Offshore Wind Tech Being Tested

China Ming Yang Wind Power Group Limited’s super compact drive (“SCD”) offshore wind turbine prototype of 6.5MW platform has begun a commercial trial operation in Rudong,Jiangsu Province, China. The 5 -7 MW wind turbine prototype features a two-blade design with a light weight permanent magnet generator and is able to adapt to various extreme offshore weather conditions, offering high reliability at a lower weight to offshore wind farm operators, particularly in typhoon-prone regions.

dreamstimefree_100632“We are proud to see that the world’s first SCD offshore wind turbine prototype of 6.5MW platform has beenconnected to the grid and put into trial operation,” said Chuanwei Zhang, Chairman and Chief Executive Officer of Ming Yang. “Our unique model provides our customers with a cost-effective solution for their offshore wind farm projects in typhoon-prone coastal areas where extreme weather conditions prevail, for example the eastern and southern coast of China, potentially one of the world’s largest offshore markets.”

Zhang added, “Meanwhile, I am also pleased to announce that in response to our customers needs and to meet China’s complex offshore conditions, Ming Yang is planning to develop an innovative three-blade SCD wind turbine model, specializing in catching low speed wind. We expect that we will be able to seize the huge market opportunities by providing a wider product mix as well as value-added services, as the PRC government continues to push for renewable energy solutions in an effort to combat air pollution.”

Offshore Wind Can Compete With Fossils in Decade

A new study, “Offshore Wind in Europe: Walking the tightrope to success,” finds that the European offshore wind energy industry can compete with coal and natural gas by 2023. The Ernst & Young (EY) reports states that for this to occur, however, the industry must significantly reduce costs over the next five years.

EY Report Offshore wind in EuropeCost savings can be achieved in several ways including deploying larger turbines to increase energy capture (9%); fostering competition between industrial players (7%); commissioning new projects (7%); and tackling challenges in the supply chain such as construction facilities and installation equipment (3%). These actions, coupled with strong, long-term regulation will enable offshore wind energy to compete.

Parallel to release of the report, three of the biggest names in offshore wind have initiated a joint declaration – called ‘United Industry‘ – as part of a commitment to reducing costs in the sector. Dong Energy, MHI Vestas and Siemens Wind Power and Renewables have pledged to undertake joint and individual actions across the whole of the value chain to deliver “major long-term and tangible advancements.”

Michael Hannibal, CEO Offshore of Siemens Wind Power and Renewables, said, “Cost reduction remains a top priority of the offshore wind industry. We need to create profitable investments for offshore projects independent of subsidies. In a united industry, all stakeholders across the whole value chain are equally responsible to contribute and deliver. Siemens takes full ownership of this challenge. If we all do that, we will win.” Continue reading

Alstom Announces Deepwater Wind Will Proceed

The Deepwater Wind Block Island project will be proceeding. Alstom, the company that will provide five Haliade 150 6MW offshore wind turbines, said they have received formal notice to proceed from the developers of the project with the announcement that the project is now fully financed. The Haliade operates without any gearbox (using direct-drive), due to its permanent-magnet generator.

44504-HiRes-Haliade1506MWOffshorewindturbineerectedinLeCarnetFrance-IMG0035P“This is a major milestone and the confirmation that this project, the first commercial offshore project in the United States for Alstom, will now materialize, ” said Yves Rannou, senior vice president wind for Alstom.

Alstom will supply, install and commission the five Haliade 150 turbines for the project and provide 15 years of operations and maintenance support. The turbines, capable of producing approximately 125,000 MWh of electricity annually, will provide about 90 percent of Block Island’s power needs.

Anders Soe-Jensen, vice president of Alstom Wind Offshore added, “Securing final financing for this ambitious project is an exceptional achievement for Deepwater Wind. We believe this project will highlight both the commercial and technological viability of offshore wind in the US and we are proud to be part of the team making it happen. This is the start of a new chapter in sustainable energy for the US.”

Wind turbine, foundation and electrical interface engineering is advancing on schedule to meet Deepwater Wind’s project specifications, including installation of the five foundations during summer 2015. Located about three miles off the coast of Block Island, Rhode Island, the Block Island Wind Farm is scheduled for commercial service in the fourth quarter of 2016.

Report: Offshore Wind Policy Not Working

According to a new report fueled by concerns that the Cape Wind project may never see fruition, U.S. offshore wind policy is not working. “In Up in the Air: What the Northeast States Should Do Together on Offshore Wind, Before It’s Too Late,” published by Clean Energy Group (CEG) and Navigant Consulting, tells the story of how the Cape Wind project is struggling against a decade of opposition. The report concludes the project’s difficulties highlight a larger policy problem—it is almost impossible for a single state to jump start the entire U.S. offshore wind industry.

Up in the AirThe report recommends a multi-state collaboration among states to create stronger and consistent regional policies, financing actions and permitting across the Northeast states.

“Cape Wind was a battle of the wallets, and the fossil fuel wallet evidently won,” said Lewis Milford, president of Clean Energy Group and the lead author of the report. “But there is a larger and more important story behind this controversy. If Northeast states want to reduce the costs of these projects and create offshore wind jobs, they must develop clear and consistent policies across the region, to give developers good reason to build projects here. If they don’t act together soon, they will lose this clean energy resource for decades to come, which will be bad for the economy and the environment.”

The paper recommends the states consider seven multi-state policy areas for regional action.

  1. Regional Offshore Wind Target. The establishment of a practical regional target (or target range) for offshore wind capacity would produce meaningful economic development and environmental benefits by creating a clear demand signal to developers.
  2. Coordinated Policy Incentives. Individual state policy drivers, including any incentives for developers, should be consistent across the region to drive demand and produce cost reductions over time through scale up of the offshore wind resource.
  3. Financing. States should develop new, regional financing mechanisms for regional and single projects, including use of bonds and green bank financing.
  4. Procurement. States should jointly procure power from one or more large offshore wind projects to reduce costs and create a reliable pipeline of demand for project developers.
  5. Economic Development. Coordinated, multi-state, economic development strategies rather than purely competitive action would spur economic development activity in the region through the creation of clean energy jobs and potentially new manufacturing facilities.
  6. Transmission. States should develop joint public funding of regional transmission and interconnection facilities associated with regional projects.
  7. Permitting. It is essential to the success of the multi-state projects that the policies ultimately adopted for permitting these facilities be standardized.

Continue reading

Offshore Wind Installations Stable

The European offshore wind industry has stabilized with new capacity installations declining by 84 MW in 2014 as compared to 2013 according to the new report, “The European offshore wind industry-key trends and statistics 2014“. During 2014, 408 new offshore turbines were fully grid connected, adding 1,483 MW to the European system. The total installed capacity for Europe now stands at 8,045MW in 74 offshore wind farms in 11 European countries.

Justin Wilkes, deputy chief executive officer of the European Wind Energy Association, said, “It is not surprising that we see a levelling-off of installations in 2014 following a record year in 2013. The industry has seen exponential growth in the early part of this decade and this is a natural stabilising of that progress. Offshore wind will have a monumental part to play in the EU’s energy security drive as part of the European Energy Union but it EU offshore wind industry trends 2014 EWEAis political determination that will help Europe unlock its offshore wind potential.”

Wilkes noted that the technology and financing are there but long-term policy support is not. This is needed to to avoid the stop-go growth the offshore wind industry has been experiencing.

In 2014, the UK accounted for over half of all new installations (54.8%) with Germany in second (35.7%) and Belgium (9.5%) making up the rest. But for 2015, Germany is expected to install more offshore capacity than the UK, which has dominated installations in Europe for the past three years. The largest wind farms to be fully completed will be RWE’s Gwynt y Mor (576MW) in North Wales followed by Global Tech 1 (400MW) in the German North Sea.

Wilkes added, “Germany is set to buck the trend this year. The UK has more installed offshore capacity than the rest of the world combined but this year shows that other countries in the EU are making serious investments in the sector. The nine financial deals closed in 2014, of which 4 were “billion-Euro” projects, suggest that activity will pick up substantially as of 2017 as these projects begin to hit the water.”

Clean Energy Investments Jump

According to Bloomberg New Energy Finance (BNEF), clean energy investment rose for the first time in three years in 2014. New funds for wind, solar, biofuels and other low-carbon energy technologies gained 16 percent to $310 billion last year. It was the first growth since 2011, erasing the impact of lower solar-panel prices and falling subsides in the U.S. and Europe that hurt the industry in previous years.

The study reported that clean energy benefited from a number of trends that will be difficult to replicate in 2015. For example, with China’s commitment to renewables, funding increased 32 percent. In addition, a record $19.4 billion was committed to offshore wind projects during the year.

BNEF Trends in Renewable Energy ReportThe industry benefited from a number of trends that will be challenging to replicate this year. Funding surged because of a 32 percent expansion in China’s commitment to renewables, as well as a record $19.4 billion committed to offshore wind projects that were years in the making. And prior to the major drop in gas prices, investments were on the rise for electric vehicle development.

“Healthy investment in clean energy may surprise some commentators, who have been predicting trouble for renewables as a result of the oil price collapse,” said Michael Liebreich, chairman of the advisory board of the London-based researcher. “Our answer is that 2014 was too early to see any noticeable effect on investment. The impact of cheaper crude will be felt much more in road transport than in electricity generation.”

However, the BNEF, there may be trouble on the horizon for electric cars and offshore wind but even with lower oil prices, they predict installations for solar and wind power to grow about 10 percent in 2015. BNEF says the findings ease concerns that the oil price rout that began in the middle of last year would lead to a sharp reduction in funds for low-carbon energy, which is more costly than fossil fuels.

“This increase in renewable energy investment demonstrates the resilience of the sector in the face of tumbling oil prices,” said Ben Warren, head of environmental finance at the consulting firm EY. “This trend is set to continue as technology around renewables becomes more affordable. The increasing role that renewable energy plays in emerging markets will also help ensure sustainable growth for the sector.”

 

Alstom Opens Wind Turbine Production Plant

Alstom has opened its first offshore wind turbine production plants in Saint-Nazaire, France. On hand for an inauguration event was French Prime Minister Manuel Valls, Alstom Chairman and Managing Director Patrick Kron and Alstom Renewable Power Chairman Jérôme Pécresse. The new facilities will manufacture nacelles and generators for the Haliade 150-6MW turbines while the towers and blades will be made in the Alstom plants in Cherbourg. The plants will produce, on average, 100 machines per day and will be fully operational in early 2015. Delivery is expected to begin during the first quarter and includes 5 turbines intended for the Block Island wind farm in the U.S.

Batiment Alstom a MontoirThe plants in Saint-Nazaire will also be assembling the 238 offshore turbines that are planned to equip the three facilities installed by EDF, the exclusive partner of Alstom on the French market, in Saint-Nazaire, Courseulles-sur-Mer and Fécamp starting in 2017.

“The inauguration of the Saint-Nazaire facility represents a milestone in Alstom’s story and in the country’s own industrial history,” said Kron. “These new plants are France’s first offshore wind turbine production factories. Thanks to them, we shall now be in a position to serve the French market as well as to meet a growing international demand.”

The Haliade 150-6MW wind turbine is designed for a marine setting. Thanks to a rotor exceeding 150 metres in diameter, the turbine’s yield is 15% higher than that of other same-generation wind turbines according to Alstom. With 6 MW of power.

Pécresse added, “Through the construction of those new plants, Alstom is upholding its determination to be one of the leaders in a French industrial sector of excellence devoted to renewable energy, and to ensure the sustainability of a Renewable Ocean Energy industry intended to claim an early position in a global market, by involving all our partners.”

Massachusetts Offshore Wind Auction Announced

The Department of Interior’s Secretary Sally Jewell along with Massachusetts Governor Deval Patrick and Bureau of Ocean Energy Management (BOEM) Acting Director Walter Cruickshank have announced that more than 742,000 acres of offshore Massachusetts will be offered for commercial wind energy development. The auction will take place on January 29, 2015.

“Thanks to the leadership of Governor Patrick and the Commonwealth of Massachusetts and the hard work of BOEM staff members, this will be our largest competitive lease sale to date for offshore wind energy development,” said Jewell. “This sale will triple the amount of federal offshore acreage available for commercial-scale wind energy projects, bringing Massachusetts to the forefront of our nation’s new energy frontier.”

MASS offshore wind auction areaAccording to an analysis prepared by the U.S. Department of Energy’s National Renewable Energy Laboratory, if fully developed, the area being offered could support between 4 and 5 gigawatts of commercial wind generation. Twelve companies have qualified to participate in the auction for the Massachusetts Wind Energy Area.

“Over the past five years, the Commonwealth has worked with its federal, state, tribal, industry and community partners to put the infrastructure and planning pieces in place to make Massachusetts the launch pad for the U.S. offshore wind industry,” said Governor Patrick. “This offshore wind energy area not only has the capacity to generate enough electricity to power half the homes in Massachusetts, but it will create local jobs and a renewable and home-grown source of power.”

The Massachusetts Wind Energy Area starts about 12 nautical miles offshore. From its northern boundary, the area extends 33 nautical miles southward and has an east/west extent of approximately 47 nautical miles. Under the terms of the Final Sale Notice, which will be published in the Federal Register on November 26, 2014, the Massachusetts Wind Energy Area will be auctioned as four leases: Lease OCS-A 0500 (187,523 acres), Lease OCS-A 0501 (166,886 acres), Lease OCS-A 0502 (248,015 acres), and Lease OCS-A 0503 (140,554 acres).

Iberdrola Opens West of Duddon Sands Wind Farm

ScottishPower Renewables, Iberdrola USA’s sister company, has opened its first offshore wind farm, West of Duddon Sands, a 389 MW facility located in the Irish Sea. The $2.6 billion project, located approximately 12.5 miles off the seaport of Barrow-in-Furness in North West England, was completed in conjunction with Dong Energy of Denmark.

“West of Duddon Sands is the first offshore wind farm in the U.K. to use such advanced construction methods,” said Ignacio Galan, Iberdrola chairman during a grand opening ceremony. “The combination of two highly sophisticated installation vessels working in tandem, and the support of the excellent fabrication facilities at Belfast, Northern Ireland, made this one of the most efficient offshore projects ever delivered in the U.K.”

West of Duddon Sands offshore wind farmThe wind farm consists of 108 Siemens turbines that are connected through a 125-mile web of undersea cable in a 26 square mile area of the Irish Sea. The wind farm will produce enough energy to meet the annual electricity demands of nearly 200,000 homes.

“Building the West of Duddon Sands wind farm was a significant engineering challenge,” said Bob Kump, chief corporate officer of Iberdrola USA. “There is value in the achievement beyond the immediate benefits of this project. We will share the knowledge we gained among Iberdrola companies like ours and throughout the industry to help advance the technology and cost competitiveness of future offshore wind projects.”

According to Iberdrola, two big offshore wind energy innovations helped reduce the cost of the project:

  • A new $80 million, custom-designed offshore wind terminal built at Belfast Harbor. The terminal employs up to 300 workers and can operate around the clock for continual delivery of turbine and foundation components to the farm.
  • Two of the world’s largest and most advanced installation vessels: Pacific Orca and Sea Installer. Using the two vessels in tandem enabled construction crews to install all the foundations and turbine components during one of the most stormy winters in recent history.

Energy generated by the project connects to an offshore substation that boosts the voltage then routes it through two export cables to the onshore substation at Heysham where it enters the U.K. national grid.

EU Leaders Lack Climate & Energy Leadership

According to several organizations, although European Union Heads of State agreed upon a climate and energy framework, it fails to provide industrial leadership for Europe. Both Ocean Energy Europe (OEE) and the European Wind Energy Association (EWEA) criticized the plan. OEE said the new greenhouse gas emission targets, renewable energy and energy efficiency will do little to capitalize on the security, employment and export potential of new energy sectors including ocean, wind and offshore wind energy. The groups argue the framework put Europe’s future energy security and the country’s position as a global renewable energy and climate leader at risk.

The European Council agreed to a 40 percent binding greenhouse gas emission reduction target, a 27 percent binding, EU-wide renewable energy target, and a 27 percent non-binding, EU-wide energy efficiency target.

Ocean Energy Photo ENE“If the EU is serious about tackling big issues such as energy security, unemployment and climate change, it needs to provide industrial leadership on climate and energy by setting hard and fast targets and reduce its exposure to highly volatile fossil fuel imports,” said Dr Sian George, CEO of Ocean Energy Europe. “Economies across the world will have to transition to low-carbon. By staying ahead of this curve, Europe can tap into massive export and job creation potential. This is as true for the first generation of renewable energy as it will be for the next generations, such as ocean energy technologies.”

In 2009, Europe agreed to climate and energy targets for 2020 helping to bring first-gen renewable energy industries to market in part due to market certainty. The new targets need to be higher, said George, for renewables to move into second generation renewable energy technologies.

Thomas Becker, chief executive officer of the European Wind Energy Association, said the lower unenforceable targets create market uncertainty and for the wind industry this “clarity” is critical to investors who rely on long-term policies to provide stability.

“The interconnectivity target is bewildering given the current political challenges Europe is facing. We’re in the midst of an energy crisis with Russia holding Member States to ransom over gas supplies,” said Becker. “Yet Heads of State see fit to trot out a meaningless target that will do nothing to improve connection in the Iberian Peninsula or the security of supply in the Baltic States, let alone allow an internal energy market to develop. On GHG reduction, this weakens the position of the EU for the climate talks in Paris next year,” added Becker. “I can’t understand how Member States are going to reach this target and who is guaranteeing that this is not just an empty shell. I can assure you that the other climate negotiators are very good at finding the holes in the cheese.”

Mainstream Renewable to Build Offshore Wind Farm

The Scottish Ministers have given Mainstream Renewable Power the go ahead to build a 450 megawatt Neart na Gaoithe (“NnG”) offshore wind farm in the Outer Forth Estuary in the North Sea. This project will be the first large-scale offshore wind farm in Scottish waters to be directly connected to the grid when complete in 2018. The wind farm will provide 3.7 percent of Scotland’s total electricity demand. The wind farm will consist of up to 75 wind turbines and will occupy an area of approximately 80 square kilometres. At its closest point to land it lies over 15 kilometres off the Fife coast in water depths of 45-55 metres.

The subsea cable transmitting the wind farm’s power will come ashore at Thorntonloch Beach in East Lothian from where its Mainstream Renewable Powerunderground cable will travel along a 12.5 kilometre route to a substation located within the Crystal Rig onshore wind farm in the Lammermuir Hills. Grid connection will occur in December 2016 and planning permission for the route of the underground cable was received from East Lothian Council in 2013.

Mainstream Renewable Power’s founder and Chief Executive, Eddie O’Connor said, “Today’s announcement is of particular importance for Scotland because it is the first time a wind farm will be built in Scottish waters with the purpose of supplying Scottish homes and businesses with renewable energy. In fact, it will generate enough green power to supply more than all the homes in Edinburgh.”

NnG represents a capital expenditure investment of around £1.5 billion and is on track to be the first offshore wind farm in the UK to attract true non-recourse project finance at the construction stage. The project has pre-qualified for the Infrastructure UK Treasury Guarantee and European Investment Bank funding.

“This is of major significance to the global offshore wind industry because it is on track to be the first time an offshore wind farm of this scale will be built using project finance alone by a private company,” said Andy Kinsella, COO for Mainstream Renewable Power. “It is testament to the world-leading expertise of Mainstream’s offshore development team who have been working on this project since the company was founded in 2008 and further underpins Mainstream’s position as the world’s leading independent offshore wind developer.”

Onshore Wind Cheaper Than Coal, Gas, Nuclear

According to an Ecofys study commissioned by the European Commission, generating electricity from onshore wind is cheaper than gas, coal and nuclear when externalities are stacked with the levelised cost of energy and subsides. The European Wind Energy Association (EWEA) analyzed the report data and determined that onshore wind has an approximate cost of EUR 105 per megawatt hour (MWh). This is less expensive than gas (up to EUR 164), nuclear (EUR 133) and coal (between EUR 162-233). Offshore wind comes in at EUR 186 and solar photovoltaic (PV) has a cost of around EUR 217 per MWh.

ewea-logoThe total cost of energy production, which factors in externalities such as air quality, climate change and human toxicity among others, shows that coal is more expensive than the highest retail electricity price in the EU. The report puts the figure of external costs of the EU’s energy mix in 2012 at between EUR 150 and EUR 310 billion.

Justin Wilkes, deputy chief executive officer of the European Wind Energy Association, said of the findings, “This report highlights the true cost of Europe’s dependence on fossil fuels. Renewables are regularly denigrated for being too expensive and a drain on the taxpayer. Not only does the Commission’s report show the alarming cost of coal but it also presents onshore wind as both cheaper and more environmentally-friendly.”

EWEA said onshore and offshore wind technologies also have room for significant cost reduction. Coal on the other hand is a fully mature technology and is unlikely to reduce costs any further.

“We are heavily subsidising the dirtiest form of electricity generation while proponents use coal’s supposed affordability as a justification for its continued use,” added Wilkes. “The irony is that coal is the most expensive form of energy in the European Union. This report shows that we should use the 2030 climate and energy package as a foundation for increasing the use of wind energy in Europe to improve our competitiveness, security and environment.”

DNV GL Releases Offshore Wind Manifesto

DNV GL has released its finding of a report, “Offshore wind: a manifesto for cost reduction,” at WindEnergy Hamburg 2014. The offshore wind industry is looking to reduce costs to ensure growth. In response to this need, DNV GL is offering the industry its manifesto for offshore wind cost reduction identifies and quantifies cost reduction opportunities. It also set out a challenge and the company has committed to take action on the issue.

DNV GL Pledges to Help Reduce Offshore Wind Costs by 25%The cost reduction strategies outlined in the manifesto are categorized into three basic types: “Doing it right,” by mitigating risk and increasing certainty; “Doing it better,” by improving the efficiency of existing processes; and “Doing it differently,” by innovating for the future. Working with industry partners, the actions DNV GL commits to in the manifesto have the potential to achieve reductions in the cost of energy of up to 25 percent. According to DNV GL, these savings, combined with trends in other areas such as improved supply chain efficiency, has the potential of delivering a total reduction of 40 percent which is recognized by many stakeholders as the level required to secure the future of the industry.

CEO for DNV GL – Energy, David Walker, said, “This is about securing the future of offshore wind. Achieving cost reduction is about more than just new technology and innovation. It also requires us to get the basics right which means getting people together, assessing the issues in detail and defining best practice. This may be seen as incremental or even unglamorous, but it is exactly what a maturing industry looks like and it is exactly what is required to drive down costs.

“The good news is that we are seeing signs of progress, but we need to do much more as an industry,” added Walker. In this manifesto document, we in DNV GL recognise the role we can play in the cost reduction story – we are committed to helping offshore wind do it right, do it better and do it differently.”

The manifesto document contains 14 specific pledges across a wide range of topics from reducing subsea cable installation risks through to accelerating the commercialization of floating offshore wind technology:

DNV GL Releases Offshore Wind Transmission Guide

DNV GL, together with the Swedish Transmission Research Institute (STRI) and 10 wind industry companies have developed a methodology for technology qualification of offshore High Voltage Direct Current (HVDC) technologies through a joint industry project.

With the development of wind farms further offshore there is an increasing need for long-distance underwater power transmission. The use of HDVC transmission allows power transmission through cables over longer DNV GL offshore wind transmission guidelinesdistances and higher capacities compared to what is feasible when using AC transmission. To date, though, companies have little experience using HVDC transmission technologies and as such, there are no relevant standard, guidelines or recommendations for its successful use.

Peter Vaessen, segment director future transmission grids at DNV GL said of the new guidelines, “Implementation of new technology always introduces uncertainties that imply risk for its developers, manufacturers and end-users. With this technology qualification, we enable our customers to provide the evidence that the technology used will function within the specified limits with an acceptable level of confidence. Customers can ensure that each step is agreed in advance with the technology provider and the buyer, whilst delivering projects on time.”

As a means to manage the technology risks associated with offshore HVDC transmission projects, the new recommended practice is based on DNV GL’s methodology for technology qualification, which has been used extensively for managing technology risks in the oil and gas industry for more than a decade. Technology qualification is a method for providing evidence that technical equipment will function within specified operational limits with an acceptable level of confidence, both for suppliers and buyers of the relevant equipment.

Companies that participated during the testing process included: ABB, Alstom Grid, DONG Energy, Elia, Europacable, Scottish Power, Statkraft, Statnett, Statoil, Svenska Kraftnät and Vattenfall.

Wind Power Growth Surging Where Supported

According to Worldwatch Research Associate Mark Konold and Climate and Energy Intern Xiangyu Wu, double-digit growth continued in the global wind market in 2013. In the latest Vital Signs, the writers state that there are 318 GW of wind capacity online today with 35 GW added in 2013. However, the growth was a significant drop from the average growth rate over the last 10 years (21%). In addition, overall investment declined slightly from $80.9 billion in 2012 to $80.3 billion in 2013.

In 2013, offshore wind capacity continued to see growth as projects became larger and moved into deeper waters. Until recently, deep-water offshore wind has developed on foundations adapted from the oil and gas industry, but deeper waters and harsher weather have become formidable challenges requiring newly designed equipment. Shipbuilders are expanding to make larger vessels to transport bigger equipment and longer and larger subsea cables to more-distant offshore projects.

wind_power_figure_1_0It’s these trends, write the authors, that have kept prices high in recent years. As of early 2014, the levelized cost of energy (LCOE) for offshore wind power-which includes the cost of the plant’s full operational and financial life-was up to nearly $240 per megawatt-hour (MWh). By comparison, the LCOE of onshore wind installations in various regions of the world is under $150 per MWh, having fallen about 15 percent between 2009 and early 2014.

According to the authors, onshore, wind-generated power is becoming more cost-competitive against new coal- or gas-fired plants, even without incentives and support schemes. Over the past few years, capital costs of wind power have decreased because of large technological advances such as larger machines with increased power yield, higher hub height, longer blades, and greater nameplate capacity (which indicates the maximum output of a wind turbine).

Tighter competition among manufacturers continues to drive down capital costs, and the positioning of the world’s top manufacturers continues to shift. The top 10 turbine manufacturers captured nearly 70 percent of the global market in 2013, down from 77 percent the year before.

In addition, the writers found that in an effort to maintain profitability, manufacturers are trying new strategies, such as moving away from just manufacturing turbines. Some companies focus more on project operation and maintenance, which guarantees a steady business even during down seasons and can increase overall value in an increasingly competitive market. Some manufacturers are also turning to outsourcing and flexible manufacturing, which can lower overall costs and protect firms from exchange rate changes, customs duties, and logistical issues associated with shipping large turbines and parts.