Where are we today in the Offshore Wind Industry?...Where we are today in the Offshore Wind Industry 13/09/2017 Miriam Noonan ore.catapult.org.uk @orecatapult Agenda •Brief Overview

2017 Wind Energy Systems Engineering Workshop

Where we are today in the Offshore Wind Industry

13/09/2017 Miriam Noonan

ore.catapult.org.uk@orecatapult

Agenda

• Brief Overview of ORE Catapult• Offshore Wind in Europe Overview• Cost Reduction - What we’ve seen so far• Cost Reduction - What do we expect to

see in the next 5 years?• Conclusion


ORE Catapult Overview


The catapult network:A long-term vision for innovation & growth

Catapults

• Established by InnovateUK• Designed to transform the

UK's capability for innovation • Core grant leveraged with

industry and other public funding 140 employees –strong collective experience

• >80 technical experts (research and engineering)

10


Testing and Demonstration Assets

Dual axis blade testing Bearing testing

Novel cables Real data for real simulations


Offshore Wind Overview


• Forecast European capacity to ~24GW by 2020 and 60GW by 2030• Includes 10GW in UK by 2020 and 20GW by 2030• Estimate average ~€6-7bn per year required

Offshore Wind Deployment in Europe

0

20

40

60

80

100

-

10

20

30

40

50

60

2015 2020 2025 2030

€ bn

GW

Estimate of Europe Offshore Wind Cumulative Installed Capacity and Investment

UK Other Investment


• Between 3 countries, up to 7,500MW available over 2 years of auctions

• Each country has different regulatory regimes In common – competitive bidding Key difference – UK and Germany currently competing sites;

Netherlands bidders compete for same pre-consented sites. Germany will be changing to a Dutch-style model for installation from

2026 onwards.

High-level European Context

Country 2017 (MW) 2018 (MW) Total (MW) Finance

Germany 1,490 1,550 3,100 €7bn

Netherlands 700 700 1,400 €3bn

UK 3,200 3,200 €8bn

Total 3,750 3,750 7,500 €18bn

Upcoming Auction Rounds – Potential capacity


Cost Reduction - What we’ve seen so far


Quantitative Results

Cost Reduction Monitoring Framework 2016-17

142121

97

- 20 40 60 80

100 120 140 160

FID 2010-2011 FID 2012-2014 FID 2015-2016

LCO

E (£

/MW

h)

FID Target (£/MWh):

• LCOE reduced 32% in 5 years• £100/MWh target achieved 4 years earlier than anticipated

http://crmfreport.com/


Qualitative Results

Cost Reduction Monitoring Framework 2016-17

• Nearly all indicators on or ahead of target

• All indicators medium or high confidence on outlook

http://crmfreport.com/

Inner rings: 2014/15Middle ring: 2016 scoreOuter ring: 2020 outlook

Inner and main ring:Ahead of targetOn targetBehind targetMissed target

Outer ring: High confidence Medium confidence Low confidence


Cost Reduction - What do we expect to see in the next 5 years?


Cost Reduction - UK Focus

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20

40

60

80

100

120

140

160

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023Leve

lised

Cos

t of E

nerg

y (£

/MW

h)

LCOE at FID

FID

2020 target £100

LCOE implied by CfD auction strike price ceilings


Competitive Bid Pricing

-

20

40

60

80

100

120

140

160

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023Leve

lised

Cos

t of E

nerg

y (£

/MW

h)

LCOE at FID

FID

2020 target £100

LCOE implied by CfD auction strike price ceilings

~LCOE for €72.70

Borssele 1&2

~LCOE for €63.80

Vesterhav

~LCOE for €54.50

Borssele 3&4

~LCOE for €54.50

German Auction Round

2017

UK CfDAllocation, 2017


What’s driving this cost reduction?

• Increasing capacity factor• Larger turbines• Longer life assets

Technology

• Operating synergies • Optimising site locationsLocation

• Lower debt rates• Lower insurance premiums• Increasing market competition

Market Confidence


Competitive Bid Pricing


So what’s next?

Statoil, Hywind Scotland

JDR Export Cables

Enabling TechnologiesFloating Wind - Deepwater locations

- Simple installation and decommissioning

Larger export systems

- Further from shore- Higher capacity cables- Larger developments

Continued Cost ReductionEfficient Operations

- Improving O&M strategy- Higher capacity factors- Specialised vessels

GrowingMarket

- Established supply chain- Economies of scale


Thank You


BLYTHORE CatapultNational Renewable Energy CentreOffshore HouseAlbert StreetBlyth, NorthumberlandNE24 1LZ

T +44 (0)1670 359 555F +44 (0)1670 359 666

GLASGOWORE CatapultInovo121 George StreetGlasgowG1 1RD

T +44 (0)333 004 1400F +44 (0)333 004 1399

LEVENMOUTHORE CatapultFife Renewables Innovation Centre (FRIC)Ajax Way Leven KY8 3RS

T +44 (0)1670 359 555F +44 (0)1670 359 666

[email protected]

Contact us


Who we work with

Research Advisory GroupIndustry Advisory Group

SMEsPartnerships & strategic alliances

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Documents

Where are we today in the Offshore Wind Industry?...Where we are today in the Offshore Wind Industry 13/09/2017 Miriam Noonan ore.catapult.org.uk @orecatapult Agenda •Brief Overview