Offshore Wind AcceleratorDeep Water Wind Farms Seminar

Emilie Reeve24th September 2013

Agenda

The role of innovation to bring down the cost ofoffshore wind

Offshore Wind Accelerator update

Risks to commercialising innovative technology

3

Costs must come downOtherwise projects won’t get built

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Cost per MW installed (€m/MW)

Year

Greater Gabbard

Thanet

Rhyl Flats

Gunfleet Sands

Robin Rigg

LynnBurbo

Barrow

Kentish FlatsScroby Sands

North Hoyle

Source: Emerging Energy Research 2009; Garrad Hassan 2011; Renewable Energy World.com 2009

Drivers– Rising commodity prices– Bottlenecks in supply chain– Complexity of sites, distance, depth– FX rate volatility

ROCs increased from 1.5 to 2

300MW

4

Innovation could deliver 25% cost reduction by 2020

TINA (UK waters) TCE pathways (4 to 6MW, site B)

75.07.4

5.84.03.82.71.4100.0

-25%

2020

Turb

ine

Foun

datio

ns

Inst

alla

tion

O&

M

Dev

elop

men

t

Col

lect

ion

&tr

ansm

issi

onToday

66.0

19.35.13.22.52.41.4100.0

-34%

2020Today

Turb

ine

Foun

datio

ns

Inst

alla

tion

O&

M

Dev

elop

men

t

Col

lect

ion

&tr

ansm

issi

onNote: TINA suggests further cost reduction is possible from turbines if there is more competition – up to ~15% LCOE reductionSource: TINA Executive Summary 17 Jan 2012; initial TCE pathways innovation model outputs 2 Feb 2012

18% excluding turbine 15% excluding turbine

5

Significant opportunity for innovation to drive down costs

Development Electrical Foundations Installation Turbine O&M

It takes time to reach technology maturity – But we do not have time

Source: Library of Congress Source: Qantas

125 yearsSource: Mercedes Benz Source: Mercedes Benz

107 years

Source: Robert W. Righter

1885 2010

1902 2009

Source: NASA?

?Source: MAXIM cars

Source: Vestas

118 years

1888 2006

?

Agenda

The role of innovation to bring down the cost ofoffshore wind

Offshore Wind Accelerator update

Risks to commercialising innovative technology

8Offshore Wind Accelerator

Offshore Wind AcceleratorObjective: Reduce cost of energy by 10% in time for Round 3

Joint industry programme involving 9 developers + Carbon Trust

£45m programme– 2/3 industry– 1/3 public

Only developers are members

Focus on overcoming near-term technical challenges

77% (36GW) of licensed capacity in UK waters

• Research-focused

• May not meet customer needs

• Customer-focused

• Innovators focus on main challenges

OWA is an example of market-pull innovation

Two approaches to innovationUK offshore wind R&D

customer-driven

Offshore Wind Accelerator

Innovators Market

Technology push

Marketpull

Source: Carbon Trust 2011

9

OWA focuses on five research areas to drive down costs

Cost of energy

YieldOPEXCAPEX

…

Cost of finance

Wake effects

Electrical systemsAccess systemsFoundations

Cables

10

Access research group has run projects to address needs of Round 3 wind farms

11

Key Project for OWA Access Identify, de-risk & bring new innovations to marketCreate performance metrics to compare different systemsModel and improve O&M strategies

12

OWA Access Competition resulted in many strong entries

Note: Image represents Round 3 site with V164-7.0 MW. Drawings are of 90m mothership and 30m in-field vessel, drawn to scale. Original picture is of Thanet, courtesy of Vattenfall 2010Source: Carbon Trust 2011

Competition results450 entries30 countries13 finalists

12

Navy inspired surface effect ship

13Source: Umoe Mandal 13

Innovative infield vessel

14

Source: ExtremeOcean

Concept Recovery Basket

15Source: DIVEX

Innovative launch and recovery systems for large daughter crafts

Sources: DIVEX, STX France15

16

Cable Installation research area

Vision

1. Increase the number of suppliers in the market• Internal and external cable-entry systems• Maximise potential suppliers by reducing vessel requirements• Communicate consolidated developer requirements to

industry

2. Minimise offshore operations• Reducing time for installation• Minimising offshore operations

• Reduce waiting on weather• Simplifying systems• Reducing weather sensitivity

3. Integrate cable installation planning into overall projects more effectively

4. Share developer experience of projects

Objective is to identify potential technology and process improvements to reduce cable failure rates and installation costs

17

Innovations with best savings: J-tubeless, free-hanging cablesSummary findings (cost vs baseline, £k/MW) – 2011 study

Baseline

Cable burial techniques

Cable protection design and pull-in operation

Access to and operations from WTG

platformImproved WTG layout

design and cable termination

Installation vessel and on-vessel cable management

Project organisation

ProcessTechnology

37

16

-5

-1

-9

-13

-5

-9

-4

-3

-2

-3

-5

-2

-7

-6

0

J-tubeless cable entry system

Detailed burial depth analysis

Detailed cable route survey

Pre-lay trenching

Post-lay jetting burial

Ploughed, standard J-tube

Contractor framework agreements

Early contractor involvement

Cabling FEED study

Storage tanks & coilable cables

Vessel availability

Dry-mate cable connectors

Improved WTG layout design

Pre-installed platform equipment

Improved access to platform

Cable spec for dynamic conditions

Free-spanning cable

Focus of Stage II Year 3

Source: Cable Installation Study, J P Kenny 2011

18

Free-hanging cable in dynamic environments study

Source: Subsea 2012

– Cables would be hung from transition piece,

rather than pulled through foundation

No J tubesNo DiversFaster installation

Benefits of free-hanging cables

The study is still underwayNext step is fatigue testing at Southampton University

19

Electrical research areaVision: Increase efficiency of collecting and transmitting electricity

Vision

Increase efficiency and reliability of electrical systems for offshore wind.

To develop a higher voltage inter-array system and assess the cost of such a system compared to a baseline scenario.

To accelerate the uptake of 66kV and to establish a closer relationship with the supply chain.

Support cable manufacturers in testing and qualifying 66kV cable.

20

Why 66kV?

5MW Turbines200 Turbines1000MW capacity

3 SubstationRadial configuration

5MW Turbines200 Turbines1000MW capacity

2 SubstationRing configuration

33kV 66kV

60

20

100

40

120

140

80

0Net NPV increase

Substation CAPEX

Equip. CAPEX

AvailabilityLosses

NPV[£m]

Changes in NPV compared to a 33 kV Radial Base Case Improvement in NPV is driven by reduced lost revenue due to increased availability (i.e. the ring design).

The reduction in the number of substation and associated equipment is benefiting

Some cost penalty in terms of wind turbine equipment – i.e. transformers and switchgear

Note: 0.015 failures/km/year was assumes

21

66kV cable qualification competition was launched 20 MayGood pick-up

22

Objective

Foundation research area Vision: Reduce costs in 30-60m depths

To reduce lifecycle costs by 30%

…in 30-60m depths…

…for Round 3 soil conditions…

…and to stimulate supply chain- Designers- Fabricators- Installers

23

Analysis priorities

Installation

De-risking

Foundation competition

Shortlisted FinalistsKeystone

SPT

UniversalFoundation(formerlyMBD)

Source: Carbon Trust Offshore Wind Accelerator 2010, IHC

Stage I Stage II

Fabrication

GBF(Gifford/ BMT/Freyssinet)

24Image: Forwind, 2012

Foundations Two Universal Foundations has been installed to support met masts

25

Keystone Twisted Jacket Installation 2011

26

Keystone Twisted Jacket Installation Complete October 2011

27

Wake EffectsVision is to increase energy yield and reduce financing costs by improving the accuracy of wake effects models

Vision

Generate toolsets and guidelines to optimise yield

Improve prediction accuracy

Reduce uncertainty and hence reduce financing costs

28

First of two Floating LIDAR systems has been deployedDeployed at Gwynt Y Mor in October 2012

Image: RWE Innogy 2012 (C0NFIDENTIAL)

– Objective: to make Floating LIDAR a bankable alternative to conventional met masts

– Performance is validated vs offshore met mast

29

Equipment has been installed for wakes measurement campaign Six LIDARs within E.ON’s Rødsand 2 wind farm

Source: Koppelius 2011

Six LIDAR units to be installed this month– 2 x long-range LIDAR to measure wake effects

throughout farm – 4 x nacelle-mounted LIDARs to record inflow and

wakes at specific WTGs

30

31

Agenda

The role of innovation to bring down the cost ofoffshore wind

Offshore Wind Accelerator update

Risks to commercialising innovative technology

We’re running out of timeTo commercialise new ideas, we need demonstrations – and not enough demonstration activity is happening

Source: TINA Executive Summary 17 Jan 2012

Learning by doing7% reduction

Innovation25% reduction

If we don’t act quickly, opportunity to use lower cost technologies at start of Round 3 will be lost

We can only achieve cost reduction if the industry works together

We need more offshore demonstrations to support market entry of new turbine and foundations designs

34

Test sites for turbines and foundations are limited in UKTurbine innovation will not happen quickly enough without demonstration opportunities

Demonstration site supply and demand for turbine OEMs1

Onshore prototype test site Offshore demonstration site

1. The Crown Estate, August 2011, Gap Analysis of Test and Demonstration Facilities for Offshore Wind Technology. 2. Carbon Trustperspective 2012. 3. It may be more economic to demonstrate concrete structures in a small wind farm, rather than 1 unit due to set-up costs

Shortage of 8-12 onshore turbines by 2015

Shortage of 20-25 offshore turbines by 2015

35

Conclusions

• The industry faces a challenge to reduce costs

• Innovation has the potential to deliver and accelerate large cost reductions

• There are many opportunities to innovate but commercialising the best ideas take time

• Demonstrations are needed to reduce risk and increase confidence in new technology• Especially turbines and foundations

• However there is a shortage of test sites – which needs to be addressed by streamlining planning and consenting and incentivising demonstration in commercial projects

“If you always do what you always did, you will always get what you always got.”

(A. Einstein).