Offshore wind rush

Column by Maarten Timmerman, director of BLIX Consultancy

Since the dramatic drop of the costs for offshore wind energy and the fact that some wind projects will be realised without subsidy, the genie seems out of the bottle. The energy transition is accelerating and I read articles every week about countries announcing their new targets. It’s not only countries around the North Sea who are setting the bar high, Asia and North America also have very big plans. The sector will have to do its very best to realise all these ambitious plans.

A lot of wind turbines will be constructed if we may believe the predictions. Europe has the most ambitious targets with an additional capacity of 60 GW scheduled between now and 2030. And this number is likely to increase if besides the usual suspects also other European countries embrace this form of renewable energy. Asia has developed serious plans for realizing wind energy offshore. Not only in China, Taiwan and South Korea evolves a solid business, but also India and Vietnam are exploring the offshore wind potential. The US is also expected to flourish soon, mainly along the East Coast some large projects are in a far developed stage. 

Looking at these plans I expect it will be a huge challenge to actually develop, design, produce and install all these projects. It reminds me a bit of the situation of 10 years ago. I was working on a project where it was one of the main goals to secure long lead items in the development phase. It was not easy to gain commitment of the supply chain. Suppliers were in the luxurious position to choose their own clients instead vice versa. Back then, we were even thinking of buying our own jack-ups, because without commitment of suppliers there was no project, and without a project, there was no commitment of suppliers. It’s my expectation that the coming years some projects will end up in the same split.

But even though it was not always easy to find the right supplier, and we had to work with that one available supplier at that time, we always managed to solve that side of the puzzle. Back then regulations were mostly the reason for project delays. Therefore, I am confident that the supply chain will manage to grow with this necessary pace. And in the end it was not necessary to buy the jack-ups we wanted, because the maritime contractors rapidly expanded their fleet. Also on the side of the cables and foundations we every time succeeded to align everything without large pre investments. And with respect to the wind turbines, well, that always has been a challenge and we did not always have the best negotiation position. It would be great if the sector has a bit more to choose, but given the lucrative growth market I think that will also work out.