Global Offshore: Current Status and Future Prospects




Twenty-one years have passed since the world’s first offshore wind farm, Vindeby (5MW), was built in Denmark. Today, 4,620 MW[1] of offshore wind power has been installed globally, representing about 2% of total installed wind power capacity. More than 90% of it is installed off northern Europe, in the North, Baltic and Irish Seas, and the English Channel. Most of the rest is in two demonstration projects off China’s east coast. However, there are also great expectations placed for major deployment elsewhere; governments and companies in Japan, Korea, the United States, Canada, Taiwan and even India have shown enthusiasm for developing offshore in their waters. According to the more ambitious projections, a total of 80 GW offshore wind could be installed by 2020 worldwide, with three quarters of this in Europe.  

Why the great attraction to offshore wind when onshore wind is now directly competitive with conventional energy sources in an increasing number of markets around the world? Offshore wind has a number of advantages, such as higher wind speeds and less turbulence than on land and fewer environmental constraints. Offshore is particularly suitable for large scale development near the major demand centers represented by the major port cities of the world, avoiding the need for long transmission lines to get the power to demand centers, as is so often the case onshore. Offshore is a relatively new technology with significant opportunities for cost reduction, technical innovations and ‘revolutionary’ developments which may change the face of renewables in some parts of the world.

Europe leading the way

A total of 4,336[2] MW consisting of 1,503 offshore wind turbines are fully grid connected in 56 wind farms across ten European countries.  The UK and Denmark remain the two biggest markets for offshore wind in Europe, followed by Belgium, the Netherlands, Germany, Sweden, Finland and Ireland.  Norway and Portugal each have a full-scale floating turbine.

Offshore wind is an essential component of Europe’s binding target to source 20 % of final energy consumption from renewables. Currently, almost 6 GW of offshore wind capacity is under construction in Europe, 17 GW has been consented, and there are plans for further 114 GW. Europe is expected to install 16.2 GW of offshore wind capacity over the next four years, the majority in the North Sea. The UK alone is expected to deploy up to 18 GW of offshore wind capacity by 2020 according to the Renewable Energy Roadmap published by the UK government. The Crown Estate has even more ambitious figures with close to 32 GW installed offshore wind capacity by 2022. Altogether, Europe is expected to have around 40 GW installed capacity by 2020.

Development slow in China

China’s installed offshore capacity today accounts for 258.4 MW, ranking number three globally. Offshore wind still only provides a tiny share of the total wind capacity in China, accounting for less than 0.5% of the total wind energy installed in the country. The Shanghai Donghai Bridge project, totaling 102MW installed in 2010 is the first commercial offshore project outside Europe. As of the end of 2011, the biggest offshore project in China was the 150 MW demonstration project in Jiangsu Rudong, with 99.3 MW installed and grid connected by the end of 2011. Other installations are all small-scale demonstration projects, including the second phase of the 65.6 MW Shanghai Donghai Bridge project, with 8.6 MW installed in 2011.

China has an ambitious target for offshore development of 5 GW by 2015, and 30 GW by 2020. To reach this goal, China’s offshore development follows a concession tender model, in which both developers and tariffs are determined by a tender. The second round of offshore concession tendering of 2,000 MW was supposed to take place take place in 2011, but has been postponed until 2012, primarily due to planning and siting difficulties faced by the projects tendered in the first round in 2010.

The main cause for the delays with China’s offshore plans is lack of coordination between state administrations. The exploration of wind energy at sea seems to conflict with some other marine economic businesses and two governmental bodies (National Energy Administration and State Oceanic Administration) in charge of offshore wind power development. A cohesive national plan for the offshore industry is necessary for long term development. If the coordination is improved, Chinese offshore is likely to see quite some progress in the coming years.

Nevertheless, in the meantime, “demonstration projects” are being approved and built. In the beginning, these demonstration projects were always of small size, consisting of several turbines with a total maximum capacity of 20-30 MW. But last year, the Rudong project (150 MW) was approved and labeled as a “demonstration project”. The demonstration projects enjoy a favorable tariff, not the notoriously low tariff resulting from the bidding. Therefore, when compared to concession projects, the demonstration projects are of a smaller size and a better tariff. This can play a more positive role in testing the water for offshore technology and offshore wind farm management.

The demonstration projects also provide a testing site for new offshore turbines. The Sinovel 5 MW model has its first prototype set up in the second phase of the Dong Hai Bridge project, together with the Shanghai Electric’s 3.6 MW offshore model. The 150 MW Rudong offshore project uses the both jointly produced Siemens-SHE 2.3 MW turbine and the Sinovel 3 MW model. Many other manufacturers are also having their models tested at various demonstration sites.

Floating offshore farms under way in Japan

Because of Japan’s narrow continental shelf, the potential for bottom-mounted North Sea style offshore wind is limited. But major Japanese players are looking to build on the early work in Europe on floating offshore platforms. This spring major announcements were made in relation to four offshore projects, both bottom-mounted and floating with both the spar buoy and semi-submersible options being tested. Mitsubishi has also announced plans for the development of a new 7 MW turbine with a hydraulic drive, designed to operate on semi-submersible floating platforms in deep water off the coast of Fukushima. The first 2.4 MW offshore farm, built east of Tokyo, off the coast of Choshi, will be ready to start in January 2013, and there are already plans to have a second 2 MW wind farm starting next May, to be built off the coast of Kitakyushu, in southwestern Japan.

Japan has the world’s 6th largest Exclusive Economic Zone (EEZ), as well as a very capable maritime industry. Offshore wind power has the potential to contribute significantly to the domestic energy supply, creating a new industry in Japan and helping to reduce the country’s reliance on nuclear power.

Korea speeding up with offshore development

The Korean government released a roadmap for offshore wind development in 2010, with the first priority a 2.5 GW offshore wind farm project located in the West-South Sea. In addition, a master plan identifying three stages for further offshore development was published by a specially designated task force. The first stage calls for eight domestic manufacturers to deliver a total of 15 prototype turbines totaling 80 MW to a test bed facility for testing and certification, which should be finalised by 2014; the second stage will consist of a 400 MW demonstration project scheduled to be operational by 2016; and the final 2,000 MW project will be tendered out from 2017-2019, and will be open to all bidders.

Now the Korean government is however speeding up the process and has announced that the construction of a 100 MW offshore test bed in Yeonggwang County in South Jeolla Province will be completed in June next year, a year earlier than the initial schedule. The existing test beds in Kim-nyeong on Jeju Island will undergo expansion to allow a test run of 5-7 MW turbines. The Korean government plans to also enlarge the test beds in Kim-nyeong to test two 7 MW turbines. A mid- and long-term offshore wind power development roadmap is planned to be released in the first half of 2013.  

Higher costs as a main challenge

Today the major challenge for offshore wind is to continue to bring down costs. Selection of sites in deeper waters, further from shore, with more difficult bottom conditions and higher waves, have all contributed to driving the costs up faster than the improvements in the technology has been able to drive them down. Construction costs, measures to protect machinery and external surfaces from salt spray, electrical cabling and grid connection are also more expensive, while the higher wind speeds necessitate the use of more robust wind turbines. The need for appropriate vessels also increases operation and maintenance costs. 

On the technology side, cost reductions continue to be achieved, and this is one of the main reasons for confidence regarding offshore wind. The cost of energy from offshore wind will come down substantially as the mass roll-out of the next generation of offshore wind turbines begins to take place.   

 

[1] Installed globally by 30 June 2012.

[2] As of 30 June 2012.