Marios Papalexandrou, Mott MacDonald
October 11, 2011 | 21 Comments
Offshore wind is a new market; it has been just two decades since the first commercial installation. The sector was born mainly due to lack of space for the development of large onshore wind projects in the densely populated areas of Western Europe. The market first evolved in Denmark in 1991 with the construction of the Vindeby offshore wind farm. But real market growth came some 10 years later with construction of Middelgrunden, followed by Horns Rev, which became the largest true offshore project, located some 14-20 km offshore with a total installed capacity of 160 MW.
In addition to Denmark, the U.K., Ireland, Sweden, the Netherlands, Belgium, Germany, Japan and China have constructed offshore wind farms over the last decade. Other countries including France, Taiwan, Canada, the U.S., Greece and other European nations are also looking to tap into this resource. The U.K. market began project construction in 2003 and soon took the lion’s share, which it still holds, from Denmark. For the U.K., everything started with Crown Estate’s Round 1 demonstration projects in 13 locations with a total capacity of around 1 GW. Round 1 projects are quite close to shore (less than 10 km) in shallow waters (less than 15 metres), with an average capacity between 60 and 90 MW. Developers at that time were ambitious mid-sized companies, and the largest offshore wind turbine available was 3.6 MW.
Two years later the U.K. Round 2 projects were awarded, including 15 sites with a total capacity of 7 GW that are currently under construction. They have an average capacity between 150 MW and 500 MW in water depths up to 30 meters. The largest turbine commercially available is 6 MW, while the furthest offshore project under construction in the U.K. is 30 km. Today, developers are mainly large utilities. Simultaneously with these large U.K. developments, we see the first offshore wind farms being constructed in Germany — which, together with the U.K., is expected comprise the dominant market for the coming decade.
U.K. Round 3 projects include nine zones with a total capacity of 25 GW, expected to start construction in 2015. They will have an average capacity between 0.5 GW and 1 GW in water depths between 30 and 60 meters, and with distances to shore that may exceed 50 km. Projects of a similar size are also under development in Scottish territorial waters. New turbine manufacturers are expected to enter the market with turbine sizes up to 10 MW, considered state-of-the-art. Today, the UK has approximately 50 percent of the EU’s total installed offshore wind capacity, accounting for 1.5 GW and is expected to expand to more than 5 GW in 2015 — possibly reaching more than 25 GW by 2020.
So, the market is trending quite clearly toward building in deeper waters, further offshore, using larger machines and building many large wind farms. Considering just the U.K. market alone, about 1 GW in installations per year is expected until 2015, and possibly 4 GW each year after 2015.
This rapid expansion in such a short time has led to a number of projects considered prototypes, either because they use new technologies (new turbines, new foundations, new transmission technologies, new installation concepts) or because they move further offshore into deeper waters than ever before. Dealing with these types of projects poses major challenges for the industry. Can the supply chain follow the tremendous expansion rate of offshore wind development? What construction and technology risks are foreseen? Is the hardware there? Is the skilled manpower there?
Offshore wind farms are highly sophisticated projects that need careful planning and risk evaluation before they are implemented. (Source: Mott MacDonald)
Regarding the hardware, there is currently a shortage of vessels to be deployed for offshore foundation and turbine installation, but this shortfall is expected to be addressed by 2012. Most vessels used today originated with the oil and gas industry, but with significant expansion in offshore wind, dedicated installation vessels are now being ordered and built. These vessels can operate in deeper waters and larger weather envelopes, and are able to carry many more turbines and foundations. This minimises transportation cycles to the marshalling harbour and thus decreases installation time.
Supply of export cables, which transfer power to shore, is regarded as a critical item in the project schedule, as there are few cable suppliers and many projects to be connected. ABB, Nexans, Prysmian, NKT and NSW are the key submarine cable suppliers but more onshore cable suppliers are expected to join the market in the near future. For the moment, 132 kV and 150 kV HVAC export cables using XLPE insulation are the dominant types used, but as projects get larger and go further offshore 220 kV HVAC and High Voltage Direct Current (HVDC) cables are expected to be deployed. For a recent project a HVDC export cable was considered because there was no suitable HVAC cable of sufficient capacity available for delivery at the scheduled time. The advantage of HVDC transmission lines is their ability to transfer considerably more power larger distances per cable but at the cost of deploying expensive converter stations. New VSC systems will be used for HVDC links as the long-established current source HVDC systems are not suitable.
Another significant challenge for the market on a per-country basis is the capability of the transmission operator to plan and construct the appropriate infrastructure able to absorb and cope with large offshore wind energy generation. In the case of Germany, for example, the grid operator is responsible for energy transmission from the offshore transformer station to shore. This has created a headache for developers, as project planning is linked to the date of grid connection and involves a third party over which the project company has only limited control. On the other hand, in the long term this will create a transmission system that is well-designed to cope with large offshore projects.
In the U.K. market the developer has been responsible for the electrical infrastructure up to the onshore grid connection point, but the transmission link must be sold to a third party after construction. This system has given developers freedom to plan and implement the first offshore projects, but there have been planning issues in constructing the appropriate infrastructure for Round 3 projects, both for developers (especially regarding the beach landing point and the onshore cable route) and for transmission operators.
Ports and harbours seem to be another bottleneck that can hinder large offshore projects. Germany has invested in major port infrastructures (such as the port of Bremerhaven) in order to cope with the logistical demands of offshore wind expansion. This investment is supported at both state and government levels. But, unlike continental European ports, UK ports are generally privately owned, and thus owners are more cautious about investing in upgrades.
Turbine technology is another key challenge for the market. Until recently, offshore wind was following in the footsteps of onshore wind technology development, with turbines considered as marinised onshore types. There are three turbine suppliers in Europe that own the lion’s share of the market: Vestas, Siemens and REpower. BARD and AREVA Multibrid have recently begun offshore operation, and many more are expected to enter the market, including Gamesa, Alstom, Clipper, Darwind, General Electric, Mitsubishi, 2-B Energy, Nordex, Doosan and others. This multiplicity of new entrants is likely to result in better commercial terms for developers. All of these turbines can be considered state-of-the-art, due either to the technology used or the turbine size upgrade. A rigorous test procedure, together with design built redundancies, is key to offering comfort to potential buyers and their investors. The development of offshore test sites for these turbines is considered very positive for testing their performance before serial production. The final selection of turbines will be a tradeoff between availability, track record and price/guarantees.
Thorough and continuous risk assessment throughout the project’s lifecycle, together with early engagement of market stakeholders, is key to avoiding cost and time overruns.
Regarding skilled manpower, the rapid expansion rate of offshore wind has not been followed by a similar growth rate in trained and skilled personnel. Newcomers face problems, but even experienced players may encounter problems due to a rate and scope of expansion that does not allow for sufficient knowledge transfer.
A platform to share knowledge and experiences in offshore wind, to educate and train, would be a potential solution. A good example on a national level is the U.K.’s National Academy for Skills (Nuclear). Its role is to provide education and training, run events, offer services and develop expertise for the benefit of its members and the industry as a whole. A similar approach to offshore wind could be followed at a European level under the European Wind Energy Association (EWEA). It is promising that offshore oil and gas contracting and consulting companies are getting involved in the offshore wind sector; their experience gained in working in harsh offshore environments can be transferred. But can offshore wind jobs compete with offshore oil and gas in order to get experienced people on board? For the moment this problem seems prohibitive.
Apart from the supply chain challenges that the industry faces, there are a number of risks with which each project has to cope. As offshore wind farm projects are capital-intensive and involve many contractors and interfaces, careful evaluation of construction risks is of paramount importance for a project’s success. There are two key items to be considered when installing offshore: weather conditions and vessel capability. Project completion can be affected because people tend to overestimate equipment capability and underestimate weather in the offshore environment. There are also cases where problems have occurred because the equipment available at the time, rather than the appropriate equipment, was used.
The quality of measured and predicted metocean data (including wind, waves, tide and swell) is key to a good understanding of the real site conditions at the wind farm location. When considering these data, a conservative approach should be taken toward vessel selection and project planning, with contingency plans for weather that is worse than expected, and plans that will allow for float between different contractors’ schedules so that the final project completion date is not affected. Vessels’ operational envelopes should be well understood in connection with the expected metocean conditions in order to ensure that the right tool is used within the planned schedule.
Other construction risks are related to understanding seabed conditions and poor design, especially in relation to cable installation. Although cable work counts for only seven percent of the total capital expenditure of an offshore project, most insurance claims and project delays are linked to the cable installation process. Many offshore projects have failed to achieve the correct burial depth or meet the scheduled installation deadline.
In many wind farms a failure of the connection between the monopile and the transition piece, known as grout, has led to vertical slippage. (Source: Mott MacDonald)
Two issues arose during construction of the Bligh Bank offshore wind farm. Bligh Bank utilises monopile foundations that were transported 46 km offshore, towed by a tug vessel. The monopiles were transported using hydraulic plugs in both ends to keep them sealed and floating. In two cases the monopiles sank due to failure of the hydraulic system in the plugs. A new solution had to be designed, and additional redundancy measures were taken which accounted for more stringent weather restrictions.
Another construction challenge that Bligh Bank faced was the grouting issue on monopile foundations. In many wind farms a failure of the connection between the monopile and the transition piece, known as grout, has led to vertical slippage: the transition piece slips a few millimetres towards the monopile, and this could affect the structural integrity of the foundations. At the time this issue was discovered, the foundations were already fabricated and were being installed. The Bligh Bank team spent considerable effort on a design solution that would cover the project’s lifetime, which has now been certified and implemented.
In both cases neither the project’s schedule nor its commercial viability were affected due to the fast response in managing these unforeseen issues. At the end of 2010 Belwind managed to finish the construction of the furthest offshore wind farm in the world, consisting of 55 turbines, in 15 months, on budget and with no accidents.
Building Success Offshore
So what makes a successful offshore wind project? The most important element is a track record: the involvement of experienced and skilled project managers and contractors. An offshore wind farm developed and constructed under current models is a sophisticated structure with complex interfaces needing strong management. Extensive knowledge of supply chain capabilities and planning interfaces will lead to a good understanding of potential risks. Thorough and continuous risk assessment throughout the project’s lifecycle, together with early engagement of market stakeholders, is key to avoiding cost and time overruns in these multi-million euro projects.
Furthermore, dealing with the multi-contract structure typically used for offshore wind farms requires an experienced and capable construction management team. The Bligh Bank construction management team, for example, was almost identical with the team that worked for the Princess Amalia (formerly Q7) offshore wind farm. This allowed the team to consider the lessons of the past and knowledge gained, while keeping a lessons-learned register. For instance, they implemented an extended quality control and health and safety inspection programme during project construction, which in part led to a project with zero accidents.
Thus, a mix of thoughtful project design, well-defined contractual arrangements and continuous risk management, orchestrated by competent project participants, is key to a project’s success. At the end of the day, that is what defines a good project: a strong and capable management team with the ability to plan and cope with unforeseen situations, collaborate and learn, without making compromises on quality and health and safety aspects.
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