Making offshore wind pay

In the next decade, off­shore wind pow­er capac­i­ty in Europe will grow ten­fold. But this huge growth will only be realised with the sup­port of a strong net­work of sup­pli­ers.

From sub­sea cable man­u­fac­tur­ers, net­work trans­mis­sion box devel­op­ers and skilled installers, to project devel­op­ers and con­sul­tants, elec­tri­cal engi­neers and main­te­nance per­son­nel, the sup­ply chain for off­shore wind is a com­plex one.

Tur­bines need tow­ers, blades and dri­ve train com­po­nents, and sub­struc­tures to sup­port them in tur­bu­lent seas. And sea ves­sels are need­ed to sup­port repair, main­te­nance and instal­la­tion func­tions.

Evi­dence sug­gests that the sup­ply chain is respond­ing well to the chal­lenge. Much of the focus so far has cen­tred on wind tur­bine man­u­fac­tur­ers, but they are only part of the pic­ture. More than half of the cap­i­tal expen­di­ture on off­shore wind is typ­i­cal­ly spent on things like foun­da­tions and cabling, and as much as a third is reserved for oper­a­tions and main­te­nance.

By 2020, €10.4 bil­lion (£8.4 bil­lion) will be spent on off­shore wind ener­gy every year, accord­ing to the Euro­pean Wind Ener­gy Asso­ci­a­tion (EWEA). And between now and then, almost €66 bil­lion (£53 bil­lion) will be invest­ed in the entire sup­ply chain.

“It’s a good busi­ness to be in,” says  Jan Declecq, head of busi­ness devel­op­ment at CG Hold­ings, one of the lead­ing trans­mis­sion and dis­tri­b­u­tion com­pa­nies, which has won a num­ber of con­tracts to design, engi­neer and install onshore and off­shore sub­sta­tions. “The off­shore mar­ket offers good oppor­tu­ni­ties for good tech­nol­o­gy – that’s why we’re pos­i­tive.”

It is a mar­ket that has seen a raft of new play­ers emerge. But it has also pro­vid­ed big oppor­tu­ni­ties for well-estab­lished busi­ness­es to diver­si­fy. “Take HVDC [high-volt­age direct cur­rent] con­vert­ers, for exam­ple. There are a myr­i­ad of com­pa­nies that could sup­ply into that space,” says Adri­an Fox, sup­ply chain man­ag­er at the Crown Estate, which owns the UK’s seas. “Com­pa­nies that might cur­rent­ly sup­ply to the auto­mo­tive sec­tor could make slight changes to their busi­ness and become sup­pli­ers to the off­shore wind indus­try.

“Last year, Goliath Cranes signed a £500,000 deal with RWE to sup­ply small cranes for the back of its access plat­forms. It wasn’t some­thing they had looked at before.”

The lat­est of the Crown Estate’s UK sup­ply chain events con­venes tomor­row, in asso­ci­a­tion with Off­shore Wind Eng­land, at the Nation­al Exhi­bi­tion Cen­tre in Birm­ing­ham, where major devel­op­ers and sup­pli­ers will dis­cuss the sector’s prospects.

Turning wind into energy

Europe’s off­shore wind mar­ket is depen­dent on infra­struc­ture renew­al projects com­ing to fruition in the next few years. From elec­tri­cal cabling, main­te­nance and repow­er­ing oper­a­tions, to sub­sta­tion con­struc­tion, elec­tric­i­ty grid upgrades and port expan­sions, it is crit­i­cal that the appro­pri­ate infra­struc­ture is in place to ensure off­shore wind becomes a viable future ener­gy source.

Of course, man­u­fac­tur­ing plants are need­ed for the tur­bines them­selves. But oth­er infra­struc­ture needs atten­tion too. Accord­ing to a recent study by ener­gy ana­lysts Dou­glas-West­wood, the UK alone needs five foun­da­tions fac­to­ries, 13 cables fac­to­ries and 20 instal­la­tion ves­sels to sup­ply the nec­es­sary kit that will cre­ate 23gigawatts of capac­i­ty by 2020.

The key chal­lenge is to effi­cient­ly deliv­er the pow­er har­vest­ed at sea to the onshore trans­mis­sions sys­tem. As Ste­fan Jon­s­son, head of off­shore wind con­nec­tion at the pow­er tech­nolo­gies busi­ness ABB, says: “Trans­port­ing elec­tric­i­ty to the shore and then inte­grat­ing it into the grid for sup­ply­ing con­sumers is a key ele­ment in the suc­cess of this sec­tor.”

Cabling and elec­tri­cal infra­struc­ture does not receive the same amount of atten­tion as tur­bines

As wind farms have got big­ger and moved fur­ther away from the shore­line in recent years, high-volt­age direct cur­rent (HVDC) cables have been increas­ing­ly sourced for their under­wa­ter capa­bil­i­ties and strong per­for­mance in trans­mit­ting pow­er over long dis­tances. But “sub­stan­tial addi­tion­al cable man­u­fac­tur­ing capac­i­ty” is required, accord­ing to the Euro­pean Wind Ener­gy Asso­ci­a­tion.

“The indus­try faces a num­ber of chal­lenges,” says Mr Jon­s­son. “There is an ongo­ing need for tech­nolo­gies that cater to off­shore require­ments, like spe­cif­ic aux­il­iary ser­vices such as cable-lay­ing and crane ves­sels.”

Rhys Thomas, direc­tor of renew­ables deliv­ery at Renew­ableUK, argues that cabling and elec­tri­cal infra­struc­ture does not receive the same amount of atten­tion as things like tur­bines. “Per­haps it’s because they are out of sight, but their impor­tance can­not be under­es­ti­mat­ed,” he says.

Ports are cru­cial to ser­vic­ing a num­ber of sup­ply chain ele­ments. Over the next ten years, more man­u­fac­tur­ers and sup­pli­ers will be locat­ed at port facil­i­ties, and the ports need to be suit­able. To save on trans­port costs, tur­bines, blades, dri­ves and oth­er large, awk­ward and heavy com­po­nents need to be built close to the shore­line, ready to be shipped out to sea. The ports will also have to cater for the increas­ing num­ber of dif­fer­ent ves­sels com­ing on stream to install, repair and main­tain wind farm com­po­nents. 

POWER TO THE UK

CABLES The suc­cess of off­shore wind projects piv­ots on get­ting the ener­gy gen­er­at­ed out at sea back to the shore and into the grid. For this, devel­op­ers need the off­shore cables sec­tor, a high­ly spe­cialised and lucra­tive indus­try dom­i­nat­ed by just a hand­ful of com­pa­nies.

The £2.3‑billion sec­tor is in a healthy state, with demand for cables cur­rent­ly at around 800 kilo­me­tres a year, stretch­ing to around 1,000 by 2014, accord­ing to Bloomberg New Ener­gy Finance.

Three estab­lished play­ers – infra­struc­ture giant ABB, French group Nex­ans and Prys­mi­an of Italy – make up more than 70 per cent of the mar­ket, with new­com­ers NKT and Gen­er­al Cable pro­vid­ing the rest.

Up to now, most of the cables link­ing wind tur­bines to shore have been high-volt­age AC. But in the future, wind farms will increas­ing­ly call on high-volt­age DC (HVDC) sub­sea cables that are capa­ble of trans­mit­ting ener­gy over long dis­tances more eco­nom­i­cal­ly.

But with a lim­it­ed num­ber of sup­pli­ers, there are fears the HVDC cable sup­ply chain could bot­tle­neck, par­tic­u­lar­ly in the sec­ond half of this decade.

The Euro­pean Wind Ener­gy Association’s recent study into the state of the mar­ket high­light­ed a need for “sub­stan­tial” addi­tion­al cable man­u­fac­tur­ing capac­i­ty to meet future demand, espe­cial­ly with lead times for bring­ing new HV sub­sea cable capac­i­ty online cur­rent­ly set at around two to three years.

ABB points out the need to upgrade the onshore cabling net­work to cope with increas­ing off­shore pow­er sup­plies.

“One of the key focus areas is the need to rein­force the onshore grid to enable inte­gra­tion of the pow­er inject­ed from off­shore wind farms and trans­port it effi­cient­ly to con­sumers,” the com­pa­ny says. “This requires the exist­ing grid to become stronger, smarter and more flex­i­ble.

“In terms of the elec­tri­cal trans­mis­sion sys­tem, it is sug­gest­ed that over £14 bil­lion of invest­ment will be need­ed to deliv­er the off­shore net­work con­nec­tions. This means the need for not only off­shore infra­struc­ture, but also sig­nif­i­cant onshore con­nec­tion works and upgrades to the exist­ing trans­mis­sion infra­struc­ture to accom­mo­date the new off­shore gen­er­a­tion.”

In the next decade, offshore wind power capacity in Europe will grow tenfold. But this huge growth will only be realised with the support of a strong network of suppliers.

Turning wind into energy

POWER TO THE UK