To judge by the packed conference halls at floating wind industry events this year in Houston, Tokyo, Aberdeen and even Portland, Maine, you’d think the sector was in good health, heading fast toward previously predicted multi-gigawatt forecasts from various parties – with many still suggesting as much as 10-16GW could be built and turning by the end of this decade.
The prospects are in fact now very different, more likely 1-2GW, with the largest share being in China.
Despite the sector having expanded from a single turbine off Norway in 2009 to some 250MW now in operation around the world, floating wind’s 350GW project pipeline is still just very much that, a ‘pipeline’, and, from Aegir’s numbers, the sector is unlikely to have a single commercial-scale (that is, 300MW-plus) project in operation by 2030 – except perhaps off China.
Ponderous site permitting processes and a lack of clarity on support mechanisms have a great deal to answer for, of course, in slowing the pace of floating wind’s cost-reduction efforts. The conventional bottom-fixed sector’s story of cost-out in the last decade came from numerous North Sea nations providing substantial subsidy schemes which allowed supply chains to take shape around steady, long-visibility delivery orderbooks. This was a risky bet with offshore wind then sitting above €150/MWh ($158/MWh) but one that paid off with that figure falling 70% over a decade.
Today, it is hard to see any government making that kind of wager on floating wind to achieve such speed and certainty of cost-out. That would require gigawatt-scale support, rather than megawatt-scale as is currently the case.
To be sure, the past year has been banner for floating wind. In Europe, Scotland’s 28GW ScotWind awards was 75% in water depths needing floating technology; Norway moved ever-closer to a deepwater auction – while installing the world’s largest floating array, the 95MW Hywind Tampen; Portugal and Spain both pledged floating wind tenders; and France started sailing out flagship pre-commercial projects ahead of a floating-specific auction.
Across in the US Pacific, California handed out leases for some 6GW+ of floating developments, and advanced deepwater auctions off Oregon and in the Gulf of Maine. And in Asia, first commercial projects are pushing ahead with permitting, with some line-of-sight on final investment decisions.
But more tellingly, many Northern European countries, including Denmark, Germany, and the Netherlands, are substantially expanding fixed-bottom lease rounds, which will without question be far cheaper acreage than what can be found in prospective floating wind areas around the North Sea. And in the US, scoping work for upcoming leasing in the Central Atlantic and Gulf of Mexico by federal authorities has quietly been shifted closer to shore, shelving deepwater areas for the time being.
Monopiles mount a challenge
Floating wind faces another challenge too: the XX(X)L monopile. Not long ago it was debated whether bottom-fixed projects would be confined to water depths of under 40 metres, with 40-60 metres the preserve of jacket foundations, and anything deeper the domain of floating platforms. But monopiles have continued to grow beyond earlier expectations, and concepts are now being designed to be piled-in in water depths as great as 60 metres, after which jackets could go deeper, cutting into the market for ‘shallow water’ floating.
The fear rarely shared publicly in floating wind circles is that these market crosswinds could lead to small-scale, fragmented deployment of lead-off projects across three continents. This is not a recipe for successful cost-out.
Floating wind, from our view at Aegir, still has a bright commercial future – just not by 2030. But to ensure this reality does eventually materialise, government and industry needs to shake itself out of the delusion – not least at sector conferences – that floating wind is on anything like the trajectory of the once-claimed 10-16GW operational by 2030.
The longer this unrealistic view of floating wind’s near-term future persists, the longer we are ignoring the major interventions needed to get the sector on a commercial track.
• Scott Urquhart is CEO at Aegir Insights