EU 'Can Build 450GW Offshore by 2050'

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EU ‘can build 450GW offshore by 2050’ Ørsted plans ‘world first’ 5GW DARIUS SNIECKUS A fishing vessel sails past an offshore wind ffshore wind power could offshore wind farm carry Europe to carbon- energy island Oneutrality by mid-century, expanding to an installed base of ANDREW LEE 450GW and meeting 30% of the continent’s power demand — but Ørsted has unveiled plans for a to do so at lowest cost needs a 5GW offshore wind hub connecting “visionary” rethink of marine spatial Denmark, Poland, Sweden and planning, says a landmark report Germany, supporting large-scale published today by WindEurope. production of green hydrogen and The study, Our Energy, Our Future, creating what it called “the world’s shows that 85% of this capacity — first energy island” on Bornholm in around 380GW — could be built in the Baltic Sea. the North, Irish and Baltic Seas, with The global offshore wind leader the remaining 70GW generated in wants to kick-start the massive Southern European waters. cluster with a 1GW wind farm in “The EU says Europe needs at least the Rønne Banke zone southwest of ten times as much offshore wind 2040s,” stated WindEurope chief we get the maritime spatial planning Bornholm, one of the areas already as we have today to meet the 2050 executive Giles Dickson. right.” earmarked by Denmark for possible CONTINUED on Page 3

Cultura/Getty goal of decarbonising energy. The “The report shows that it is doable Marine usage rights will be “crucial” IEA [International Energy Agency] and affordable. But three things need to the industry’s rapid development, believes offshore wind could become to happen: one, the offshore wind the report found, as shipping, fisheries VISIT RECHARGE the number-one source of power supply chain keeps growing; two, we and military activity currently rule out at Stand E-D20 Photograph | Photograph generation in Europe in the early build the grid connections; and three, CONTINUED on Page 3

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www.siemensgamesa.com SGRE digitally upscales turbine to 11MW ‘Rethink exclusion zones’ DARIUS SNIECKUS Morten Pilgaard Rasmussen to hit 450GW iemens Gamesa Renewable Energy (SGRE) has offshore by 2050 Sunveiled a digitally souped-up version of its recently CONTINUED from Page 1 launched 10MW SG10.0-193DD 60% of Europe’s northern seas to turbine, a 11MW model that uses offshore wind. the OEM’s ‘DD Flex’ technology Without these “exclusion suite to squeeze another 6-7% zones”, the region’s full potential annual energy production (AEP) of wind resource offshore could out of the ultra-large nameplate be developed at a much lower machine. overall levelised cost of energy The higher-rated unit, SG11.0- (LCOE), says the report, which was 193DD Flex, upscaled using ‘digital commissioned by WindEurope and twin’ modelling of forerunning written by UK-based renewables SGRE concepts, will employ consultant BVG Associates. intelligent control systems to tailor Opening these zones to offshore everything from rotor-yaw and before we engineered the 10MW.” out there [at sea], not just what is wind could lead to 248GW being blade-pitch to “using the whole The 11MW, like the 10MW, will written in an IEC [International built in the North Sea for less than turbine structure more efficiently” fly new-look carbon-reinforced Electrotechnical Commission] €50/MWh by 2050, with a further to run the turbine “closer to its 94-metre B94 blades powering a standard somewhere,” said 130MW at €50-65/MWh and 2GW limits”, SGRE chief technology direct-drive transmission system Rasmussen. “That gives a much for €65-80. However, if the zones officer Morten Pilgaard Rasmussen with beefed-up permanent magnet better understanding of how well remain in place, these figures fall to told Recharge. generator. The 10MW prototype we are utilising the technology by 112GW below €50/MWh; 264GW “This is a case of getting an extra is about to be erected in Osterild, better predicting loads today and at €50-65; and 4GW at €65-80. 10% [bigger nameplate] for minor Denmark, to begin a programme into the future, over a machine’s “With the current exclusion improvements that we could see of final tests before starting serial lifetime, in a safe way.” zones, almost three quarters of in our scoping out of this product, production. Rasmussen noted that the the future capacity cannot be built using readily available technologies “Using digital twins allows us to bringing the 11MW to market at a ‘very low’ LCOE,” said BVG for new model ‘in the making’. collect a huge amount of data form “doesn’t change our ambitions to Associates managing consultant “Some of the digital technologies our existing offshore fleet and feed move toward substantially higher Kate Freeman. “This report should that have made ‘Flex’ possible back design improvements that are ratings out int the mid-2020s”. be a wake-up call for policymakers have been in the works since a response to the actual conditions 10MW TURBINE: Page 6 and marine planners: the cheapest and most space-efficient way to build the 450GW is through the multiple use of the same maritime Energy island will connect Denmark and Poland space by different sectors.” Dickson added: “On maritime CONTINUED from Page 1 spatial planning, we need a future development. long-term approach with climate On Monday, Ørsted urged the priorities at its heart. And more Danish government to hold a multiple use, for example, allowing tender for developing Rønne Banke fishing in offshore wind farms.” as the next stage of its offshore The rate of build-out of offshore wind expansion programme, after wind needed to reach the 2050 the awarding of the Thor project, target would, in any scenario, tendering for which is currently require a “wartime campaign”, under way. Freeman said. Accelerating from Ørsted said such a tender, the annual 3GW being installed in conjunction with new now to over 20GW per year from interconnectors between Denmark for the Bornholm vision, but said needed to electrify transport and 2030 would need an ever-larger and Poland — as previously it could help Denmark meet 2030 heating in Denmark and the other supply chain and a capital spending proposed by Danish grid operator emissions goals. nations it serves, said Ørsted, rise from €6bn in 2020 to €45bn Energinet — would shift the Martin Neubert, chief executive citing EU estimates that 450GW of per year by 2030. agenda for offshore wind to one of Ørsted Offshore, said: “Offshore capacity will be needed. There will also need to be heavy based around clusters serving wind clusters with transmission Integrating the cluster with investment in grids to support multiple countries. to several countries are a necessity green hydrogen production would Europe’s offshore wind expansion The initial 1GW could later if we’re to realise offshore wind’s bring a further dimension by — by BVG Associates’ calculations be expanded to 3-5GW, with enormous potential in making supplying clean fuel to help green climbing from €2bn next year to interconnection extended to Europe green.” hard-to-decarbonise sectors such €8bn annually by 2030, requiring Sweden and Germany, said Ørsted, The Bornholm cluster would help as heavy transport and aviation, it EU-wide co-operation and the

Photograph | SGRE Photograph which offered no specific timeline produce the vast levels of power added. development of meshed grids.

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WindFloat Atlantic MHI Vestas is towed out for its flagship deployment off set for Japan’s Portugal first large-scale offshore project

ANDREW LEE

MHI Vestas has confirmed it will supply its top-of-the-range V174-9.5MW turbines for the 220MW Hibikinada project being developed off Kitakyushu city, southwest Japan, by a consortium led by J-Power and regional utility Kyuden Mirai. Hibikinada is due for construction and operation as early as 2022, and is the first project to advance under Japanese Floating wind joins 10MW turbine reforms of regulations governing offshore wind operation off the country’s ports. era with MHI Vestas’ French win Kitakyushu municipal authorities in 2017 selected a consortium ANDREW LEE project, which is planned for also due to be commissioned at including utilities J-Power and deployment in 2022. the EDPR-led WindFloat Atlantic Kyuden Mirai to develop the near- loating wind joined the The Gulf of Lion project, also project off Portugal later this year. shore project. J-Power has said 10MW-turbine era in known as Leucate and led by WindEurope says 350MW of that Hibikinada will be “the first Fanother milestone for the European power giants Engie and floating capacity will be switched commercial scale offshore wind fast-emerging sector, as MHI EDPR, is one of four sanctioned on in Europe by 2021, led by a power project in Japan”. Vestas was named preferred by the French government off its raft of projects off the UK, France, Selection for Hibikinada — supplier to a key pilot project off coasts as it seeks to establish a Portugal and Norway. slated to be in operation as early France. leading position in floating wind. Analyst estimates for the as 2022 — is a breakthrough for Three of the OEM’s V164- The deal comes after MHI Vestas deployment of floating wind by the Danish-Japanese OEM in 10.0MW machines — mated to was named preferred supplier to 2030 ranges from as little as 6GW Japan, home of Mitsubishi Heavy semi-submersible WindFloat another of the four, the Groix & up to almost 19GW, all influenced Industries, one of the two joint platforms from floating pioneer Belle-Ile project, which will use by how quickly the sector can venture partners in the offshore Principle Power — are lined up the 9.5MW version of the V164. become cost-competitive with turbine maker, alongside Vestas. to equip the 30MW Gulf of Lion Three 8.3MW V164 models are bottom-fixed offshore wind. J-Power and MHI Vestas have an existing relationship via the former’s investment in the Triton Knoll project, one of the largest wind farms under construction Trump offshore wind fight ends in $290,000 payout off the UK, which will use the OEM’s 9.5MW turbines. ANDREW LEE playing at the luxury resort, near MHI Vestas rival Siemens Aberdeen, but finally lost its legal Gamesa stated in June that it had Donald Trump’s business empire battle in late 2015. won the first large-scale deal for has agreed a £225,000 ($290,000) Trump’s business empire a major Japanese offshore wind settlement to cover the Scottish heavily delayed the project as it project, with a preferred supplier government’s legal costs after the challenged consent for the project nod for a 455MW project due to US president’s long, unsuccessful right through the Scottish legal enter service in 2024. court battle to stop an offshore system and up to the UK Supreme Early this year, Japan’s parliament

wind project in the North Sea. Court. passed long-awaited legislation Photography | Foto: Dock90 The agreement marks a full The EOWDC finally opened clearing the way for long-term stop to the saga of Trump’s in summer 2018, with Scottish offshore wind development in fight against the Vattenfall- First Minister Nicola Sturgeon the island nation, which is seen led European Offshore Wind formally inaugurating the project as among the next wave of key Deployment Centre (EOWDC). in September — and saying the growth markets for both fixed- Trump International Golf Links project showed Scotland was “in bottom and floating wind power. claimed the 11-turbine project the mainstream” over fighting The government is set to hold would ruin the views of golfers climate change. national tenders next year.

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SGRE plans 600 white-collar job cuts amid ‘tough market

ANDREW LEE

Siemens Gamesa Renewable Energy (SGRE) unveiled plans to cut 600 further jobs to protect profitability in a “tough market”, but said it is well placed to benefit from the sector’s strong long-term outlook after record commercial activity last year. SGRE said the staff reductions, affecting white collar workers, will help it stay competitive SGRE’s first 10MW following a “transitional year” in offshore wind 2020 for the industry, which is turbine nacelle still experiencing the impact of “adverse factors” such as ongoing price pressures, rising costs and regulatory uncertainty in some key markets. Siemens Gamesa’s first 10MW The job reductions will be spread across a number of offshore wind turbine unveiled markets, including Germany, Spain, Denmark, the US and UK. The manufacturer had DARIUS SNIECKUS The prototype of the machine, In April, Vattenfall revealed previously announced 600 job which Siemens Gamesa chief plans to install a first batch of the losses in Denmark in September, urbine maker Siemens executive Markus Tacke said 10MW turbines at its Hollandse as it discontinued some legacy Gamesa has completed would “bridge market demand” Kust South 1 & 2 project in the turbine production. Tthe prototype nacelle for until the OEM’s the as-yet- Dutch North Sea — in line to The latest announcement came its 10MW offshore model, the unnameplated “1X” platform, is be the world’s first zero-subsidy as Siemens Gamesa unveiled full- SG10.0-193DD, at its factory in available in 2024-25 — will be offshore wind farm — following year financial results for the 12 Brande, Denmark. erected at a test site in Østerild, the signing of a preferred supplier months ending in September and The direct-drive design, first Denmark, with trials to “begin agreement with the OEM. expectations for the current year. revealed in Recharge in January, shortly”. Siemens Gamesa main rival, Offshore order intake was up is a sizeable step up from the The nacelles for the SG10.0- MHI Vestas, also has a 10MW 11%, largely due to Taiwan, which OEM’s 8MW model, with longer 193DD will initially be model in the works, while GE has delivered 1.5GW, with onshore 94-metre blades sweeping an manufactured at Siemens a 12MW prototype that has begun order intake up 5% to 9.4GW. area of 29,300 square metres to Gamesa’s factory in Cuxhaven, to generate power (see opposite The company ended its financial generate 30% more annual energy Germany. Commercial market page). year with a record order book production than its forerunner. deployment is slated for 2022. 11MW UPGRADE: Page 3 of €25.5bn ($28.25) and net profit doubling to €140m.

SGRE SGRE wins deal for 300MW Hai Long 2 off Taiwan boss Markus Tacke DARIUS SNIECKUS offshore wind farm’s development The Taichung facility — which partners, Canada’s Northland will be used for offshore nacelle Siemens Gamesa Renewable Power and Taiwan’s Yushan assembly, testing, warehousing, Energy (SGRE) has landed a Energy, could see construction office buildings and outdoor preferred supplier agreement begin as early as 2023. storage — is expected to be to supply turbines for Taiwan’s Andreas Nauen, SGRE’s offshore operational in 2021, and will Photography | SGRE 300MW Hai Long 2 offshore chief executive, said the order help developers meet the nation’s project, pressing the button on “represented a stepping stone growing local-content stipulations. plans to build a nacelle assembly for our long-term presence in The deal for the project, 50km facility at the port of Taichung. the region and will enable the off the coast of Changhua County, The deal, which is subject to the expansion of our own local brings SGRE’s order book to close final investment decision of the footprint”. to 2GW off Taiwan.

6 rechargenews.com GE Renewable Energy’s 12MW First power flows Haliade-X prototype in the from world’s biggest port of Rotterdam offshore wind turbine

DARIUS SNIECKUS “There are more than 500 GE women and men behind this great E Renewable Energy’s success, who have been working 12MW Haliade-X for a year and a half to make this Gprototype, the biggest possible.” wind turbine ever built, has The Haliade-X, the launch generated first power, moving the of which in March 2018 was giant machine into the testing reported exclusively in Recharge, phase at its site in the Dutch port is engineered to generate up to of Rotterdam. 67GWh of gross annual energy Siemens Gamesa, though both the Massachusetts Clean Energy Production of the first kWh from production, enough to supply have larger-nameplate designs in Centre in Boston. the prototype, which is on track power to over 16,000 European development. GE is racing to get the Haliade-X for crucial “type certification” to households and save up to 42,000 The Rotterdam unit’s into serial production, with orders anoint it market-ready next year, metric tonnes of CO2. performance will be quality- for the Equinor-SSE 3.6GW was called a “critical achievement” The turbine, which flies an LM checked against a second 12MW Dogger Bank mega-project off for the technology and its project Wind Power-designed 220-metre- nacelle that is being life-cycle the UK and Ørsted’s Skipjack and team by GE’s offshore wind chief diameter rotor powering a tested at the Offshore Renewable Ocean Wind developments in executive John Lavelle. direct-drive transmission with Energy Catapult in the UK, where the US in line for first deliveries “This [milestone] brings to permanent-magnet generator, one of the 107-metre-long blades between 2022-25. The turbines will fruition our vision and all the hard overtakes the 10MW models is already being trialled. A second be built at GE’s Saint-Nazaire and

GE Renewable Energy | GE Renewable Photograph work put in place,” he said. of rival OEMs MHI Vestas and blade has arrived for testing at Cherbourg factories in France. Our energy, our future

HIGHLIGHTS OF THE DAY TUESDAY, 26 NOVEMBER #offshore2019 HIGHLIGHTS OF THE DAY TUESDAY, 26 NOVEMBER #offshore2019 → Individual session ti ckets are available at the registrati on desk! Social events → Ministerial session and Oﬃ cial inaugurati on are open to all registered parti cipants! BlueInvest Workshop 10:30 – 17:30

Meeting room 20, level 1 Opening Reception Programme overview Targeted coaching to accelerate your 18:00 – 20:00 business, pitch training and one-to-one business meeti ngs with potenti al partners, Iberdrola stand C4-B14 enablers and investors. Enjoy Spanish-themed ﬁ nger-food, inspired by our sponsor, Iberdrola, along with good music, great company, and a few beers! PROMOTioN Regulati on & Financing of a European oﬀ shore grid1

14:00 – 17:00

Meeting room 18, level 1 Tackling the regulatory and ﬁ nancial hurdles Side events and the deployment plan for a meshed oﬀ shore grid up to 2050.

Offshore wind farm visits Future of Offshore 12:15 – 16:00 Wind in Poland

Departure from Bella Center, Press brieﬁ ng Reception Desk 15:30 - 17:30 Please note the bus will depart from Bella WindEurope Stand E-D21 Center at 12:15, and the boat departs at 13:00. Join us for this press announcement from the Polish Wind Energy Associati on.

Exhibition halls (HALL E)

Global Markets Brought to you by Innovation Powered by Safety, Skills & In association with See the programme online: Theatre Park Training Zone

windeurope.org/programme 11:00 – 17:30 10:00 – 18:00 10:45 – 16:15

What’s happening in the key global The Innovation Park is where you’ll find A unique 200m² area showcasing the markets for offshore wind? Our the start-ups and innovative projects industry’s commitment to an injury-free Visit the WindEurope Stand E-D21 to meet the WindEurope team, pick up expert presenters will tell you transforming how wind works. working environment in offshore wind. your copy of our industry-leading reports, try out our market intelligence everything you need to know. tools and book your stand for WindEurope Electric City 2021. 8 rechargenews.com windeurope.org/globalmarkets windeurope.org/innovati onpark windeurope.org/trainingzone Our energy, our future

14:00 – 17:00

Meeting room 18, level 1 Tackling the regulatory and ﬁ nancial hurdles Side events and the deployment plan for a meshed oﬀ shore grid up to 2050.

Offshore wind farm visits Future of Offshore 12:15 – 16:00 Wind in Poland

Exhibition halls (HALL E)

Global Markets Brought to you by Innovation Powered by Safety, Skills & In association with See the programme online: Theatre Park Training Zone windeurope.org/programme 11:00 – 17:30 10:00 – 18:00 10:45 – 16:15

What’s happening in the key global The Innovation Park is where you’ll find A unique 200m² area showcasing the markets for offshore wind? Our the start-ups and innovative projects industry’s commitment to an injury-free Visit the WindEurope Stand E-D21 to meet the WindEurope team, pick up expert presenters will tell you transforming how wind works. working environment in offshore wind. your copy of our industry-leading reports, try out our market intelligence everything you need to know. tools and book your stand for WindEurope Electric City 2021. windeurope.org/globalmarkets windeurope.org/innovati onpark windeurope.org/trainingzonerechargenews.com 9 RECHARGE | OFFICIAL EVENT DAILY

British Prime Poland’s draft Minister Boris Johnson delivering a speech during offshore wind his Conservative Party general bill ready as big election campaign players hover

ANDREW LEE

Poland’s government unveiled a long-awaited bill to underpin offshore wind development off its coast, as sector giants Ørsted and RWE lay plans for possible projects in its waters. The Polish energy minister Krzysztof Tchórzewski said the draft bill, which he hopes will go forward “within weeks” for consultation and further legislative examination, “will significantly contribute to the future creation of a systemically formed offshore wind energy sector in Poland”. The bill has been eagerly awaited by the fledgling sector in Poland Johnson: I’ll raise UK offshore and beyond, which hopes it will frame a support scheme for Baltic Sea wind development and the wind target to 40GW by 2030 offshore grid connections needed. Polish offshore wind has ANDREW LEE of new capacity in September. to working with whichever party received two big boosts in the The CEO of SSE, one of the big forms the next government to last few months as global sector he UK will increase winners in the CfD round, has implement the actions we need heavyweights laid down markers its 2030 offshore wind called for an increase in the target to deliver an increased target for for activity there. Ttarget to 40GW from the to help the UK achieve its 2050 offshore wind.” First Ørsted said it will enter current 30GW if the governing net-zero emissions goals. Tom Harries, offshore wind talks to buy half of the 2.5GW Conservative Party wins the Johnson’s announcement senior associate analyst at Elektrownia Wiatrowa Baltica upcoming general election, said was welcomed by the UK’s Bloomberg New Energy Finance, 2 & 3 arrays from state-owned Prime Minister Boris Johnson. government-industry group the told Recharge reaching these utility Polska Grupa Energetyczna Johnson’s reference to offshore Offshore Wind Industry Council higher targets will be “tricky”. (PGE) that are among the furthest wind came amid a raft of industrial (OWIC). “Getting to 40GW by 2030 developed in Poland. policy announcements as the OWIC co-chair Benj Sykes, who’s requires nearly all of the existing Soon after, RWE acquired a Conservative leader attempts to also UK manager for offshore wind pipeline to secure contracts via a pipeline totaling some 1.5GW secure a majority in the timely CfD schedule in potential, and said it plans to 12 December poll. but at present there accelerate their development. The main opposition Getting to 40GW by 2030 is no transparency According to a draft for its Labour Party has already on the timing of long-term energy planning , the pledged to embark on a requires nearly all of the existing future CfD rounds,” government counts on offshore massive offshore wind he said. “And prices power to feed into the Polish grid build-out that would see pipeline to secure contracts could rebound if in 2025, and foresees 10.3GW of 52GW in the water by there is insufficient Polish capacity built by 2040. 2030, also well ahead of the 30GW giant Ørsted, said: “We welcome competition in future rounds, envisaged under the ‘sector deal’ this commitment to expand jeopardising the success of future Photography | AFP/Getty | Wikimedia signed between the government offshore wind in the UK, as it will auctions. and the industry earlier this year. boost our ability to reach net- “The new UK Crown Estate lease The UK is currently the world’s zero emissions at low cost using round will boost the pipeline but biggest market for offshore wind, a technology which can deliver at developing, permitting, financing with 8.4GW in service, the world’s scale. and commissioning any of that largest operating project in the “The announcement contains a capacity before 2030 will be 1.2GW Hornsea 1, and a contract- key commitment to taking cross- tight. The same for Crown Estate for-difference (CfD) support government actions to enable us to Scotland leases with the added Krzysztof Tchórzewski mechanism that has driven prices reach 40GW by 2030.” uncertainty of any dedicated down rapidly and awarded 5.5GW Sykes added: “We look forward funding for floating projects.”

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DARIUS SNIECKUS The Bold Tern installation ffshore wind power vessel during construction of the will mushroom to Wikinger project Obecome a main engine in the German of the transition towards a Baltic Sea decarbonised global energy system in the coming decades, with the worldwide fleet expanding 15-fold to reach at least 340GW by 2040, according to a report by the International Energy Agency (IEA). The IEA’s Offshore Wind Outlook 2019 — which dovetailed industry data with a specially commissioned geospatial analysis that maps out wind speeds along hundreds of thousands of kilometres of coastline around the world — calculates that the resource could in the next 20 years become a “mainstay of the world’s power supply” while spurring investment of more than $1trn. “We will need a host of low carbon technologies... to meet our global climate and environmental challenges... and although offshore wind [currently] provides only 0.3% of our electricity supply we are witnessing auctions with strike prices falling very steeply and showing offshore wind to be competitive already with certain fossil fuels and [offshore wind] technologies are IEA: Offshore wind to explode advancing very rapidly,” said the IEA’s chief energy modeler, Laura Cozzi. “Offshore wind has huge into $1trn global market by 2040 untapped potential — it is just mind-blowing.” The IEA analysis found that out by mid-century. projects that the worldwide of further “sharp” reductions offshore wind has a technical The US, meanwhile, is forecast offshore wind market will taking the global levelised cost power production potential to be in line for “substantial expand by 13% a year, by 2030 of energy another 40% lower by of 36,000TWh a year for growth” by 2040, with its fleet witnessing more than 20GW of 2030 “to between €30-40/MWh”, Photography | Fred Olsen Windcarrier | Marvel Entertainment | FloatMast installations in water depths of swelling to around 40GW, while additions annually — though it and nearly 60% by 2040. less than 60 metres within 60km Korea, India and Japan would all notes that for global climate and “This is related to the falling from shore, while current global see tens of gigawatts of offshore sustainability goals to be met, the cost of [turbine] foundations, the electricity demand stands at wind turbines installed. higher performance 23,000TWh. By moving farther “In general, this goes of the turbines, as from shore and into deeper waters from a market that has well as from efforts with floating technology, enough been concentrated in the This spectacular growth on the operations and potential could be unlocked to European Union to one could... potentially [have] an maintenance side. We meet the world’s total electricity that is truly worldwide are seeing the industry demand 11 times over by 2040. — all feeding in to [lead important role in the really maturing here,” Europe, the current market to] a 15-fold increase [in said Wanner. “Capacity pace-setter with 20GW installed, installed offshore wind production of green hydrogen factors [for offshore is forecast to continue to lead power],” said IEA head of wind farms] are the global pack for the next two power generation analysis climbing from 43% in decades, with expectations of Brent Wanner. “The market build-out would need to be “much 2018 toward over 50% in the years 130GW or more turning offshore opportunity is very large here. faster”, around double that rate. to come. by this date — though China by And there is even greater, longer- The report highlights the success “This puts [offshore wind] this point is foreseen having at term potential.” offshore wind has had in cutting on par with some dispatchable least 110GW on line and being on Based on current investment costs from over €200/MWh to technology such as gas-fired track to outpace Europe’s build- plans and policies, the IEA report below €60/MWh and the prospect generation — the world average

12 rechargenews.com for which is around 50%,” said Thor — the Wanner, noting offshore wind’s Marvel comic capacity factors are already “three book character portrayed on the times as much as solar PV and silver screen by significantly more than onshore Chris Hemsworth — not the offshore w i n d ”. wind farm of the The report also spotlights that same name offshore wind’s high capacity factors and tumbling costs “make it a good match” to produce green hydrogen, which could be used help decarbonise various heavy- emitting industrial sectors such as steel and shipping, as well as in heating and transport. “This spectacular growth could have impacts beyond the electricity sector,” said Cozzi. “We see it having potentially another important role in the production of green hydrogen. By 2030, we foresee offshore wind being able to supply hydrogen at a cost of $20/ Mbtu [million British thermal units, the traditional unit measure of heat] — comparable to hydrogen being produced by other sources. including natural gas, today.” The report authors caution Denmark turns to UK-style CfD that governments and regulators need to “clear the path ahead” for offshore wind’s development “by for 1GW Thor offshore wind providing the long-term vision that will encourage industry and ANDREW LEE plan, agreed last year by politicians compete on the basis of so-called investors to undertake the major from across the spectrum. “strike prices”, with the Danish investments required” to build enmark will back its Thor, up to 20km offshore in the government topping up the and link projects on land-based largest offshore wind North Sea, has to be fully on line wholesale power price to that power grids. Dfarm — the up-to-1GW by 2027 and will be Denmark’s figure — or the developer paying This, said Wanner, will call Thor development — with a largest, surpassing the 600MW Copenhagen the surplus when for “careful market design” to UK-style contract-for-difference Kriegers Flak that is due in service the power price is higher than the ensure low-cost financing and (CfD), the country’s first use of in 2021 and the 407MW Horns strike price — over the course of regulations that take into account the mechanism in its build-out Rev 3, which began operating this the 20-year contract. that the development of onshore programme. year. CfDs, and the stability they offer grid infrastructure is “essential” Thor, which will be a minimum The adoption of the CfD is developers and investors, have to the integration offshore wind of 800MW, will be the first of revealed in draft documents been widely hailed as a key factor power production. three large offshore wind projects released by the Danish Energy in the huge interest in developing “Industry needs to continue planned by Denmark by 2030 Agency (DEA). in the UK market, and in helping the rapid development of the under its national energy transition Under a CfD system, bidders to drive down prices there. technology so that wind turbines keep growing in size and power capacity, which in turn delivers the major performance and cost Med’s first floating met-mast ends trial off Greece reductions that enables offshore DARIUS SNIECKUS wind to become more competitive The FloatMast in traffic, and recording a maximum with gas-fired power and onshore the Aegean Sea wind speed of 27.6 metres per w i n d .” The Mediterranean’s first second. “The growth of offshore wind floating meteorological mast has Because of its diesel-dependent into a trillion-dollar industry in completed a four-month trial in island populations and deep the coming decades cannot be the Aegean Sea off Greece. water, Greece has emerged as a taken for granted,” said Cozzi. FloatMast’s eponymous tension- potential key market for floating The International Renewable leg-platform prototype was wind developers, with Norwegian Energy Agency recently doubled installed in 65 metres of water energy giant Equinor recently its 2050 forecasts for offshore off the island of Makronisos, confirming that deployment of wind, saying it now expects more collecting 120 data streams, moored arrays in the Aegean had than 1,000GW to be installed by including wind and wave been discussed at government mid-century. measurements, weather and ship level by Norway and Greece.

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CHRISTOPHER HOPSON

he downward trajectory of prices in UK contract-for- Tdifference (CfD) rounds will put increasing pressure on UK offshore developers, as Britain’s world- leading sector evolves to embrace a variety of scenarios such as merchant and corporate power wind market sales, industry experts tell Recharge. In the third CfD auction in thinks September, in which 5.47GW of offshore wind projects were awarded, strike prices fell as low as £39.65 ($51.40) per MWh. beyond CfDs Alun Roberts, associate director at renewables consultant BVG Associates, told Recharge that as prices such strike prices showed the extraordinary progress the wind industry has made in reducing costs. tumble “These prices show that developers now see CfDs as a price stabilisation mechanism rather than a subsidy,” he said. “The question now is whether other developers which declined to bid so low prefer to accept merchant risk, probably also with corporate PPAs [power-purchase agreements] — a route the industry has been contemplating for some years.” According to the UK’s Renewable Energy Association, the winning prices are below the projected wholesale cost of electricity, meaning that the projects will effectively be “paying developer has to pay the surplus “If the CfD price gets too low down this route.” back” to consumers on each unit back to the government. If the then it looks less attractive because Sources indicated that several of electricity they produce. wholesale price is lower, the the generator can get more on developers are considering Under the CfD system, if government has to top it up so the open market,” said Roberts. accepting merchant risk, probably the wholesale power price is that the developer always receives “Potentially all the unsuccessful with corporate PPAs, including higher than the strike price, the the agreed strike price. projects from auctions could go Iberdrola, and SSE Renewables for their 1.1GW Seagreen mega- development off Scotland. The Rampion wind farm off Brighton, The current cost-reduction southern England trajectory is unsustainable,” said Bridget Beals, director, power & utilities at KPMG. “What I think is challenging is the degree to which margins have come out of development risk and the supply chain, while at the same time we are still trying to develop an industrial supply chain in the UK for offshore wind,” she told Recharge, adding that offshore wind players will increasingly look at alternative routes to market, such as PPAs. “Maybe due to technical

Wood Mackenzie | Wood | Getty BVGA | MHI Vestas Photography progress, such as bigger turbines,

14 rechargenews.com Norwegian oil company fare better in the next allocation An MHI Vestas Equinor and UK power producer round for which several of the turbine at the Walney Extension SSE dominated the third CfD English projects will be in deeper project in the UK auction, with three 1.2GW waters than Dogger Bank.” Irish Sea projects in their Dogger Bank SSE Renewables said Seagreen’s zone given awards, with the CfD provides a 15-year price remainder going to Innogy’s certainty at £41.61/MWh for 1.4GW Sofia project (also in the over 40% of the project “which Dogger Bank zone) and SSE’s we expect to support the projects 454MW Seagreen wind farm, off ability to secure financing for the the east coast of Scotland. full 1,075MW”. About 2.75GW of projects failed “Plans are in place to progress to get a deal. financing and an equity stake Offshore projects missing out sell-down to move towards a final included Iberdrola’s giant 1.2GW investment decision in 2020,” an East Anglia 3 (EA3) off England’s

east coast; EDPR/Engie’s 800MW- Shimeng plus Moray West in Scotland’s Yang outer Moray Firth and the Chinese-owned 700MW Inch Cape project in Scotland’s Firth of Forth. BVG said it was disappointing news for Scotland’s offshore wind sector that only 454MW of the 3.1GW sought were successful — likely due to the double whammy of deep water and higher grid charges north of the border. Also while four smaller remote island projects won CfDs, the 475MW SSE spokesperson told Recharge. Viking wind farm on Shetland It is understood that Iberdrola was left out in the cold. believes that corporate PPAs Following the awards, Scotland’s might be a route which will make energy minister Paul Wheelhouse it possible for projects such as called on the UK government to EA3 to be explored, or even built “urgently review the limitations of without the support of CfDs. the CfD auction system” as 5GW A spokesperson for Iberdrola out of the 6GW awarded in the unit ScottishPower declined to round went to two major offshore comment on future financing wind projects in England. options for EA3, but confirmed there will be some more project connections. “Basically it was an auction “we will look at how we can costs which can be squeezed out, “That said, there is not a one- based on the lowest price so further optimise the project”. but I don’t believe that will be size-fits-all regulatory mechanism Scotland can’t be grumpy,” “Whilst we are disappointed enduring,” said Beals. that serves all jurisdictions Roberts told Recharge. “Obviously not to have secured a contract for Brent Wanner, senior energy and offshore wind projects. you have a huge wind resources EA3 in this round, we still believe analyst at the International A combination of elements off Scotland and the political [it] is a great project which would Energy Agency, added: “The cost will make projects even more will, but if you have what are bring further benefits to the East competitive in the effectively deeper water projects Anglia region and the wider UK future, including with higher transmission charges economy,” the company added. These prices show that innovative project- it’s just a headache. It should Wood Mackenzie’s senior financing schemes research analyst, Shimeng Yang developers now see CfDs as a and improving Alun told Recharge that the upcoming technology. Roberts fourth round of CfD discussions price stabilisation mechanism “Manufacturers will now go beyond the budget rather than a subsidy have signalled [a allocation, focusing on capacity move] towards caps to ensure competitiveness, even larger turbines as well as the volumes needed to reductions seen in recent years — reaching 15-20MW in size — reach the UK’s 30GW offshore in the UK have not only come and digital solutions are expected wind target by 2030. from marginal reductions from to drive down O&M costs.” “Furthermore, the declining UK developers, but they were enabled Cost pressure is only likely to offshore wind strike prices will in many cases by technology increase on existing developers force developers to prepare for development and proper with the arrival of cash-rich oil & bids below current power prices regulatory guidance — especially gas supermajors such as Shell and or to follow a pure merchant when considering offshore BP in the offshore wind sector. route to market.”

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