A few observations from the offshore wind industry
A savvy Brit recently suggested that the U.S. offshore wind industry should take advantage of European experience. The reason, he said almost in confidence, was that “We’ve made most of the mistakes already.” It’s hard to argue with that logic. Letting novices head up unfamiliar and complex construction projects sounds like a formula for failure.
But in a sense, we do want novices leading unfamiliar and complex construction projects. In particular, we want those people managing the offshore wind farms in U.S. waters because the experience will be priceless. Experience and competition breed innovation and lower costs. Realistically, however, doing it without foreign assistance is unlikely.
Certainly there is a lot to learn. And as an interested observer, here are several observations that come to mind.
First, onshore work is a comparative piece of cake. Offshore costs are outrageous and will have to come down. The first U.S. offshore wind farm south of Block Island, R.I. came with a hefty price tag, some $50 million per turbine. Home owners will be hard pressed to pay for such projects. A recent online report claimed the average Norwegian home paid the most in Europe at 30 ¢/kWh. Meanwhile, a panelist at the recent Chadbourne Global Energy and Finance Conference said production costs in Europe had fallen to 10 ¢/kWh. For comparison, a First Energy electric bill for Midwest homeowners put costs at 6.63 ¢/kWh. But there is hope for lower pricing. A feature story in this issue discusses two significant ideas, one that may partially automate construction and another for lower cost floating structures.
Larger turbines are necessary and coming. It’s hard to imaging turbines larger than 10-MW but some construction firms are betting that 13 to 15-MW turbines within the next few years could keep developers competitive. Consider a 500-MW project. It could proceed with 5-MW turbines now in production on 100 towers, or not-yet-prototyped 10-MW turbines on 50 towers. The latter would mean 50 fewer foundations, towers, transition pieces, less cable, and fewer connections.
The excited talk about offshore work is froth on the industry. By one count, U.S. planners foresee 28 offshore projects with a total potential capacity of 23,735 MW. Most projects, however, take 10 to 15 years from start to finish and that timer only recently started. Such megawatt figures are fun to talk about, but realistic completion dates for more than a few wind farms are around 2027. (The Icebreaker project in Lake Erie could finish by 2020.) Leases have been let for just a few projects, and the foundations, towers, turbines, and cables have not been ordered and won’t be for years.
Plan on a short supply chain. Too much dependence on Europe sends the supply chain across the Atlantic. And plan on at least two U.S. chains to promote competition and prevent bottlenecks. Any offshore wind farm should be as much a job creator for the U.S. as a power generator.
The future is floating. There is not much shallow water, 40 m or less, around the U.S. Maps from NOAA provide accurate depth details. The Hywind floating wind farm in Scotland should be the initial U.S. model. Water in the North Sea measures 30 to 40-m deep out for miles so monopiles there make sense. The idea of sighting turbines in shallow water around vacation spots like Cape Cod may bring years of delays, as it did for Cape Wind. Opposition from residents and professed supporters continued for more than a decade. Hence, the least contested sites will likely be far out in deep water.
Of course, these few observations just scratch the surface of managing offshore wind farm construction. Financing and risk, other areas where there is a lot to learn, sound like Greek to the untrained ear. But if you like learning, the wind is your industry.