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'We can't pick up that bill' | Cost-loading on OEMs will hurt offshore wind growth: Vestas CTO

ReCharge News|Darius Snieckus |October 20, 2022
Offshore Wind

“To enable the needed massive build-out of offshore wind and to tackle the current energy crisis, it is key for the industry to mature and prepare for scalability and localisation,” he said, speaking to Recharge. “For this to happen, technology developers across the renewable value chain must be able to adapt and capture enough value to reinvest back into building scale and innovation, while not putting further strain on the value chain. Basically, the wind industry must slow down turbine development to speed up the needed offshore rollout.”


After a decade of unprecedented market expansion, turbine-makers need to 'focus on optimising existing technology to be able to speed-up and scale-up', Anders Nielsen tells Recharge

The Olympian, industry-building drive in the international wind sector that has led to a scaling up of turbines to current 15MW-plus models could be undercut as cost-pressured manufacturers find they can’t “capture enough value to reinvest back” into technology development for the future, the CTO of Danish OEM Vestas has warned.

Anders Nielsen believes after a decade of unprecedented market growth that turbine-makers need now to “focus on optimising existing product platforms to be able to speed-up and scale-up offshore wind efficiently”, but developers sticking to a “project-view” level strategy are damaging development of a supply chain on the verge of explosive expansion globally.

“To enable the needed massive build-out of offshore wind and to tackle the current energy crisis, it is key for the industry to mature and prepare for ... more [truncated due to possible copyright]

     

After a decade of unprecedented market expansion, turbine-makers need to 'focus on optimising existing technology to be able to speed-up and scale-up', Anders Nielsen tells Recharge

The Olympian, industry-building drive in the international wind sector that has led to a scaling up of turbines to current 15MW-plus models could be undercut as cost-pressured manufacturers find they can’t “capture enough value to reinvest back” into technology development for the future, the CTO of Danish OEM Vestas has warned.

Anders Nielsen believes after a decade of unprecedented market growth that turbine-makers need now to “focus on optimising existing product platforms to be able to speed-up and scale-up offshore wind efficiently”, but developers sticking to a “project-view” level strategy are damaging development of a supply chain on the verge of explosive expansion globally.

“To enable the needed massive build-out of offshore wind and to tackle the current energy crisis, it is key for the industry to mature and prepare for scalability and localisation,” he said, speaking to Recharge.

“For this to happen, technology developers across the renewable value chain must be able to adapt and capture enough value to reinvest back into building scale and innovation, while not putting further strain on the value chain. Basically, the wind industry must slow down turbine development to speed up the needed offshore rollout.”

He underlined that the rate of scale-up of turbine nameplate in the past decade had been forecast-defying, saying: “Who can offer a [useful] perspective on what technologies we can deliver in 2030? If you had asked me eight years ago what our products would look like in 2022, its probable I would have got my guess wrong.”

“We as an industry need to find ways of factoring in this uncertainty, in the partnership between customers and suppliers and OEMs, to make the transition in a forward-looking way.”

Vestas has been upsizing both its onshore and offshore designs in recent years, in 2019 launching its EnVentus turbine concept, a module-based design engineered to be scaled from 5MW onshore machines to its top-of-the-line ocean-going turbine, the 15MW V236, now on order for projects including Red Rock’s 1.1GW Inch Cape off Scotland, Northland Power’s unnamed flagship 1.2GW array in the Polish Baltic, and the 1.5GW development planned by EDF-Shell via its Atlantic Shores venture off the east coast of the US.

“Look, we have built the prototypes. We will have the [V236] up and spinning by the end of the year. And that’s a huge milestone. We launched two years ago and to the industry its ‘done’ [even though Vestas hasn’t installed or operated one of the units offshore]. It’s not though, not for us, not for our competitors,” Nielsen said, pointing to Siemens Gamesa and GE, which both have 15MW models heading for market.

“The problem is: if you have a project view, then you as a developer go to the OEMs to optimise that project – and in some instances there is a clear case for bigger turbine. But with the world’s offshore business made up of eleven or 12 major developers, once a decision is taken [to do so], then that [size of machine] becomes the new standard,” he added.

“And [for a turbine maker] that doesn’t come without great [technology development] effort and a great deal of time.”

Nielsen argues the discussion needs to come back to the key question, “What is the responsible way to drive sustainable growth in offshore?” And, he believes, decelerating technology development cycles will be a key part of the answer.

“This doesn’t mean we will sit-by and wait for the world to move on. We will still be very much in the [innovation] game. But what our customers are starting to understand is that this will drive up prices on the turbine.

“Developers positioning themselves for growth are going out and buying seabed leases at very high [auction] prices. And then they seem to be hoping to compensate for this on the projects themselves by asking for bigger turbines and [so achieve a] lower LCOE [levellised cost of energy],” he said. “But [the OEMs] will not be able to pick up that bill.”

Sustainability hand-in-hand with economic development potential must be a big part of the equation in deploying offshore wind power internationally, reckons Nielsen. “I think you have to look at this from the portfolio-level and ask, ‘What is going to happen in the next five to ten years – and what will it take to see [offshore wind build-out most successfully]?’.

“And this needs a shared business and industrial perspective that’s, not just the OEMs or just the customers or just the buyers,” he said.

Market-tailored turbine orders

Much as the ultra-large-scale machines now heading out of harbour for megaprojects in Europe’s northern seas and in the US Atlantic have underpinned the rapid expansion of the offshore wind sector, they will not have universal uptake, notes Nielsen.

“Not all project sites demand a ‘bigger’ turbine. We see a lot of push in southeast Asia, for instance, where you are looking at different wind speeds and different offshore conditions [from northern Europe],” he noted. “So, if you go in with the biggest model you have, it will be underutilised once in operation and its capacity factor will be lower.

“We need to be configuring our turbines for the sites [they are installed on]. It is really part of the industrialisation ahead in the sector,” he added.

The higher-level industrialisation picture – a sector that has grown from installing 5GW a year to 50GW and aims to have 2TW turning by mid-century – must be kept front of mind as this expansion of plant capacity is shepherded forward, says Nielsen.

“That is ten-fold [market] growth – and we have to build faster! And it’s ten-fold growth in very big pieces of equipment [ie wind turbines and their componentry] and very large capex [capital expenditure] behind that. But I think more and more people are seeing this as a failure [in waiting]. Though it [is positive that it] is an open discussion.”

Construction of the world’s offshore wind fleet ramped up almost four-fold in the first half of the year compared to 2021, according to latest calculations from the World Forum Offshore Wind, with China accounting for 75% of global installations as total operational sea-based plant closed in on 55GW.

Content truncated due to possible copyright. Use source link for full article.


Source:https://www.rechargenews.com/…

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