Transcript How Can Offshore Wind Contribute To The European Energy

How Can Offshore Wind Contribute To The
European Energy Portfolio?
Uffe Vinther Schou, Sales Director, Vestas Offshore A/S
vestas.com
Content
• Introduction to Vestas Wind Systems and Vestas Offshore A/S
• Future expectations to the European offshore wind market
• Offshore wind drivers
• Offshore wind barriers
• Future offshore trends and challenges
• Recommendations for the support of offshore wind
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Facts
Vestas Wind Systems:
• Employed 21,000 people by the end of 2008
• Delivered 6,000 MW
• Target: Manufacture, ship and install 10,000 MW in 2010
Vestas Offshore:
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Global headquarters in Denmark
Independent business unit since 2006
Offshore focus only
Sales, construction and O&M
Offices in DK, UK and NL – more to come
Has grown from 50 to 400 employees in 4 years
“People before MW”:
• No specific allotment of turbines for offshore projects
• I.e. no restrictions to no. of MW!
• Need people before ramping up on projects
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Vestas Offshore – Track Record
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Future Expectations to the European Offshore Wind Market
Offshore wind will gain a higher share of the total European wind portfolio
The European offshore wind market will grow at a steady pace – faster than on
shore
• Main future markets:
• UK (~20GW by 2020) and
• Germany (~17GW by 2020)
• Additional focal markets:
• North Sea and Baltic Sea
• Emerging markets:
• Mediterranean,
• China/ASP,
• US/Canada
Third-blade installation, V90-3 MW Robin Rigg, UK
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Two Main Drivers for Offshore Wind
Political Support:
• Political support for offshore wind has never been better!
• The European Commission:
• Proposal to invest € 3.5 billion in energy in 2009-2010
• €500 million earmarked for offshore wind
• National initiatives (examples):
• UK renewable legislation package
• Increased German offshore tariff
• National credit agencies backing large infrastructural projects,
e.g. offshore wind
Committed Customers:
• Improved cooperation and learning
• Improved organizational skills
• Are earmarking capital specifically for offshore wind
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V80-2.0 MW, Q7, The Netherlands
Barriers to Offshore Wind
Financial crisis
• The credit crunch will leave a stronger and more
stable industry
• Prices will stagnate or even decrease
Legislation and political framework
• Lack of effective, tangible support mechanisms
• Long, complex and uncertain permitting procedures
Resources
• Lack of people, knowledge and skill sets
Supply chain elements
• Long lead times and supply shortage for
components, cabling, etc.
• Lack of suitable installation harbours
• Lack of installation vessels
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V90 Turbine
Current and Future Challenges for the Offshore Wind Industry
Moving further up the learning curve
• Benefit from previous experience – implement
Lessons Learned
• Increased efficiency (design, construction)
• Development of new ideas, methods, tools etc.
Investment in innovation/infra structure
• Installation vessels, production facilities, harbour areas
Attraction of new players to enter the market
• Mitigate bottle necks
• Increase competition
Industrialisation and standardisation of
products and methods
• Increased efficiency, cost-effectiveness and speed
Attracting qualified and experienced staff
• Staff will continue to be the bottleneck
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V90-3 MW, Robin Rigg, UK
Looking Towards Future Trends in the Offshore Industry
Cost of Energy (CoE)
• A narrowing gap between CoE for onshore and offshore wind
• Total CoE more important than MW rating
• More reliable and robust WTG’s.
• The industry will mature and move up the learning curve
V90-3.0 MW, Kentish Flats, UK
Health and Safety
• Safety is key when going offshore.
• Industrial injuries down by 47% since 2005 in Vestas.
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Recommendations for the support of offshore wind
Sustainable market:
• Clear, well defined and short permitting process
• Committed targets
• Transparent development process:
• Political priorities – Radar, marine traffic, defence, aviation etc.
• Infra structure:
• Onshore grid connection capacity (e.g. UK and Germany)
• Suitable harbours (UK)
• Economics
• Appropriate subsidy systems and suitable tariff levels (e.g. DK, Sweden)
• Protectionism (local requirements) => sub optimisation
• Attract new players and increase competition
• Industrialise products and methods -> improve efficiency and decrease costs
• Push investments in innovation
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Recommendations for the support of offshore wind
Recommendations to wind farm developers:
• Focus on reducing rather than splitting risk
• Sub contractors must be allowed to make a profit
• Price pressure increases the risk of sub
contractors going into administration
• Offshore wind is competing against offshore oil
and gas for the same suppliers. Only competitive
prices and terms will attract large and
professional players
• Increased staying power enables a move up
learning curve, investments, innovation etc.
Turbine pre-assembly, Ijmuiden, Q7, The Netherlands
• Impose demands on H&S, planning, contingency
plans etc.
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In conclusion
• Offshore wind will gain a higher share of the
total European wind portfolio
• ‘Cost of Energy’ is more important than
turbine size
• Political support is needed to create market
growth and business case certainty
• Certainty attracts more players, enables
innovation, drives industrialisation and
creates learning
• A more professional supply chain is required
to fulfil the potential of offshore wind
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V90-3 MW, Robin Rigg, UK
Thank you for your attention
vestas.com
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