More than 1,500 offshore wind turbines are now grid-connected across ten countries worldwide, with global capacity forecast to surpass 18.6GW by 2016. This is offering huge growth opportunities, with European companies leading the developments. Today, 48% of the European businesses operating in the wind sector are exporting their expertise to other countries.
The costs of generating offshore wind are high — almost double those of onshore wind per installed kilowatt — so cost reduction is a key driver. Potential cost reductions of 11-30% have been identified, and it is impossible to overestimate the contribution that the supply chain can make to this process. Foundations are a key element in the cost-reduction drive, representing around 15% of the total cost of an offshore turbine.
Through its foresight-focused work, EU-funded project KARIM has identified three areas for development within the supply chain of foundations and structural fabrication suppliers: innovation, collaboration and support services. While there is plenty of European opportunity for existing foundation and fabrication technology, new foundation design remains a key area, especially for turbines in water depths above 30 metres.
UK Round 3 developments pose new challenges for the foundation supply chain: they are further from shore, at greater water depth and subject to increased environmental loading. The success of new foundations will depend on a number of critical factors (see box, above).
Additional success drivers include improved low-cost coatings and corrosion design life, which would extend maintenance intervals. Reducing structural mass and lowering associated materials cost is also important. These areas represent significant opportunities within a diverse and varied supply chain.
New designs must be developed to meet the challenges of the new rounds of offshore development. Current research and development efforts include the UK’s Energy Technologies Institute’s £25 million (€31m) offshore wind demonstrator, a UK-US agreement to collaborate on floating turbine technology, and the US investment of $180 million into four demonstrator projects. Japan is exploring floating technology by bolting turbines onto barges. A commercial project is being built off the coast of Fukushima, with a capacity of 16MW and due to be operational by 2014.
A typical 500MW wind farm may currently require about €320 million to manufacture foundations and €110 million to install them. Foundations represent approximately 19% of the supply chain, with installation of turbines and foundations accounting for a further 9%.
The largest cost components of foundations are cement and steel. Major beneficiaries of this supply chain are level-one suppliers — companies with direct relationships with the developers and site owners. There are a number of established structural fabrication suppliers, including Sif, Smulders, Bladt, EEN, WeserWind, BiFAB and Aker, but the supply chain is also seeing new entrants such as TAG, Hereema, Shinan and Tata.
In September 2012, Tata opened an offshore processing centre as part of its production site in Hartlepool, northeast England. It will produce welded tubular assemblies for the fabrication of jacket foundations. Tata hopes the centre will help give the company a significant presence in the market, by shortening throughput times and improving cost efficiency. The intention is to store components in kit form and supply them to fabricators across Europe using the local deepwater port. Tata also has a supply agreement with German steel tube producer Eisenbau Krämer.
As opportunities emerge, local ports and regions are keen to see clusters of industry evolve to support developers and level-one suppliers. The north German port of Bremerhaven is an established focus for the industry, along with Cuxhaven and Emden, which have dedicated construction and shipping areas for offshore wind.
The Baltic Sea area is also growing in importance, especially around Rostock and the ferry harbour of Sassnitz Mukran. While the UK has struggled to retain investment and profits locally, there is strong regional competition to create major sites for inward investment. The Tata steel expansion is closely linked to nearby Green Port Hull, which has recently received almost £400 million of investment to develop a 600-metre riverside berth, storage areas and a factory area. The city and developers are hoping associated supply chain companies will move into the dock area.
The Fastwind project in northeast England is supported by a consortium of partners, including Xanthus Energy, Able UK and Ekspan. It aims to deliver a realistic plan for an accelerated offshore turbine assembly and installation factory, with an optimised onshore assembly process using a self-installing foundation system. The SeaBreeze foundation system has a gravity base formed by three circular cellular caissons constructed in reinforced concrete. The caissons are linked through a tri-star frame arrangement to a central tubular column that stands above the surface, and onto which the turbine tower is attached through a standard flange arrangement. The foundation is designed to sit on the sea bed and to resist the lateral forces imposed on it by its turbine.
While concrete foundations have already been used for offshore wind farms, none has used onshore assembly. In addition, the installation can be accelerated as it uses a single-stage process with all the assembly being carried out onshore. This means the wind farm can start generating electricity up to 12 months earlier than is possible using offshore assembly.
More than €51 billion of capital expenditure is expected for offshore wind projects coming online in 2012-16 — six times greater than the preceding five-year period. The UK and Germany will account for the major share of this spend and the scale of projects will also continue to grow. Offshore wind power offers a wealth of opportunities for European companies to prosper.
Erica Russell is head of sustainability and insight at KARIM, an EU-funded programme to give SMEs information and services to help them become more competitive. www.karimnetwork.eu