In recent years, offshore renewables have been facing rapid technology cost reductions and significant uptake in various markets. New capacities are emerging elsewhere despite the North Sea and nearby Atlantic Ocean having over 90 percent of global offshore wind installations.
New technologies like floating wind installations are rapidly increasing the economic potential of offshore renewables. The new technology also opens up larger fields to develop compared to the current feasible with fixed-bottom foundations.
The technology development is unleashing huge potentials for deepwater offshore wind energy. The upcoming of new and more floating wind farms is a new development with successful operations in the UK. Countries like Japan who have limited continental platform areas, will significantly benefit from such technology development.
Renewable Wind Performance and Cost
In 2020, the cost of offshore electricity recorded a substantial drop compared to previous years. And with the newly commissioned wind power projects, the prices are expected to drop more before 2022. Electricity from the new offshore wind project is expected to range between USD 0.06kWh to USD 0.10/kWh. That is a considerable decline compared to USD 0.14/kWh recorded in 2017.
More wind farm development, advances in turbine technology, and operation/maintenance are crucial factors pushing offshore wind power costs lower. Additionally, increased developer experience, economies of scale across the value chain, and growing industry maturity are positive pushes to lower electricity prices.
The use of larger turbines will help increase output. IQIP flange clamp tool will help secure large turbines to give maximum yields on capacity factors on the same resource quality. As the technology grows, more turbine sizes are expected to flood the market. That will provide new developing projects over 50% capacity factor by 2022.
The Rise of Market Competition
The advancing of offshore wind turbine technology, new wind farm development, and operation/maintenance are significantly helping push down the energy cost derived from offshore wind farms. As mentioned earlier, few factors are leading to an improving and competitive market. They include:
- Increased developer experience
- Increased industrial maturity
- Economies of scale across the value chain
However, cost reductions have seen extensive technology improvements for offshore wind farms. In contrast to that, the capacity factors have risen and declining installation costs, risk on the cost of capital, operation, and maintenance cost. Despite having more new farm installations, there is the need for quicker growth.
Developing wind turbine technologies, floating wind foundations, installation, operation, and system integration has led to moving farther from the shore and into deeper waters with reach sites having better wind resources. In contrast to a few years ago, the new norm of turbine installation in deeper waters goes as much as 40 meters deep and over 80 kilometers offshore.
Having the floating foundations offset the offshore wind developers with more opportunities like:
- Accessing deeper waters of about 50 meters
- Easy turbine set up
Despite the operation not being well acquired by the commercial market, there are fully functional prototypes of floating wind turbines. They have been in operation for several years producing a full capacity of 30mw in Hywind Scotland wind farm.