The widely anticipated but nonetheless market-shaking move in October by Danish turbine maker Vestas to buy out offshore wind joint venture partner Mitsubishi Heavy Industries (MHI) to take full control of MHI Vestas was rooted in a clear commercial imperative: an international sea-based wind fleet foreseen expanding out by mid-century toward 1.5TW from the 30GW now turning.
But for Vestas, acquisition of MHI’s 50% – which has received regulatory approval from the European Commission and is expected to reach close by the end of the year – has a wider resonance for its mission to “lead in the industrialisation of the world’s clean energy” system and fits within a portfolio strategy that includes solar, energy storage and other renewables technologies, says recently installed CTO Anders Nielsen.
“The more industrialised we can be [as an industry] the bigger the role we can play [in the energy transition]. For Vestas as the biggest player onshore and [once the transaction with MHI is complete] offshore, we can hopefully do a lot. I do see, for instance, opportunity for getting a lower levellised cost of energy for offshore wind – and somewhat too on onshore – [through technology improvements],” he said, speaking to Recharge in his first interview since taking on the role several months ago.
“We know that the biggest growth [in the wind sector] will be on the offshore side … and we see this in terms of [gigawatt-scale] offshore wind as well as the smaller near-shore sites, where we of course want to have a leading position as well.
“Like onshore where we tailor our turbines to the different [market] niches, we want the same for offshore, to have different products for different applications. As you say, it is ‘horses for courses’.
Just what size market this will agglomerate as, he adds, might be “a little dangerous” to forecast, but says Vestas shares the general analyst view that the offshore wind build-out is on its way toward reaching 25GW a year – not far off the total 28GW global fleet turning today.
To “get down to where the fat fish are caught”, as Nielsen puts it, and capitalise on the rapidly expanding sea-based wind market, Vestas will be looking to its EnVentus turbine concept for firepower.
The next-generation modular design launched last year for onshore with models up to 6MW can be stepped-up as large as might be needed offshore, a nameplate currently seen to be capped by engineering limits at 20MW. This will be key say industry analysts if Vestas is going to take a larger slice of a sector currently divided up with two other Western OEMs, front-runner Siemens Gamesa and the US’ GE, which has the biggest turbine up and turning, the 13MW Haliade-X.
Offshore will be a very important part of the wider wind market for us to participate in
Vestas CTO Anders Nielsen
“This is [a reinforcement] of the strategy we set out [when the EnVentus was launched]. We see it as a natural way of working and one that works for ‘pure offshore’ offshore. It will be a very important part [of the wider wind market] for us to participate in,” says Nielsen.
“On our journey to have the most prominent role we can as the biggest wind turbine manufacturer in the world we have developed a deep understanding of the areas where you can standardise and those where you can’t.
“Offshore or onshore you will not be able to carry over 100% of the technology, of course. But the technology I can carry over may afford me a ‘performance step’ [to boost capacity or improve efficiency] that I didn’t otherwise have. With onshore and offshore together [in the Vestas portfolio] we will able to do that in a more intelligent way.”
This philosophy both harkens back to Vestas early forays into wind at sea, with its 7MW V164 offshore model being a marinised upscaled version of onshore turbine technology now with a nameplate of 10MW, as well as travelling out more widely at the OEM at a time when it is methodically reinventing itself from being a turbine OEM into a ‘energy solutions provider’ for what previous CTO Anders Vedel referred to as “a post ‘pure-wind’ future”.
Evidence of its views on how clean-energy power production will look in the coming years can been seen equally in early work in hybrid wind/solar-storage projects such as the earlier Lem Kær pilot in Denmark and the Louzes hybrid plant in Greece, as well as with the world’s largest renewables project, the 15GW Asian Renewable Energy Hub in Western Australia, which will be built around gigawatt-scale wind and solar complexes.
“The combination of different renewable energy source will have a big role in future energy mixes in companies and countries and we hope to be able to help drive this through the intergration of wind, solar, storage and so on,” says Nielsen.
Hybridisation is supported by “a portfolio view from investors”, he continues, pointing out that co-locating different power-producing technologies is not the only way to hybridise. “On many levels wind and solar are complimentary [not competitors]. The argument is more ‘how do capture the value of energy?’ rather than just working on the cost side.”
“This plays into [energy] storage, into power-to-X – all of these technologies will be important components in the decarbonisation of the planet,” says Nielsen.
When Vestas in 2016 unveiled a four-rotor concept with a view to “challenging the rule” that wind turbines must always increase in scale to boost power output, it raised some eyebrows. But it reflects a “ process of continuous innovation and exploration” that is embedded in the company’s DNA, in Nielsen’s view, whether it is a new turbine design or plant-level hybridisation.
“We are looking into all of these technologies”, states Nielsen, admitting “you have to take some bets”.