Waiting to be Tapped

Floating offshore wind set to become mainstream in the global energy market

The floating offshore wind (FOW) segment holds the key to an inexhaustible wind resource waiting to be tapped across the globe. In Europe alone, about 80 per cent of the entire offshore wind resource is located in waters more than 60 metres deep, where traditional bottom fixed offshore wind (BFOW) is not economically attractive. Therefore, under the right conditions, and with an appropriate policy framework, FOW can significantly drive the global energy market transition.

There are currently four substructure designs for FOW: barge, semi-submersible, spar buoy and tension leg platform. The first three are loosely moored to the seabed, allowing for easier installation, while the tension leg platform is firmly connected to the seabed. This allows for a more stable structure. While FOW technology was earlier confined to research and development (R&D), it has developed to such an extent that it is now moving into mainstream power supply.

Benefits and potential

The wind blows stronger and its flow is more consistent at farther distances from the shore. By using FOW, developers can make use of larger areas avoiding wake effects from nearby wind turbines or other wind farms. Also, larger wind turbines (12-15 MW) that will be developed in the near future can be installed on FOW substructures. A combination of larger wind turbines producing energy for a long lifetime and large projects could make FOW economics as attractive as BFOW. FOW projects can also have an environmental impact when used in far-from-shore projects, as the noise and visual pollution will be less of a concern in deep, remote offshore marine areas. Europe has an exceptionally high potential for FOW. At 4,000 GW, it is significantly more than the combined resource potential of the US and Japan. FOW will allow countries like Norway, Portugal and Spain (where the potential for BFOW is very limited) to enter the offshore wind industry.

Barriers and solutions

Despite the immense potential of FOW, there has not been a single utility-scale project commissioned yet. Technology is no longer a barrier, but there are other challenges to overcome if FOW is to move quickly into mainstream power supply. Two major challenges are access to investments and political commitment, which are both interlinked.

As the industry is still at its early stages, it needs investor commitment to facilitate the transition to mainstream. Projects require significant investments and their bankability could be eased through financial instruments that address long-term uncertainty, such as guarantees and other hedging instruments. Governments could play a key role by bridging public and private funding to offer such financial instruments. FOW also needs sustained investments in research and innovation to accelerate cost reduction, particularly in those technologies facilitating commercialisation.

Generating optimal solutions requires investments in technology. This is likely to be carried out mainly by the industry. However, if there are no incentives to develop new technologies, companies are less likely to shift R&D efforts away from their existing products. Therefore, in order to facilitate this industrial development, governments around the world should acknowledge the potential of FOW and aim to integrate the technology into their planning of energy infrastructure. Broad political commitment would add to the financial security of projects, and industry and investors will thus be more willing to increase their development commitments and investments.

Need for FOW

While FOW is a new sub-industry in wind power generation, it has strong technological ties to BFOW. FOW will be able to benefit from the existing offshore wind technologies, while adding value to further development of the overall industry. FOW complements the BFOW industry by adding more capacity to the supply chain and by introducing new technology and developers. This will not only improve the existing conditions of the industry, but will also speed up technological development, as more overlapping research will be carried out on turbines, cabling, electrical interconnections, and operations and maintenance. FOW will also allow the industry to explore new regions, thereby widening the market and adding to the investment and volumes needed to meet cost-reduction goals. This will additionally enhance economic conditions in certain regions and generate trickle-down effects in related supporting sectors. In the same way that BFOW followed the progress from onshore wind and allowed an increase in wind power capacity, FOW has the potential to further increase offshore wind power capacity. Indeed, deeper offshore areas represent 60-80 per cent of the offshore wind potential in Europe. FOW can also be an alternative solution to BFOW, as it can be easily installed in areas with poor seabed conditions and would also allow potential recycling of the currently abandoned sites.

This is exemplified by a project in the UK, where The Crown Estate has leased out 47 GW of the seabed. It has been observed that around 12 GW of that space has been cancelled. Part of this area could potentially form a floating pipeline.

Cost economics

In recent years, the industry has witnessed a significant cost reduction in both the onshore and BFOW segments. It is anticipated that FOW would follow a similar downward trajectory. FOW costs are expected to decrease by 38 per cent by 2050, while experts from the International Energy Agency suggest that there can be up to 50 per cent cost reduction by 2050. There are several other factors that may also lead to further cost reduction. One of the key advantages of FOW is that turbines will be located in areas with much higher average wind speeds, giving turbines the ability to harness the best possible wind resources without depth constraints. The capacity factor can thus be improved and this will lead to an increased generation of electricity. With higher capacity factors, the levellised cost of energy (LCoE) will, therefore, be reduced.

The significant increase in turbine sizes is another factor. Larger turbines are a good fit for FOW as they can withstand high wind speeds and generate higher output per turbine. Introducing floating offshore turbines will also reduce both costs and risks currently associated with traditional BFOW construction, installation, operation and decommissioning. As turbines are located on floating structures, there will be fewer operations taking place below the sea level, and installations and continuous maintenance of foundations will thus be less risky to conduct. In addition, most of the decommissioning activities will be carried out onshore, reducing costs, risks and environmental impacts. Last but not the least, FOW will be able to benefit from economies of scale from the existing and well-developed BFOW segment. Several elements of the turbine design, structures and construction will overlap with BFOW. Thus, both segments will equally benefit from further development in this space.

Conclusion

FOW is no longer a faraway technology confined to R&D. The technology has developed significantly in recent years and is now ready to be integrated into the energy market. Further, it is expected that costs will fall significantly in the years to come, benefiting from and following the downward trend already being witnessed in onshore and BFOW. With the technology now reaching a level suitable for commercialisation, the industry is committed to developing further with the right policy conditions. Europe is currently the global leader in BFOW and it is natural that it will be a leader in FOW too.

However, this can only be realised if floating offshore wind receives a stronger commitment from policymakers throughout Europe. Developing a positive policy environment around floating offshore wind will improve the outlook of this technology and will attract private investments needed for the industry to succeed in its commercial deployment.

By Sarthak Takyar

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