The study finds that ongoing technology and industry advances combined with actions New York could take, independently or with other states, could lower costs for offshore wind power as much as 50%.

By Ritesh Gupta

Companies mentioned: New York State Energy Research & Development Authority, Dong Energy, ABB, EWEA, Alstom, Siemens

New US offshore wind report evaluates how to halve costs

A study, titled New York Offshore Wind Cost Reduction Study, initiated by New York State Energy Research and Development Authority (NYSERDA), has stressed that supporting offshore wind development at scale, rather than on a project-by-project basis, could have the greatest impact on reducing costs.

The study finds that ongoing technology and industry advances combined with actions New York could take, independently or with other states, could lower costs for offshore wind power as much as 50%.

Prepared by the University of Delaware’s Special Initiative on Offshore Wind (SIOW), identifies and compares the impact of three main areas of cost reduction: global cost reductions, cost reductions associated with increasing U.S. learning/ scale, and cost reductions associated with New York State interventions.

The team identified a project site off of the New York coastline that could be considered optimal for offshore wind energy production.

To evaluate the impact of global cost reductions in isolation, the team first calculated LCOE of offshore using a 5MW turbine for the study’s Base project and compared that to the calculated LCOE of offshore wind using an 8 MW turbine including the technological innovations and industry efficiencies anticipated to be pulled to market by 2020.

The team further analysed the impact of the continuous technological improvement anticipated from financial close 2020 to financial close 2023 on the LCOEs for subsequent projects in the Build-out scenario.

The study also indicates that as projects are installed and operated in the U.S, acquisition of new skills and knowledge in project development and operations are expected to lower project cost and ultimately LCOE.

To analyse the impact of this learning, the SIOW applied a learning rate of 5%, for every doubling of capacity installed over the study period. Using this rate of learning, the study team calculated LCOE’s for each project in the Build-out scenario (2.4 GW), assuming a parallel and additive market build out of 1.1 GW of OSW between the end of 2020 and the end of 2023.

Source: New York Offshore Wind Cost Reduction Study

The cost of offshore wind energy for New York State projects with financial close in 2020 and beyond is likely to be significantly reduced from baseline costs by assuming new turbines now being specified (8 MW) rather than continuing to assume the use of smaller turbines.

ABB bags order from Dong Energy

Dong Energy has allotted a contract worth $130m to power and automation technology group ABB.

ABB has been chosen to supply a high-voltage cable system that will bring power from the Walney Extension wind park off the northwest coast of England.

The Walney Extension will provide additional generation potential of 660 MW on top of the existing offshore wind farm’s 367 MW.

The existing Walney offshore wind farm is located 15km west of Walney Island off the coast of Cumbria in the Irish Sea, with its turbines covering an area of approximately 73 sq. km. The extension site where ABB is supplying the high-voltage cable system is northwest of the existing installation and will cover an area twice as large at 149 sq. km.

Source: ABB

2020 cost reduction make-or-break for offshore wind

The introduction of higher capacity turbines with better energy capture and reliability with lower operating costs, leading to as much as a 9% reduction in costs, would be a key to offshore wind energy gaining cost competitiveness by 2023.

A report, released by the European Wind Energy Association, has highlighted that the industry needs to take several such cost cutting steps in the next five years to become cost-competitive in terms of LCOE.

Among other measures, there is a need for a steady project pipeline allowing continuous production of support structures would cut up to 7%. Also, greater competition between industrial actors in several key supply chain areas, would lower costs by as much as 7%.

Responding to this, the industry has started rolling out larger 6-8 MW turbines. While there are immediate higher capital expenditure costs, the increased energy capture is reaching the economies of scale needed to lower the cost of energy.

The report by EY, titled Offshore Wind in Europe, has shared that with clear political signals from lawmakers on regulation and support schemes, offshore wind could compete with conventional forms of energy such as gas, coal and nuclear in the first half of the next decade.

The report also emphasised that by 2020, offshore wind will have an installed capacity of 20-plus gigawatts, and be within near completion of achieving €100/MWh. Failure to meet both of these criteria will not see the offshore wind industry advance into 2030 and beyond.

Dong Energy finalises plans for Siemens 7MW wind turbine

Dong Energy has finalised Siemens as preferred supplier for delivery of 7 MW wind turbine for the second phase of the Walney Extension Offshore Wind Farm.

The 7MW turbine is an upgrade of the 6MW platform. The team at Siemens has refined solely those turbine components needed to increase electrical output.

According to Siemens, the SWT-7.0-154 delivers nearly 10% more energy production than the predecessor under offshore wind conditions while retaining the same proven reliability. The new model is already set to go into series production by 2017.

For its part, Dong Energy has strengthened its ties with Siemens. The second phase of the Walney Extension Offshore Wind Farm will have a total capacity of 330MW.

The Danish company has decided to split the offshore wind development project Walney Extension, into phase 1 and 2, each with a capacity of 330MW. MHI Vestas Offshore Wind has been selected as the preferred supplier for phase 1.

Source: Siemens

Alstom receives NTP for Deepwater Wind project

Alstom has received formal notice to proceed (NTP) from developers of the Deepwater Wind project.

Earlier this month, Deepwater Wind Block Island, a wholly-owned subsidiary of Deepwater Wind, secured debt and equity funding needed to construct and operate the 30MW Block Island Wind Farm. Located about three miles off the coast of Block Island, Rhode Island, the Block Island Wind Farm is scheduled for commercial service in the fourth quarter of 2016.

Alstom and Deepwater Wind announced a contract in February last year. This notice represents final contractual authorisation for Alstom to proceed on engineering and manufacturing.

Wind turbine, foundation and electrical interface engineering is advancing on schedule to meet Deepwater Wind’s project specifications, including installation of the five foundations during summer 2015.

Source: Alstom

Gamesa and Areva form JV

Gamesa and Areva have agreed to set up Adwen, a joint venture dedicated to offshore wind. Adwen is chaired by Louis-François Durret, CEO of Areva Renewable Energies.

The joint-venture is responsible for the design, manufacturing, installation, commissioning and services of offshore wind turbines. The entity has corporate offices in France, Spain, UK and Germany.

The Board of Directors is composed of eight members, four appointed by each parent company. The General Manager is Luis Álvarez, Chief Operating Officer of Gamesa’s offshore activities.

The Adwen 8MW platform will reach serial production in 2018. The Adwen 5MW platform offers two complementary 5 MW turbines available for immediate projects.

Adwen will manufacture these turbines in its existing plants in Germany, Bremerhaven and Stade, ideally positioned to equip North Sea and Baltics projects. The company will fulfill industrial commitments engaged by Areva and Gamesa, in France and in UK.