Floating Wind, time for a breakthrough?

With a clear pipeline of projects and competitive tenders, floating wind can achieve its potential

“Floating offshore wind holds the key to an inexhaustible resource potential” according to WindEurope. Is now finally the time when floating wind will see a breakthrough? How substantial is the step from bottom-founded offshore wind to similar scale floating offshore wind projects?

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First, similarities between floating offshore wind and bottom-founded offshore wind are substantial and many of the lessons can be transferred:
  • The basic technology requirements for floating wind are, in many ways, similar to that of bottom-founded. Critical cost drivers such as turbine technology and turbine maintenance are similar and will remain so for the coming decade. Added to that, methods for serial production of large steel structures are now well-known. The use of common technology and processes means that the wheel does not have to be reinvented and the experience gained in bottom-founded projects can be used to a large extend.
  • Standardisation in offshore wind is helping to achieve economies of scale that will also benefit floating projects. Even as ever-larger turbines are developed, the processes to design, manufacture, install, commission and maintain the projects are largely well-developed. Many of these processes can be transferred directly to the floating wind industry, as well as from Europe to the rest of the world.
  • Project finance for floating projects seems possible. However, more stringent financing conditions for the first floating projects are needed, similar to the first bottom-founded offshore wind projects a decade ago.
Without a doubt, some challenges remain and are not to be underestimated. These challenges were summarized by the Carbon Trust and findings from Phase 1 of their Joint Industry Project indicate that progress is being made on all fronts:
  • There are significant ongoing technology battles. Spar, semisubmersible, and barge structures are in the water and operating in pilot projects, with several designs under development. The main issues are cost reduction in the form of reducing quantities and improving production and deployment times. Recent results from the Taiwan tender show that large foundations do not necessarily push the LCOE out of acceptable ranges.
  • Similarly, there are major challenges in the high-voltage electrical infrastructure. Even here, interesting developments are taking place, with floating substations and existing electrical equipment now deemed feasible, and high-voltage dynamic cables being under development.
  • On the installation side, bottom-founded wind has shown that installation methods and speeds can be drastically improved from the first projects, as contractors and developers optimize their strategies
Finally, current subsidy levels for floating projects are between €200 and €300/MWh. To justify subsidizing and financing floating projects, the cost of energy will have to be brought down substantially. This seems like a long way off, but the signs are favorable:
  • Recent developments for bottom-founded projects have shown LCOE of projects can be reduced fast, if there is (1) a sufficient and continuous international project pipeline to attract (the right) investors and contractors, (2) a stable regulatory regime is in place and (3) market competition is created.
  • Main cost drivers are quite similar between bottom-founded and floating offshore wind. It is likely similar turbines can be used and floating substructure weights can be brought down to levels competitive with bottom-founded foundations.
  • The recent developments in the Taiwan tenders have shown the market has an appetite to take up projects in complex conditions and new markets; and with the right group of experts, challenges can be effectively managed.
Conclusively, challenges remain for floating projects and substantial steps have to be taken. The offshore wind market has shown it has an appetite and capability to take up challenges effectively once the right conditions are created.

Recent experience of BLIX supporting the Dutch government in setting up the current tender system for offshore wind and preparing the concessions shows that at least seven years are required between building up an effective regulatory framework and the start of the construction of the first projects. Therefore, to fill the current gap in the pipeline between 2021 and 2025, the time has come for the governments of e.g. France, Scotland and Japan to announce large-scale concession tenders for floating projects and set the first steps in the breakthrough of large-scale floating offshore wind. BLIX is ready to give its support.