By Magnus Ebbesen, Floating Wind Segment Lead, DNV
The U.K. Government has set ambitious targets to deliver 1 GW of floating wind by 2030. The Crown Estate Scotland is targeting multiple floating wind projects through the ScotWind Leasing review, where 20-30% of the 8-10 GW of leasing capacity is anticipated to be floating and the Crown Estate (England) announced a new leasing opportunity for commercial-scale floating wind projects in the Celtic Sea that would see project capacities increase threefold from present, up to 300 MW each.
Despite ambitious targets, floating wind is currently too expensive to compete with more established ways of generating power. All of the first eight floating wind pilot projects have or will receive generous financial support. However, DNV projects that floating wind will reach commercial-scale deployment, learning as it goes and acquiring existing knowledge from the oil and gas industry in the next 15 years.
DNV’s Energy Transition Outlook (ETO) forecasts that Europe will spearhead sector expansion up to 2030, as policy makers and companies seek to replicate the “technology leader” role that has been so successful in onshore and bottom-fixed wind. After 2030, substantial sector growth in floating wind will occur in Asia, with China in the lead.
Our ETO projects that the Levelized Cost of Energy (LCOE) for floating wind will reduce by 80% in the next 30 years – with 74% of the cost reduction occurring before 2030. This is an important distinction – because although China will be responsible for the largest installed capacities of floating wind by 2050 – Europe will drive the majority of cost reductions in the coming years.
While there are many enablers for the reduction of costs in floating wind, the biggest cost reductions will occur in turbine cost, foundation cost and OPEX (operating expenses):
Turbine cost: The 65% reduction in turbine cost for floating wind in the next 10 years will be driven by scale and reduction of risk. Today, floating wind farms have three to five wind turbines, whereas by 2030, the expectation is 15-50. Achieving this level of scale will significantly drop the cost per MWh. Subsequent to 2030, when the floating wind industry matures it is expected that the cost of floating wind turbines will follow the same cost trajectory curve as bottom fixed wind turbines.
Foundation cost: Today, floating foundation costs are five times higher than bottom fixed. The high cost is driven by the level of experience, supply chain and the relative cost of components compared to fixed bottom foundations. For example, for the same 8 MW turbine, a fixed bottom foundation typically requires 1,000 tonnes of steel, while a floating structure can require twice that. Although floating foundations might be more expensive than their fixed bottom counterparts, in the next 10 years – massive reductions in cost (from five to two times) are expected as a result of technology optimization, scale, standardization and supply chain.
OPEX: Today, OPEX is five times higher than bottom fixed – mainly due to the smaller number of turbines and associated risk and uncertainty. Turbine size and project scaling will be the primary driver for cost reductions out to 2030, followed by other factors such as operational experience, floating infrastructure inspection and maintenance improvements. By 2030, we project that OPEX costs will drop down to levels nearly equivalent of those currently experienced with bottom fixed.
It is clear that wind farm and turbine scale, and risk reduction will play an important role in major cost reductions. Larger wind farms mean that investment costs and operational expenditures per MWh go down. Coupled with that, larger wind turbines will reduce development costs and costs related to fabrication, installation and operation per MWh. And as the industry matures year on year – the lower risks and the development of the supply chain will help to drive costs further down.
It is clear that with ambitious floating wind targets – the U.K. has a strong role to play in lowering the cost of energy. In the coming years, it will be crucial to secure near-term financial support for projects, a pathway to competitive auctions and further cooperation and sharing through large-scale industry initiatives.
Magnus Ebbesen holds a Master of Science in Engineering Science and Computer Science from NTNU and has worked in DNV since 2009. He is the floating wind segment lead in Northern Europe. Magnus has since 2013 worked primarily with managing and contributing to technical due diligence, market assessment and cost- and risk-assessments for offshore wind. Magnus has in this period led technical due diligences for bottom fixed offshore wind projects in UK, Germany and Taiwan and numerous floating offshore wind projects. He has also conducted floating wind market- and cost studies for many of the leading floating wind developers.
DNV are sponsors of RenewableUK and Scottish Renewables' Floating Offshore Wind 2021 conference and exhibition taking place from 15 - 16 September at P&J Live in Aberdeen. The event is now sold-out for in-person tickets, however virtual access tickets are available from £145.00. Register online at: https://events.renewableuk.com/fow21-registration