Three key technologies will enable widespread zero-subsidy offshore

OPINION | Key innovations will keep offshore wind on a downwards cost curve, writes Philip Totaro

The offshore wind industry has a unique and timely opportunity to achieve lower capital and operating costs, as well as increased annual energy production (AEP), by driving innovation and technology development.

Investments in certain technologies will result in maximum gains as the offshore sector faces an increasingly cost-sensitive market, where subsidy-free competitive markets — as we are now seeing in Germany — may become more common.

Our comprehensive evaluation of more than 1,000 offshore-specific — and 13,000 more general — wind innovations points towards three advances that are likely to have the greatest impact.

The risks of zero-subsidy offshore wind

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First, floating tension-leg platforms (TLPs) can accommodate almost any water depth, and offer the ability for turbine erection quayside, before tow-out for commissioning. This technique provides a more controlled environment than a vessel-based approach, and can significantly reduce installation and commissioning times; improve turbine and/or foundation repair cycle time; and reduces crew access risks.

Installation costs have also been considered disproportionately high in recent years, leading to exorbitant margins for installation as commissioning schedules are regularly being met or exceeded — thanks to new purpose-built vessels being brought on line and best practices from years of learning being put into place. The TLP technology development should remove the need for such a significant schedule margin.

Second, predictive maintenance scheduling, as part of an overall condition-based maintenance regime, will significantly reduce operating expenditure. Predictive maintenance scheduling uses a computer-based modelling system to determine the minimal revenue impact of future scheduled maintenance, based on component monitoring and remaining useful-life calculation.

Machine-learning algorithms can be programmed to assist in determining failure date, failure probability, and the net present value of repairs, which can help determine when to schedule the maintenance window and when to order spares. This will reduce operating costs by up to 37% (compared to the 2016 average) by 2026.

Combined with turbine controls, output from a single machine or an entire wind farm can be regulated to ensure appropriate life extension while meeting cost-optimal maintenance window.

Third, just as with onshore technology, energy output optimisation can have a profound impact on increasing AEP and improving the levelised cost of energy (LCOE). This will be governed by complex algorithms that can determine whether it will be more profitable to deliver power to the grid or an energy storage system (and then sell the electricity when the market offers better pricing).

In the past 27 years of offshore wind innovation development, there have been only a few innovations focused on AEP enhancement in offshore wind, other than new turbine models with increased capacity. This newly developed technology represents an opportunity to provide substantial LCOE improvement, and it can be leveraged in both onshore and offshore wind environments.

The combination of these technical solutions points towards a more system-engineered approach where an entire project site can be delivered more expediently. Some developers are beginning to vertically integrate some of these capabilities, or partner with OEMs that themselves can offer turnkey solutions in turbines, foundations, EPC and services.

It is also noteworthy that improving component reliability and de-risking installation challenges will cut the weighted average cost of capital, as project execution risk and installation uncertainties can be reduced. The net effect will be new sources of capital entering the sector, as more lenders find offshore wind to be an attractive asset class for investment.

All these elements are combining to ensure that offshore wind will remain competitive — while opening up the sector to new markets around the world. 

Philip Totaro is chief executive of innovation strategy consultancy Totaro & Associates

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