The costs of offshore wind have been rising, due in part to the rising cost of energy, which has pushed up the costs of materials like steel. As a result, offshore wind capital costs have doubled in the last five years. The UK Energy Research Centres new report on the issue, ‘Great Expectations’, estimates that costs will remain high for the next few years, but suggests that they will begin to fall by 2015, with a ‘best-guess’ reduction in costs of 20% by 2025, and continued reductions after that.
Some of the costs are linked to grid connections, which can be very expensive for marine cables. As I’ve reported before there has been a debate over the merits of sharing grid-links to shore between rival projects, with, given the competitive market framework evidently favoured by Ofgem, the risk being that we could end up with multiple links running close by in parallel. However, businessgreen.com says that research carried out by National Grid suggests an integrated approach, with shared grid and services, could cut the capital cost of grid connections by 25%, halving the number of onshore cable landing sites from 61 to 32 and reducing the number of offshore substations from 73 to 45 in the process. The report also claims that the approach would cut the number of onshore AC cables by 77%, and half the length of offshore AC cables required from 1206km to 603km.
Even so, offshore wind is much more expensive than on-land wind, costing £157 and £186 per megawatt hour (MWh) depending on location, compared to £94 per MWh for on-land projects, according to a report published in June by the Department of Energy and Climate Change.
It commented: ‘While offshore is projected to see a large reduction in costs, compared with onshore wind, it will still face much higher costs at £110–125/MWh for projects commissioned from 2020.’ For comparison, new nuclear will, it’s claimed, cost £99 per megawatt hour, while new coal- and gas-power generation will cost an estimated £105–115 per MWh, with carbon capture and storage attached. But the offshore-wind resource is very large, perhaps up to 200 GW in the North Sea, or much more if deep-sea floating wind turbines can be successfully deployed – up to 406 GW in all according to the Public Interest Research Centres Offshore Evaluation. And of course there are no emissions or wastes to deal with, or problems with fuel supply – it’s free and everlasting.
The proof of the pudding though is in the eating. The EU has been at the forefront of offshore-wind development, with the UK now in the lead at 1.34 GW, and the UK, Norway, Denmark, Spain and Portugal are all developing floating turbine systems of 10 MW and above. However, the US has also decided to try to catch up, with a series of offshore-wind projects on the Atlantic seaboard.
A new report, ‘Untapped Wealth: The Potential of Offshore Energy to Deliver Clean, Affordable Energy and Jobs,’ by international ocean conservation organisation Oceana, puts the offshore-wind potential for the US Atlantic coastal region at 127 GW. It claims that harnessing offshore-wind power in Atlantic waters is a much more cost-effective way to generate energy than oil and gas drilling.
Although a five-turbine, 20 MW pilot wind farm 10 miles offshore in Lake Erie may actually be first, in terms of ocean locations, Cape Wind’s 430 MW project in Massachusetts is closest to operation, with Deepwater Wind’s 20 MW pilot project planned for Rhode Island following closely behind. But Maine recently entered the race, as a possible site for Norway’s Hywind floating device, as part of a 30 MW offshore renewable programme, and New Jersey is looking to have 1.1 GW of offshore wind capacity.
There is strong interest in going further out to sea to avoid visual intrusion – with floating devices also being seen as a key potential breakthrough, since, unlike the UK and some other EU countries, the US does not have shallow offshore areas on its Atlantic coast. Moreover, the longer term potential may be very large. A new NREL report puts the total theoretical US offshore wind resource at 4,150 GW, nearly four times current US total installed generation capacity (1,010 GW in 2008). The potential generating capacity was calculated from the total offshore area within 50 nautical miles of shore, in areas where average annual wind speeds are at least 7 meters per second (approx. 16 mph) at a height of 90 meters, assuming 5 MW of wind turbines could be placed in every square km.
China is also developing some of its very large offshore wind potential, put at up to 750 GW in all. So far it’s been relatively cautious, focussing on near-shore options, as happened initially in the EU. A new study by the Wind Energy and Solar Energy Resources Evaluation Centre, run by China’s Meteorological Administration, put the near-shore wind resource at 200 GW, at depths of 2–25 meters, which are ideal for in-shore and inter-tidal wind farms, the latter being in coastal areas that are submerged during flood tides but exposed during ebb tides. But the study didn’t look further out.
In May, according to reports in Windpower Monthly, China opened a public tender for 1,000 MW of intertidal and offshore wind farms in Yancheng, Jiangsu Province, in East China. Electric power company Huaneng has now announced that it will invest $82 m to install 100 of the 3 MW wind turbines developed Sinovel, the largest wind turbine producer in China. Jiangsu Province already has the largest number of projects and an ambitious target to install 10.75 GW offshore wind power by 2020. But it seems that China will experiment with four intertidal and offshore wind farms first, before considering whether to go further out, with costs being a key issue.
Deep-sea wind, as being pioneered in the EU and now possibly in the US, is certainly unproven so far, and the cost of installation are higher in deep water, but the new generation of floating wind turbines may yet make it possible to exploit the very large resource further out at lower costs.
*It may not all plain sailing though. Fred Olsen Renewables (FOR) has pulled out of the Crown Estate’s Scottish offshore wind programme to concentrate its efforts on land since it evidently sees that as more commercially attractive in the short term. It has ceased working as the preferred developer for the 450 MW Forth Array wind farm off the east coast of Scotland. In addition, the UK’s offshore wind programme is throwing up some conflicts, not involving objections from local communities, as in the case of some on-land project, but from existing offshore wind projects, worried about new projects, in effect, stealing their wind. The developers of Boulfruich Windfarm near Dunbeath have evidently complained that plans by Caithness Power to build four larger wind turbines less than a mile away at Latheronwheel will cut their electricity production by a quarter – and have lodged an official objection to the new site. Lawyers for Boulfruich told Highland Council planners: ‘It’s too close and will impede performance of the wind turbines.’ Conflicts over wind-access rights used to happen occasionally in the middle ages. Seems like, as ever, it will create more work for lawyers!