Rapid growth places strain on cable supply

With offshore wind poised for huge growth and sites increasingly located further from shore, the availability of cables and the capacity to lay them are becoming major concerns. Also, manufacturers are understandably reluctant to ramp up production until projects win consent

Most of the offshore wind farms currently operating, whether in the seas of northern Europe or eastern China, are relatively close to shore and typically rely on one offshore substation with an alternating current export cable run to shore. Many of the projects under development, however, are larger and tend to have inter-array cables connecting the individual turbines or clusters of turbines with the wind farm.

The use of high-voltage direct-current (HVDC) submarine cables, which was traditionally reserved for connecting islands to national grids, looks set to extend rapidly to grid interconnections and connecting offshore wind farms. According to the 2011 Submarine Power Cables Report by Pike Research, this is still "a niche market with few purchasers and even fewer manufacturers and installers". The question now is whether the handful of industry players able to make and lay these cables can cope with the rapidly increasing demand.

More than 90% of the world’s offshore wind power is currently installed off northern Europe, in the North, Baltic and Irish seas. Most of the rest is in demonstration projects in China. But Japan, South Korea, the US and India are also gearing up to develop offshore wind power. The reason for such activity is simple: offshore wind offers large-scale, low-carbon electricity generation near the major demand centres of the world’s big coastal cities. This precludes the need for long transmission lines to get power from often-remote wind farm sites to where it is needed, as is often the case with onshore generation.

Growing pressure

But although the overall length of cable required ought to be proportionately lower for offshore wind than for onshore, the sheer scale and speed of what is now planned, particularly in the North Sea, is putting significant pressure on the offshore cable supply chain.

Europe witnessed an example of looming shortfalls in the cable supply chain earlier this year. Dutch-owned transmission system operator (TSO) TenneT, which also operates in Germany, wrote to the German government in February saying that two offshore wind clusters due to be commissioned in the German Bight in the southern North Sea, Global Tech 1 and Nordsee Ost, might be delayed because of a shortage of cables.

TenneT warned it would be unable to meet demand for connections to new offshore wind projects "under current conditions and at the current speed". The TSO said it needed more time and a better financial incentive to complete connections to the two cluster projects and a further seven schemes requiring a total 5GW of wind farm-to-shore transmission capacity.

TenneT has faced criticism for not anticipating such constraints, but there is a consensus that the cable supply chain has real problems. "There is truth to the argument that supply constraints are increasing," says Björn Wittek, head of offshore wind at German port logistics company Rhenus Midgard. The 30-month timeframe TSOs like TenneT are given to secure offshore connections, Wittek suggests, may need to be reviewed.

However, these problems are not confined to Germany or necessarily brought about by German transmission arrangements. Ian Gaitch, business development director at UK marine services firm Offshore Marine Management, warns of concerns everywhere.

With ongoing work and ambitious plans for the UK and Germany, plus large-scale prospects in China and South Korea, Gaitch thinks the situation is serious. "I wouldn’t be surprised if in three to four years’ time we see in China a pipeline of projects the size of the German market. In addition, there are demands on cables from interconnector projects such as those in Europe."

Part of the problem is the limited number of large-scale cable manufacturers, says Gaitch. "The market is very tight, and using Far East manufacturers for European projects, though possible, is expensive in terms of transportation costs unless those Far East manufacturers set up bases in Europe."

Vessel shortages

Cable shortfalls are compounded by shortages of specialist vessels. "The three major European manufacturers currently have access to one large vessel each," Gaitch says. More are needed, but it takes two years to build a cable-laying vessel — although not quite as long to convert an existing vessel so that it can lay cables. Gaitch believes one way round the vessels and cables shortage is to move away from logistics that are planned on a project-by-project basis. "It would be better if developers could sign up for four or five projects," he says.

Offshore Marine Management operations director Eckhard Bruckschen believes the big utilities developing offshore wind projects are in a position to do this. "Big organisations like E.on, RWE and Dong should be capable of thinking further ahead," he says.

Flexibility in vessel use could also be helpful. Using cable vessels for functions such as survey work, inspection and construction support when not actively cable-laying is something the offshore oil and gas industry has been doing for years. "Using a vessel 200 days a year for one function will cost a lot more than using it for other things as well 300 days a year," says Gaitch.

Ironically, the advent of far-shore wind projects such as the UK Round 3’s Dogger Bank does not necessarily exacerbate the cabling problem. Apart from the sheer length of cable required, much of the difficult work is in reasonably shallow water. However, for far-shore cable-laying and maintenance operations, wave heights and shorter weather windows are going to be an issue.

As a fast-expanding market, cabling for offshore wind should offer the perfect opportunity for players in the oil and gas sector to come forward. But the demands of offshore wind are different; some companies that did try to move across from oil and gas to offshore wind failed to make a success of it. As a result, the responsibility continues to fall on the handful of current cable manufacturers to cope with the rapidly growing demand.

The economics of vessel hire are also unfavourable to wind. With oil and gas companies able to pay top rates for vessels, offshore wind developers look set to remain in a weaker negotiating position when it comes to haggling over the few vessels that are available for the growing job in hand.

Cable companies will hesitate to step up production until offshore projects are approved and consented, but by then it may be too late to ramp up capacity or build the vessels needed to lay the cables within the timescales required. In some ways it is the ultimate chicken-and-egg situation, but one that might threaten the next round of offshore wind expansion unless some collaborative and strategic thinking is put in place. 

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