated with such projects that will determine the future of far offshore wind farms,” says Vattenfall’s Grant Baskerville Source: Vattenfall|
If construction goes ahead as planned in 2015, Sandbank will be 110 km from the coast.
Grant Baskerville of Vettenfall Renewables says: “The real challenge for offshore wind is identifying suitable large-scale offshore wind development zones, which have excellent port availability and supply chain opportunities to help meet the development, construction, and operations and maintenance [O&M] requirements of proposed wind farms.”
He says large-scale offshore wind farms and clusters cut capital costs and bring synergies in operations and maintenance. However, he adds: “The further from shore an offshore wind farm is constructed, the greater the cost and, ultimately, the risks associated with development.
“In the future, cost and risk factors have to be mitigated through technological innovation and government-supported financial mechanisms, until the industry is more mature.”
And there lies the problem for the far offshore market. While it can influence and even dictate the pace of the innovation process and the logistics of getting parts from A to B, creating investor certainty is more of a grey area.
“The reality is that while technology, transportation and maintenance all play their respective roles, it is the financial viability and risk associated with such projects that will determine the future of far offshore wind farms,” says Baskerville.
This conundrum was recently highlighted from the financier’s point of view by Dipak Haria, associate director of Barclays Bank’s infrastructure and structured project finance team. He told an energy seminar that banks want to see “evolutionary rather than revolutionary” plans.
“If it’s a completely new turbine, we would need to see a lot of tests,” he said. Which is understandable, yet creates a higher hurdle for wind farm developers to jump, because ‘completely new turbines’ are exactly what will be needed to harness far offshore potential.
“When water depths are such that it is not feasible to construct foundations, the floating turbine model may well unlock new areas for development,” says Tresna Tunbridge, “but this is still at the demonstration stage.”
She adds that even the wind farms being built today “pose considerable construction challenges, prompting innovations in terms of foundations, installation methods, turbines and designing purpose built jack-up-barges, all designed for deeper water”.
“To the extent these developments are still establishing a track record, this obviously heightens the construction risk for developers, contractors and lenders alike,” she adds.
Tunbridge also highlights the Greater Gabbard wind farm as an example of “how costly it can be in an offshore environment when there are delays in construction due to foundation problems”.
Greater Gabbard, a joint venture between RWE npower renewables and SSE, involves the installation of 140 Siemens 3.6 MW turbines located around two sand banks 25 km off England’s Suffolk coast in the North Sea.
But work has stalled because the operators are taking legal action against Fluor Corp over what they claim are defects in the welding of the foundations for the first 52 of the site’s 140 turbines.
AREVA’s Huby says that far offshore wind farms are “difficult to finance without having an exact risk analysis of the planned project”.
Currently, AREVA Wind has 30 MW of offshore turbines at the Alpha Ventus site in Germany’s North Sea, located 45 km from the island of Borkum. It’s the first German far offshore project, built in about 30 metres of water. Six AREVA M5000 machines have been running at Alpha Ventus since 2009. However, AREVA’s next project will be even more ambitious: 80 M5000 turbines installed in a 40 metres of water up to 100 km offshore in the North Sea.
Huby says: “New offshore challenges need to be able to be calculated by banks and investors. Industrial players can only use their opportunity to present visibility and openness to create trust for this young offshore technology. Financing requires a track record, and therefore experienced players will have an advantage in sharing this with their customers.
“New dimensions concerning distance from coast or water depth need to be well analysed, and the project needs to give banks and insurances the possibility to win more trust in offshore wind energy.”
Regulation is a further area that is presenting barriers to the growth of far offshore wind. Baskerville says: “There are a number of regulatory areas that we feel could be streamlined and amended to help better stimulate growth in the sector. In the UK, the future of Electricity Market Reform [EMR] is the most important factor.”
|Technology must ensure that on-site maintainance of far offshore wind farms is kept to a minimum
The EMR White Paper started its passage through parliament in 2010 and is expected to become law by 2013. It is designed to stimulate low-carbon growth via four key elements: a carbon price floor; new long term contracts to kick-start investment; an emissions performance standard and a capacity mechanism.
But a certain amount of dithering by the government has resulted in some financiers getting jittery about the viability of the UK as a place to invest. Last month, however, it was announced that the EMR would be pushed through as legislation within the next year.
“As long as the appropriate market mechanisms are in place to promote the long term and sustained growth of offshore wind, developers like Vattenfall will be at the forefront of this movement,” says Baskerville. The flipside of which is clearly that if those market mechanisms are not in place in a certain country or region, then Vattenfall will take its business elsewhere.
Of course, once any wind farm ” be it near shore or in deeper waters ” gets the go-ahead and is built, it needs linking to the grid, and this is proving to be a sticking point in parts of Europe.
Baskerville says there are a number of issues to consider when connecting far offshore turbines to the grid. “In particular, the cost associated with developing the appropriate HVDC infrastructure to facilitate these kinds of projects is great.
“The other considerations include onshore and offshore environmental impacts, development, construction, and O&M requirements and costs and the capacity of existing grid infrastructure to accommodate such developments.”
Baskerville singles out Germany as an area of concern: “Delays o DC grid connections and the limited resources of the respective grid operator are the major challenges that need to be overcome.”
Last November, transmission system operator TenneT told the German government that it could not continue with the country’s programme to connect offshore wind farms to the grid. The company said it had reached saturation point of “human, material and financial resources”.
TenneT warned the German Federal Chancellery, the Federal Ministry of Economics and the Federal Environment Ministry that “the construction of connecting cables for offshore wind farms in the North Sea is no longer advisable and possible under current conditions and in the current speed”.
AREVA’s Huby says finding the right rules and regulation “is a high responsibility, especially for the industry”.
On grid connection and storage solutions, Huby says regulations are “in the hands of each government ” it is for them to overcome these offshore challenges to reach the different energy goals of each European country. There are still many missing offshore standards and a lot of open questions.
He says there is currently a scarcity of export cables, and this is expected to last at least until 2015. “Some wind farms will wait to produce electricity and this will represent a loss for operators and the banks [which have] already financed these projects.
“The grid issue is a topic that cannot be solved by the industry. Governmental steps are required to overcome this risk of losing time and investment. If this happens, it means more difficulties to find investors for the next offshore projects.Sometimes a foreign grid may be closer to the shore than the country’s wind farm. Intelligent grid solutions, a so-called Smart Grid, will be supportive for the integration of offshore wind energy.
“Reaching a critical capacity of wind farms to be linked to an offshore-to-shore network requires coordination of the TSO work and the wind farm’s construction.”
But Huby is upbeat about the future: “The offshore industry is booming, and if grid questions can be answered and logistic solutions developed, there is a bright future for this young industry.
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