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TKI Wind op Zee Offshore Wind Supply Chain Assessment Auteur: Oscar Fitch Roy, Paul Reynolds, Jules Clayton GL Garrad Hassan Nederland B.V. Versie: Final / Published Datum: 20140131


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Inhoud EXECUTIVE SUMMARY ............................................................................................................... 5

1 Introduction ......................................................................................................................... 6

1.1 Methodology and approach to analysis .................................................................. 6

1.2 Data sources ......................................................................................................... 7 1.2.1 The Netherlands’ offshore wind programme ........................................................................ 7

2 Task 1 – Demand Projection ................................................................................................. 9

2.1 Offshore wind capacity projections ........................................................................ 9 2.1.1 Demand for capital items -‐ Europe ...................................................................................... 9 2.1.2 Demand for capital items – outside of Europe ................................................................... 10 2.1.3 Demand for operations goods and services ....................................................................... 11

2.2 Impacts of water depth and distance from shore .................................................. 12 2.2.1 Water depth ...................................................................................................................... 12 2.2.2 Distance from shore .......................................................................................................... 12

3 Task 2: Qualitiative supply Chain Assessment .................................................................... 14

3.1 Pre-‐construction development and design work ................................................... 14

3.2 Wind turbines ..................................................................................................... 16 3.2.1 Turbine assembly .............................................................................................................. 16 3.2.2 Turbine blades ................................................................................................................... 17 3.2.3 Castings and forgings ......................................................................................................... 19 3.2.4 Gearbox and generators .................................................................................................... 21 3.2.5 Towers .............................................................................................................................. 23

3.3 Electricals ........................................................................................................... 24 3.3.1 Export cables ..................................................................................................................... 24 3.3.2 Array cables ....................................................................................................................... 26 3.3.3 AC offshore substation ...................................................................................................... 27 3.3.4 DC offshore substation ...................................................................................................... 28

3.4 Foundations ........................................................................................................ 30 3.4.1 Monopiles ......................................................................................................................... 30 3.4.2 Jacket foundations ............................................................................................................ 32 3.4.3 Gravity base concrete foundations .................................................................................... 33

3.5 Construction vessels and infrastructure ................................................................ 35 3.5.1 Turbine installation vessels ................................................................................................ 35 3.5.2 Foundation installation vessels .......................................................................................... 37 3.5.3 Cable installation vessels ................................................................................................... 38 3.5.4 Ports ................................................................................................................................. 39

3.6 Operations and maintenance ............................................................................... 41 3.6.1 Personnel transfer vessels ................................................................................................. 41 3.6.2 Operations and maintenance technicians .......................................................................... 43

3.7 Summary of Global supply chain assessment ........................................................ 44

4 IMplications for the Netherlands offshore wind build-‐out .................................................. 45


4.1 Turbine assembly ................................................................................................ 45

4.2 Export cables ...................................................................................................... 46

4.3 DC offshore electrical systems ............................................................................. 47

4.4 Jacket foundations .............................................................................................. 47

4.5 Foundation installation vessels ............................................................................ 48

5 Conclusions ........................................................................................................................ 49


EXECUTIVE SUMMARY The recent signing of the Energieakkoord has provided a major boost to the Dutch offshore wind sector with a coalition of Government, industry and academia coming together and committing to deliver 4450GW of offshore wind by 2023, including an additional 3450MW of new capacity. To ensure that this new capacity can be delivered effectively, this report provides a qualitative review of supply chain capacity, with a particular focus on whether the supply chain will be a bottleneck for Dutch offshore wind projects. As Table 1 shows, across Europe there are a number of areas of concern, most notably in the provision of HVDC systems, but also in the foundations and installation vessels required to develop deeper water sites. However, with the vast majority of Dutch projects expected to be installed in less than 35m of water, and close enough to shore to be serviced by HVAC connectors, many of these European constraints do not apply to the Netherlands. There is a need for investment in turbine assembly facilities, HVAC export cables and training of technicians but overall the outlook is positive for Dutch projects.

Category Item Classification – EU

level NL

Pre-‐construction development and

design work J J

Wind turbines

Turbine assembly K K Turbine blades J J

Castings and forgings J J Gearbox and generators J J

Towers J J

Balance of plant

Export cables AC:K DC:L

K N/A

Array cables J J AC offshore substation J J DC offshore substation L N/A

Foundations Monopiles J J

Jacket foundations K N/A Gravity base concrete foundations J N/A

Construction vessels and infrastructure

Turbine installation vessels J J

Foundation installation vessels

Standard size monopile installation

J Extra large (>7.5m Ø) monopiles installation

K

Jacket installation L

J

N/A

N/A Cable installation vessels J J

Ports J J Operations and maintenance

Personnel transfer vessels J J Technicians K K

Table 1: Summary results of Qualitative Supply Chain Review


1 Introduction The recent signing of the Energieakkoord has provided a major boost to the Dutch offshore wind sector with a coalition of Government, industry and academia coming together and committing to deliver 4450GW of offshore wind by 2023, including an additional 3450MW of new capacity. To ensure that this new capacity can be delivered effectively, TKI-‐WOZ have commissioned DNV GL Energy to undertake a qualitative review of supply chain capacity, with a particular focus on whether the supply chain will be a bottleneck for Dutch offshore wind projects. This report is the final deliverable for this work1.

1.1 Methodology and approach to analysis This study brings together a quantitative analysis of the build out of offshore wind in Europe and, where relevant, the rest of the world, with a qualitative assessment of the supply chain to meet the attendant demand for goods and services. Additionally, where supply issues are identified, the specific characteristics of the Netherlands’ offshore wind sector are considered to ascertain whether wider supply constraints apply. The figure below outlines the approach to the analysis.

Figure 1-‐1: Approach to analysis

1 This report is issued to TKI-‐WOZ (contracted via Agentschap NL) pursuant to a written agreement arising from the

proposal 130076-‐UKBR-‐P-‐01 of 13/11/13.

Offshore wind demand analysis

Qualitative supply chain assessment

Assessment of Netherlands-‐specific issues

Conclusions

DNV GL offshore wind database

DNV GL technical and market experts

Information sources

Analysis Report section

2

3

4

5


1.2 Data sources The quantitative analysis in section 0 draws on a proprietary database of offshore wind projects developed by DNV GL Energy. The database employs a statistical analysis of all known offshore wind projects and programmes.

1.2.1 The Netherlands’ offshore wind programme The recently re-‐stated offshore wind ambition of the Netherlands is both a driving factor behind the commissioning of this report and an integral element of the analysis. Recent announcements confirm the government’s intention to see 3,450MW of addition offshore wind between now and 2023. Figure 1-‐2 shows the recently announced areas of search, along with the existing offshore wind projects and other constraints in the marine environment while Figure 1-‐3 shows the expected build profile. There is a large amount of uncertainty as to which projects will come forward to fill this capacity and so DNV GL have used the technical characteristics (water depth, distance to shore) of projects previously being developed in the Netherlands as a proxy for the type and location of projects that will come forward by 2023. Assumptions around depth of water are provided in Figure 1-‐4. Over time this will need to be refined but in the interim allows the range of technical characteristics in Dutch projects to be considered.

Figure 1-‐2: Offshore wind search zones in the Netherlands


Figure 1-‐3: Netherlands offshore wind projections

Figure 1-‐4 -‐ Water depth of Dutch projects

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Source: DNV GL


2 Task 1 – Demand Projection To assess whether the supply chain is likely to be a constraint on the roll out of Dutch offshore wind farms it is first important to understand the likely demand for this supply chain across Europe, and where relevant globally. By tracking all known offshore wind projects in a proprietary database and making certain qualified assumptions about the point at which project milestones are likely to be achieved it is possible to make projections of the rate of project delivery and, by inference, demand for related goods and services. Demand for goods and services related to offshore wind deployment breaks down into two main categories:

1. Supply of capital goods for offshore wind farm construction. Two metrics are important here. The first is the number of turbine units installed which drives the run rates required for turbines, foundations and corresponding installation vessels (although clearly the size of the turbine impacts the type of foundation and vessel required). The second is the MW output of wind farms which largely drives the electrical capacity required, although distance to shore is also important. Array cables are partly driven by the number of turbines. . Both the number of units and MW capacity installed metrics are provided where relevant throughout the document.

2. Supply of goods and services to operational projects. This category scales most strongly with the total number of operational turbines.

2.1 Offshore wind capacity projections

2.1.1 Demand for capital items -‐ Europe The major driver of demand for capital goods such as wind turbines and the balance of plant and services such as installation vessels is the rate at which offshore wind capacity is deployed in Europe. Figure 2-‐1 shows the historical and projected annual MW installed in Europe by country. It can be seen that 2013 was an historic year for offshore wind with 1.8GW installed across Europe – a 50% increase on the corresponding 2012 figure. The reduction in capacity in 2014 and 2015 suggests there could be over-‐supply in the market and this “jumpy” deployment profile represents a challenge for the supply chain.


Figure 2-‐1: Annual European offshore wind installation rate – MW

The market is expected to ramp up again in 2016, although with capacity downgrades and Round 3 continuing to move to the right in the UK, the total capacity expected across Europe is far less than what was expected a couple of years ago. Expected capacity in 2016 represents a 20% increase on 2013 figures which should be manageable by the supply chain, although the dip in 2014 and 2015 does not help this. Looking longer term, the market is again expected to step up again in 2019 to become a 3GW plus/year market out to 2024. At current cost this represents a €11 billion/year investment opportunity.

2.1.2 Demand for capital items – outside of Europe Offshore wind is becoming an increasingly global sector and an increasingly global supply chain may mean that surges in demand outside Europe could impact the ability of European projects to access certain components. The historical and projected annual rate of installation in Asia and North America is shown in the figure below2. As can be seen the bulk of this growth is provided by China which after a stuttering couple of years appears to be ramping up for rapid deployment. Although large in terms of capacity, this rapid increase may have relatively little impact on European projects with the bulk of Chinese projects provided by indigenous companies not currently servicing the European market. Projections in the North American market remain uncertain given the political environment but the total demand appears muted in the context of the European and Asian markets and unlikely to create a domestic manufacturing industry. As a result there appears to be greater potential for this capacity to be serviced from Europe with Siemens supplying turbines to Cape Wind a prime example. There may therefore be some limited impact on European projects.

2 Reductions in demand in 2022 and 2023 are likely to be associated with a lack of visibility of projects this far

ahead as opposed to expected deployment.

0 500 1000 1500 2000 2500 3000 3500 4000 4500

Belgium Germany Denmark Netherlands

United Kingdom France Europe other

Source: DNV GL


Figure 2-‐2 Annual offshore wind installation rate outside of Europe

2.1.3 Demand for operations goods and services Demand for operational goods and services such as O&M port facilities and service vessels are driven primarily by the total number of operational turbines. The operations market is even less likely to be influenced by activity outside Europe therefore North American and Asian capacity is excluded. As Figure 2-‐3, below shows, the operations and maintenance market is expected to grow strongly over the next decade with the numbers of operational turbines expect to more than treble. The increase is relatively steady through the period which should facilitate timely build up in operational capability across Europe. The operations market is often forgotten about, given the focus on CapEx, but previous DNV GL studies suggest 18GW of offshore wind capacity creates an annual O&M market of around €2.5 billion/year.

Figure 2-‐3 Number of operational turbines in European waters -‐ projection

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Source: DNV GL


2.2 Impacts of water depth and distance from shore

2.2.1 Water depth Demand for some goods and services such as foundations are impacted by the depth of water in which deployment is occurring. The chart below shows the breakdown of European deployment by water depth. Post 2015 there is an increase in projects over 30m of depth which is roughly the threshold at which jackets become competitive over monopiles (particularly for larger turbines), although developments of XL monopiles may change this.

Figure 2-‐4: Projected installation rate in Europe by depth of water – turbines/yr

2.2.2 Distance from shore Demand for capital items such as export cables depends to a large extent on the distance from shore of projects with Figure 2-‐5 showing changes in distance out to 2023.

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Source: DNV GL


Figure 2-‐5: Installation rate in Europe by distance from shore

Distance to shore is particularly important because there is a threshold at which DC systems become economic over AC. This threshold will vary on a case specific basis and over time but is currently estimated to be around 70-‐75km for a project with radial connections. However the issue is complicated by potential clustering of grid connections – with multiple wind farms connecting into one offshore connection point -‐ usually provided by the transmission system operator under socialised grid systems. The need to connect multiple wind farms through one offshore substation could mean that projects below 70-‐75km could use DC systems and for the purposes of this analysis all projects greater than 50km have been assumed to be potentially DC connected. Figure 2-‐6 shows that there appears to be demand for a maximum of 1.1GW of DC links out to 2021.

Figure 2-‐6: MW of projects greater than 50km from shore

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Source: DNV GL


3 Task 2: Qualitative supply Chain Assessment In this section of the report, an assessment is made of the salient points that relate to particular sub elements of the offshore wind supply chain. A ‘traffic light’ grading is given to each sub element:

Traffic light Meaning

J Good supply – unlikely to constrain deployment

K Tight supply – may constrain deployment without timely investment

L Very tight supply – likely to constrain deployment and significant investment required

Table 2: Traffic light scoring

3.1 Pre-‐construction development and design work Description Developing an offshore wind farm requires a large number of activities focused largely around two areas: a) design and engineering work and b) obtaining planning consent and undertaking the environment impact assessment. Supply chain capacity in this element is mainly focused around people, with a wide range of skill sets required. Some capital equipment is required, mainly in vessels undertaking geophysical, geotechnical, met ocean and environmental surveys. Current suppliers Developers will manage this stage and have substantial in-‐house resource which is supplemented through consultants:

EIA/Planning Consent Survey Design Developers (in-‐house) Fugro Developers (in-‐house)

Large number of environmental consultancies Gardline DNV GL

Lawyers EMU Ecofys HiDef Grontmij Sgurr

Pondera COWI Arcadis ECN

Royal HaskoningDHV Current capacity A huge amount of capacity has been leased and developed, primarily in Germany and the UK, with over 50GW of offshore wind being developed in the UK alone. This has seen development teams and environmental consultancies expand rapidly to meet this increase. However, recent downgrades in 2020 targets in the UK and Germany suggest that there may be some over-‐capacity in the market. Despite this, more upfront design work and a better consent are both means of reducing costs and truly experienced individuals may continue to be scarce. Unlike capital equipment, language may be a barrier to the easier movement of skills between markets and emerging markets such as France may struggle to find experienced personnel with vital local knowledge.


On the survey side, there have been at times concerns raised around capacity but recent downgrades in capacity should mitigate these issues. Barriers to entry Offshore wind poses unique environmental and engineering challenges and so offshore wind experience is vital. Summary analysis Design and development is not generally considered as a bottleneck by the sector and given recent downgrades in expectations in Germany and the UK there should be sufficient capability in the market, although given language issues, emerging (and less English speaking) markets such as France may have difficulty sourcing experienced people.

J


3.2 Wind turbines

3.2.1 Turbine assembly Description Before transport to site for installation, the major components of the wind turbine generators (WTG) must be finished and assembled into final product at specialist facilities by the OEM (original equipment manufacturer). Current technology To date, offshore wind turbines have been in the 3-‐5MW capacity range with rotor diameters of 100 to 125m. The first 6MW offshore turbines with rotor diameters 125m plus are coming to market with a number installed at dedicated test facilities and the first commercial scale project (Thornton Bank) commissioned in 2013. Technological development required out to 2023 Wind turbines are expected to become even larger with significant up-‐scaling of rotors and generators expected. New 5-‐7MW models with rotors 150 to 170m across will be commercially deployed in the next couple of years while manufacturers have already begun demonstrating 7MW class units with rotors more than 170m across. Current manufacturing capacity and suppliers There are currently sufficient assembly facilities to deliver an estimated supply capacity of 2.5GW per annum although the bulk of supply is of turbines in the 3-‐5MW class which will begin losing market share to 5-‐7MW class machines. Supply of offshore turbines has been dominated by Siemens, with Vestas, Areva and REpower (Senvion) in the chasing pack. Sinovel has proven capability in China. The market has seen recent consolidation with both Vestas and Mitsubishi, and Areva and Gamesa forming two separate joint ventures seeking to challenge Siemens’ market dominance There are also a large number of heavyweight new entrants who currently have new products in development. These include Alstom, Goldwind, Ming Yang and Samsung. The XEMC Darwind 5MW, 115m rotor turbine is notable, firstly for being designed and distributed by a Dutch firm, and secondly as a candidate for the first Chinese built offshore wind turbine to be installed outside China -‐ at the Albatross1 wind farm in the German North Sea.

Current suppliers New entrants or products in development

Siemens Alstom Vestas Gamesa Areva Goldwind

REpower (Senvion) Ming Yang Sinovel Mitsubishi (BARD) Samsung

XEMC Darwind Table 3: New and existing wind turbine manufacturers

Announced manufacturing capacity


Alstom have reached final investment decision on a turbine manufacturing facility in St. Nazaire, France to come online in 2015. Many others have announced intentions to invest, signing Memorandum of Understanding with different ports, but have yet to invest. Most notable is Siemens who have stated their intention to invest in Hull in the UK. More confidence in post-‐2020 deployment should lead to more announcements from a number of facilities in various stages of planning. Lead times for new factories Lead time for new factory is around 18 months to first unit and 24 months to serial production. Investment requirements in new factories Significant new capacity is required. Our analysis suggests that the European market will be more than 3GW a year by 2020 and the move to larger turbines will require changes to production facilities. Synergies to other sectors Although all components and sub-‐assemblies used in the manufacture of offshore wind turbines (especially newer, larger models coming to market) tend to be distinct from onshore models, some advantage may lie in sharing of fixed-‐cost items such as premises etc. Barriers to entry The main barriers to supplying turbine products to the offshore wind market is attaining a track record – an expensive and time consuming exercise generally considered to require a product to demonstrate 200 MW of offshore installation. Supplying offshore wind turbines, especially the newer, larger models demanded by the market, requires very significant financial strength, limiting the number of potential competitors. Summary analysis Current and planned capacity is thought to be adequate to meet near-‐term demand but in the later years of this decade there may be a constraint if new manufacturing capacity, which has been announced, does not get built. Traffic Light

K

3.2.2 Turbine blades Description The function of the blade is to convert the energy in the airstream into rotational torque on the main shaft which drives the generator. The highly specialised and low-‐volume nature of the product means that offshore blades are more likely to be manufactured ‘in-‐house’ by wind turbine brands


than onshore blades, but can be laminated at a separate physical location from the main turbine. Diversification of supply is expected as new, specialist entrants enter the offshore blade market. Current technology Current 3-‐5MW class turbines have blades around 50-‐60m in length while new 6MW+ turbine models demand blades in the 70m+ range. The largest blade deployed to date is 83m for the Samsung 7MW turbine. Companies are exploring longer blade diameters including advances in modular designs. Technological development required out to 2023 (including project changes) Increasing blade lengths demand advances in materials technology to keep blade weight down -‐ including the use of carbon fibre. The scale of next-‐generation blades means that developments such as modular multi-‐piece designs may emerge to reduce the cost of logistics and handling. Current manufacturing capacity and suppliers There is proven capability in Areva, LM Wind Power, REpower, Siemens and Vestas which has been sufficient to meet current demand. Future capacity may come forward from turbine OEMs or from specialists such as Euros, Blade Dynamics, Sinoi or SSP Technology.

Current suppliers3 Potential new entrants Siemens Eurus Vestas Blade Dynamics Areva Sinoi

REPower (Senvion) SSP Technology LM Wind Power

Table 4: New and existing blade suppliers

Lead times for new factories/products The lead time to establish a blade manufacturing facility is shorter than the lead time for a main turbine assembly factory, meaning that financial investment decisions can be taken after the confirmation of new turbine assembly facilities. Relevant framework agreements Although many of the incumbent OEMs build blades in house, a number of wind turbine OEMs are using or are planning to use third party suppliers. For instance, Alstom have entered an agreement with LM Wind Power, Mitsubishi have sourced blades from Euros and Samsung have used SSP blades for testing. Synergies to other sectors Blade factories can be used to produce a range of products – including onshore wind blades. Barriers to entry The main barrier to entry of new, independent suppliers is the trend for offshore blades to be manufactured in house, although this is expected to change. Also, the size of these items means that a coastal location is really the only viable option for blade manufacture. To date, only one third party manufacturer (LM Wind Power) has a track-‐record in supply of blades for offshore turbines.

3 Wind turbine OEMs in italics


Summary analysis The shorter facility lead times mean that investment in blade manufacture can occur once a turbine assembly plant has been confirmed, providing scalability in capacity. Blade manufacture is not seen as a current or future constraint on deployment although new investment will be needed. Traffic Light

J

3.2.3 Castings and forgings Description Offshore wind turbine manufacture requires heavy duty metal work for several components. Castings are needed for items such as the rotor hub, nacelle bedplate, bearing housing and gear box housing and steel forgings are needed for bearings, shafts, gear wheels and flanges. Technological development required out to 2023 The manufacture of these items is based on well-‐known and mature engineering techniques and no major changes are envisaged this decade. Cast iron may be replaced post-‐2020 by composite materials in applications where weight reduction offers cost savings to offset the cost. Current manufacturing capacity and suppliers The size of the iron castings needed by very large offshore wind turbines (in excess of 20,000kg) can only be cast by a limited number of European foundries. The number of facilities with convenient access to where the parts are needed is even fewer. However, foundries in Asia and elsewhere can cost effectively supply European demand if needed, although indigenous growth in offshore wind may limit export capacity. Castings and forgings have been supplied to offshore wind by suppliers such as Felguera Melt, Fonderia Vigevanese, Metso, MeuselWitz, Sakana, Siempelkamp, Torgelow and VTC

Suppliers of castings and forgings to the offshore wind sector

Felguera Melt Fonderia Vigevanese

Metso MeuselWitz Sakana

Siempelkamp Torgelow


VTC4 Table 5: Previous suppliers of castings and forgings to offshore wind

Synergies to other sectors By their nature, these items are produced in facilities that cater to a variety of industries. However, the demands of very large offshore wind turbines (large items AND reasonably high volume) sets it apart from other sources of business. Barriers to entry The very large costs and diverse customer base mean that it is unlikely that a new supplier will emerge solely to supply the offshore wind sector. Summary analysis While it remains unclear whether European offshore wind will be supplied with castings and forgings from Europe or Asia, there is little risk that the availability of manufacturing capacity in casting and forging will be a constraint on deployment. Traffic Light

J

4 Acquired Vestas’ castings facility


3.2.4 Gearbox and generators Description The major components in the drive train of offshore wind turbines are the generator unit and (for non-‐direct-‐drive models) the gearbox. Technology status Larger turbines and the demands of maintenance at sea mean that there is a general shift away from the 3-‐speed gearbox drive trains that have dominated the wind industry (on-‐ and offshore) to date and a range of increasingly product-‐specific solutions such as mid-‐speed, direct drive or even hydraulic power transmission are emerging. The main supply chain challenge of direct-‐drive concepts is the large amount of rare earth metals required. Current suppliers

Gearboxes (current)

Gearboxes (future)

Generators (current)

Generators (future)

Bosch Rexroth David Brown ABB GE Power Conversion Eickhoff Mitsubishi Elin

ZF Wind Power (Hansen until

December 2011)

Ingeteam

Moventas Leroy Somer RENK VEM

Winergy (Siemens)

Table 6: New and existing gearbox and generator suppliers Lead times for new factories/products Similarly to blade manufacture, drive train component factory capacity scales with turbine assembly capacity. Lead times are around one to two years following Financial Investment Decision (FID). Synergies to other sectors Gearbox and generator factories are able to supply a range of non-‐wind industries such as mining, shipbuilding and other heavy plant applications which may lead to competition for capacity. Barriers to entry New drive train concepts need a track record before taking a stake in the market. Summary analysis Market is diversifying as OEMs take different drive train approaches. Industry does not appear concerned at supply of generators and gearboxes. As a complement to turbine assembly, supply of gearboxes and generators will scale with turbine capacity.


Traffic Light

J


3.2.5 Towers Description Current technology is common to on-‐ and offshore wind – albeit on a larger scale offshore. Structures are rolled, tapered steel tubes which are flanged and bolted together in sections. Technological development required out to 2023 (including project changes) As turbines increase in size the tower will also need to increase in size. Most technical development is likely to occur in the area of structural optimisation through integration of turbine, tower and foundation to optimise loads. Current manufacturing capacity and suppliers Suppliers with demonstrated offshore capability Suppliers with capability that may enter the

market Ambau CS Wind

Marsh Wind DS SM SIAG Gestamp Wind Steel

Titan Towers TAG Energy Solutions Welcon Wind Towers Scotland

Sif Table 7: Tower suppliers

Lead times for new factories FID for tower capacity can be made alongside turbine assembly plant decisions. Investment requirements in new factories/products The scale of the demand for offshore wind capacity suggests that new European supply will be required to meet it. However, since lead times are short and barriers to entry fairly low due the straightforward engineering required, it is likely that new capacity will keep pace with demand for turbines. Monopile providers may be able to transfer competence aswell. Synergies with other sectors Factories building towers for offshore wind can also serve the onshore wind market, provided that the logistics of accessing markets make sense. Summary analysis Low barriers to entry and short lead times for new manufacturing capacity mean that despite the need for new facilities, the availability of towers is unlikely to constrain offshore wind deployment. Traffic Light

J


3.3 Electricals

3.3.1 Export cables Description In order to transport energy ashore armoured high voltage (132kV or greater) cables are installed. Typically these have been operated using Alternating Current transmission (AC) although as projects move further offshore Direct Current (DC) is being selected, particularly in Germany. Current technology The transmission technology used is dependent on the size of the wind farm and its distance to shore. High Voltage Alternating Current (HVAC) is technically feasible up to a distance of around 70km from shore. High Voltage Direct Current (HVDC) is used for larger and/or more distant wind farms as this technology has the technical capability to transport bulk power over longer distances with reduced losses. Technological development required out to 2023 (including project changes) Higher voltages allow greater power transmission for the same conductor size, which has the potential to reduce cable supply and installation costs. The industry is therefore exploring higher rated AC connections. More innovative approaches are being applied to dynamic loading, operating at higher temperatures and vibration monitoring as this may further increase efficiencies. For large projects further offshore, HVDC cables are at the present time, the only viable option Current suppliers Table 7 below provides a short list of key worldwide export cable suppliers;

Established suppliers New entrants ABB* LS Cable & Systems Nexans NSW General Cable

Prysmian* JDR Cables NKT Cables

Table 8: Export cable suppliers (* has supplied HVDC export cable to offshore wind sector) At the present time, the European cable supply capacity is around 1,000km per year. Given the demand from other sectors such as interconnectors, this is expected to result in limited supply levels, particularly of DC cables (of which there are fewer suppliers) for delivery in 2016/17. Announced manufacturing capacity ABB are doubling capacity at their Karlskrona facility (Sweden) at a cost of $400m by 2015. Nexans has doubled its workforce at their Halden plant and is considering expanding in Asia. Various Chinese manufacturers are developing capacity. More confidence in post-‐2020 deployment should lead to more announcements from a number of facilities in various stages of planning. Lead times for new factories/products The lead time for a new factory is around 4 years. Expansion of an existing facility is around 2-‐3 years. Investment requirements in new factories/products?


Despite recent announcements, demand for export cable is likely to outstrip supply without additional investment. Relevant framework agreements The small number of suppliers and the large size of individual jobs mean that framework agreements are not particularly relevant for this component. This situation could change with the introduction of more suppliers. Synergies to other sectors At this voltage there is limited overlap with the offshore oil & gas market. However there is significant overlap with the international interconnector market, particularly HVDC.. All suppliers also produce onshore cables and lower voltage cables, although the technology requirements are slightly different. Barriers to entry Very large investment required to establish technical knowledge and capability and costly facilities. The market is currently dominated by a few very well established players, although further experienced cable manufacturers are entering the offshore HV cable market. Summary analysis Export cabling is an existing bottleneck. New capacity is being developed, but it may not match the pace of offshore wind development. While the number of suppliers and risks of investing in AC capacity are such that there is a good chance that, should new investment occur soon, supply may be adequate. However, the limited number of suppliers of DC cables, combined with strong growth in other sectors, means that HVDC cabling supply is, and is likely to remain, an issue for the offshore wind industry for the medium term. Traffic Light AC subsea export cables

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3.3.2 Array cables Description Subsea cables are used to collect the output of the wind turbines and transport it to, where applicable, a central offshore substation. Current technology The most commonly used technology is Medium Voltage AC (MVAC) at 33kV, although voltages up to 66kV are being considered. The most common material is XLPE (Cross-‐Linked Polyethylene) with copper core(s) and steel wire armouring. Technological development required out to 2023 (including project changes) Larger turbines drive the requirement for higher cable capacities, which can be met by increasing the voltage (e.g. to 66kV). 66kV could allow smaller projects which are relatively close to shore to connect directly to land without the need for an offshore substation. Current manufacturing capacity and suppliers Table 9 below provides a short list of key worldwide array cable suppliers;

Established suppliers Possible future suppliers ABB Hellenic Cables

Nexans J-‐Power Prysmian LS Cable JDR Cables Twentsche Kabelfabriek (NL)

NSW General Cable Viscas Parker Scanrope Yuanyang Cable

NKT Jiagsu Zhongtian Technology Draka Qingdao Hanhe Cable

Table 9: Array cable suppliers

Lead times for new factories/products New factories require 3-‐4 years lead time but extra capacity can be made available at existing facilities within 1 year of an investment decision, and current suppliers can make sufficient additional capacity available to meet projected demand. Synergies to other sectors Cables can be used in the offshore oil & gas market. All suppliers also produce onshore cables, although the technology requirements are slightly different, particularly in terms of armouring. Barriers to entry High investment required for technical knowledge & capability, and costly facilities. Summary analysis Array cable supply is not currently a bottleneck. Also, the lead times of up to 1 year for more capacity can be factored in to project planning. Supply capacity is unlikely to be a significant constraint as existing suppliers can relatively easily increase output.


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3.3.3 AC offshore substation Description The primary function of the offshore substation is to step the voltage up from the array cable operating voltage to the export system operating voltage. The key piece of equipment required to perform this duty is the power transformer. However, in order to support the transformer function, further electrical plant is required. This plant might include reactors, switchgear, control and low voltage auxiliary systems All this equipment is contained in a large fabricated topside structure which is usually includes two or more stories and is installed upon a support structure (usually a jacket). Current technology High Voltage AC substation technology is mature and well understood onshore, and although application offshore poses some additional challenges, technology risk is considered relatively low. Given the size and weight, fabrication of top sides is a major manufacturing challenge. To date almost all substations have been bespoke designs. Technological development required out to 2023 (including project changes) Although relatively mature compared to DC technology, there is likely to be ongoing technical development in AC substations, particularly with regards to uprating of systems to drive efficiency gains. Standardisation of substation design has long been discussed but little progress has been made to date. Current manufacturing capacity and suppliers There are a number of suitable suppliers of AC electrical equipment with a current overcapacity in manufacture. A number of yards have fabricated substation topsides with the potential for other companies to move in to the market. These are listed in table 10 below.

Current electrical suppliers

Possible future electrical suppliers

Current fabricators Potential fabricators

ABB MHI Heerema HSM Offshore Alstom Grid Hyundai Strukton-‐Hollandia CG Power Hitachi Fabricom

Siemens Energy Transmission Melco Lemanz Harland & Wolff Bladt BiFab Semco Maritime Keppel Verolme

Table 10: AC offshore substation suppliers


Lead times for new factories/products Lead times depend on global market demand at the time of order placement and are currently less than 1.5 years. Design of the foundation and topside that house a project’s substation cannot be completed until the electrical design is well advanced and it is to be noted that the substation is installed early in the construction of a wind farm. For this reason, the lead-‐time for substation equipment has a significant bearing on a project developers’ construction time table. Investment requirements in new factories/products? The global nature of the power generation supply chain and large fabrication capability means that no additional or extra investment in capacity is likely to be needed specifically for offshore wind. Synergies to other sectors The supply chain for AC plant to the power sector is global and not directly related to offshore wind demand or supply. This has the advantage of providing a deep pool of design and manufacturing resource but also puts offshore wind in competition for supply at times of high demand from other sectors. Summary analysis A deep pool of global capacity means that this element of offshore wind supply is not likely to constrain deployment, but may impact on lead times should extraordinary demand come from another sector. Traffic Light

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3.3.4 DC offshore substation Description A Direct Current (DC) substation includes all equipment necessary to convert the AC power produced by the wind farm to Direct Current for transmission of power to shore. Generally and to date, offshore DC substations do not include the voltage transformation stage and have only been used to connect wind farm clusters to shore. Current technology Offshore wind farms use Voltage Source DC technology which is extremely innovative and immature (as opposed to older current source based technology). The first few DC substations are being installed in the German Bight. These platforms are designed to collect up to 924MW of AC power from the surrounding wind farms, and convert it to DC. Large capacity and distant round 3 projects in the UK are considering HVDC substations although it is understood that the economics have not worked for a single project yet. These substations are extremely large (up to 14,000 tonnes) and are towards the upper end of what has been installed in the oil and gas sector. This represents a


significant manufacturing challenge and reduces installation options. Far offshore substations may include an accommodation platform as has been seen at Horns Rev 2. Technological development required out to 2023 (including project changes) DC technology is still developing, and it is likely that there are cost savings to be made in equipment sizes and efficiencies. Reductions in the dimensions of insulation systems for high voltage systems could reduce platform size. Increasing project sizes and distances from shore (e.g. UK Round 3, Germany) should make DC transmission more attractive and require further deployment of DC substations. Given the size of these structures it is likely to be a bespoke manufacturing process with little potential for industrialisation. Current suppliers Table 11 below provides a list of direct current technology suppliers. Alstom is a relatively new entrant to the supply of DC equipment suitable for offshore wind export systems. Fabrication is a major challenge with a small number of facilities with sufficient space and cranage.

Current electrical suppliers

Possible future electrical suppliers

Current Fabricators

ABB Manufacturers based in Asia

Heerema

Alstom Grid Nordic Yards Siemens Energy Transmission

Drydocks

Table 11: DC offshore substation suppliers

Lead times for new factories/products Lead times for HVDC substation supply are currently around 4 years. As for AC substation supply, design of the foundation and steel topsides that house a project’s substation cannot be completed until the electrical design is well advanced. For this reason, the lead-‐time for substation equipment has a significant bearing on a project developers’ construction time table. Synergies to other sectors HVDC equipment is also used for national and international interconnectors and this market is expected to grow over the next decade limiting supply capacity. Sub-‐components are sourced globally and are used in a variety of power sectors. Barriers to entry High investment is required in technical capabilities and facilities for production of HVDC technology. This is a highly concentrated and specialised market, with only a handful of companies supplying global demand. There are only three companies which produce the voltage source converter technology used in HVDC offshore wind farm substations. Fabrication requires an enormous yard and significant project management skills and has begun to the Middle and Far East. Summary analysis High profile delays and overruns in the German market highlight the challenge in delivering these massive, innovative substations with only three companies able to supply the equipment to date. Fabrication and installation will remain a huge challenge given the size and developers have expressed concern around the price, long and variable lead time and risk associated with this technology. Furthermore, demand from other sectors such as interconnectors, is likely to mean that DC substations remain a bottleneck for the offshore wind sector for some time to come.


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3.4 Foundations

3.4.1 Monopiles Description Steel tubular structures, between 30m and 60m in length, embedded in the ground using large hammers and if necessary drills. Tubular sections are rolled from steel plate then welded together. A transition piece, consisting of more complex welded steel sections, acts as the interface between the monopile and the turbine. Current technology To date 7.5m has been the maximum diameter with a wall thickness of ~100mm. Maximum feasible water depth to date is ~35m for a small turbine in ideal ground conditions. Technological development required out to 2023 The development of XL monopiles could push water depth limits to 40-‐50m (depending on turbine size). This will require rolling of large diameter sections such as the 10m tubular created by EEW. Further complications exist due to handling, transportation and installation of such large monopiles, but this technology has the potential to be cost competitive with jackets even at the largest water depths and is subject to ongoing research. Current manufacturing capacity and suppliers

Existing suppliers Possible future suppliers Ambau Dillinger Hütte

Bladt Bilfinger Berger EEW SIAG Sif

Smulders Group TAG Energy Solutions

ZPMC Table 12: Monopile foundation suppliers


Lead times for new factories/products For production of larger monopiles, investment is required in new rolling machinery and facilities; lead times are likely to be around 2-‐4 years. Investment requirements in new factories/products? There has recently been significant investment in new manufacturing facilities from TAG Energy, Dillinger Huette and Bilfinger Berger. If XL monopiles are a success, then there will be a requirement for new suppliers, as there are currently only a few companies capable of producing such large components. Relevant framework agreements Sif and Smulders generally cooperate to produce finished monopiles, with Sif creating the main pile, and Smulders producing the transition piece. DONG Energy has signed a long term framework agreement with Bladt. Synergies to other sectors Steel piles are used for jacket foundations. Steel tubulars are used in oil and gas platforms. Many industries use steel plate. Barriers to entry High investment required in equipment. Summary analysis Current capacity is meeting demand. As projects are developed in deeper waters, XL monopiles may be required – the market for these is currently very constrained, but with sufficient demand, investment in new facilities is likely. Traffic Light

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3.4.2 Jacket foundations Description These include 4-‐legged jackets (the most common alternative to monopiles), tripods, tri-‐piles (a proprietary BARD design), and variations on the jacket structure. Jackets are currently considered by DNV GL to be the most cost-‐competitive of the above technologies, and are the focus of this section. Jackets are generally more costly to produce than monopiles (for equivalent wind farm sites), due to the increased complexity of the structure, and the greater man-‐hours required to complete all of the complex welds. Nevertheless, they have a much greater water depth range than conventional monopiles, and use smaller individual steel tubulars – hence avoiding the need to roll such thick steel plates. Current technology Jackets most commonly have four legs, and are affixed to the seabed using piles of around 2-‐3m diameter. These can be pre-‐piled, and the jacket lowered on subsequently, or post-‐piled, through the sleeves at the base of the positioned jacket. Jackets are commonly used in the oil and gas industry for fixed platforms. Technological development required out to 2023 (including project changes) The main focus of jacket technology is in cost reduction through standardisation and process optimisation. The approach to offshore wind projects (many units at low cost) is inherently different to that taken to oil and gas projects (one or two units, at much higher budget); jacket suppliers to the offshore wind industry must take this into account to help meet future cost reduction targets. Current manufacturing capacity and suppliers

Current suppliers Possible new entrants Bifab Aquind

Technip Crist/Bilfinger Berger Aker Global Energy Group

Weserwind Harland & Wolff Kvaerner Jade Werke

Smulders Group Navantia SIAG Nordseewerke OGN Group

EEW Samsung Heavy Industries Bladt Steel Engineering

STX Europe TAG Energy Solutions ThyssenKrupp Mannex

Table 13: New and existing non-‐monopile steel foundation manufacturers Bladt recently announced a new portside fabrication facility to supply jackets. Lead times for new factories/products New facilities are likely to have a lead time of 2-‐3 years to come to commercial production.


Investment requirements in new factories/products? There is some uncertainty around the expected market demand for jackets with the downgrades in the UK and Germany likely to see the more challenging sites fall by the wayside. At the same time the development of the XL monopile could further cut into market share for jackets. Jacket manufacturers also need to demonstrate a fully industrialised manufacturing process which cuts costs. Synergies to other sectors This technology has mainly been imported from the oil and gas industry, where large jacket structures support platforms in deep waters. These industries can divert resources away from offshore wind fabrication, although the products have some differences. Summary analysis As projects move into deeper waters and turbines get bigger the industry is expected to move towards jacket structures and the announcement by Bladt suggests a potential short fall in capacity. However, issues remain around industrialising the manufacturing process and thereby achieving substantial cost reductions. The potential for XL monopiles to cut into market share for jackets increases uncertainty. Although there is unlikely to be a shortfall in overall capacity, without investment in new manufacturing capacity, costs may not fall which could in turn hinder the development of the sector. Traffic Light

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3.4.3 Gravity base concrete foundations Description Gravity base structures (GBS) are constructed from reinforced concrete, using formwork and concrete pours, as for other civil engineering projects. Due to their great mass (>3000 tons), manoeuvring GBS on land is a slow and difficult process – hence they are constructed in the harbour from which they are installed. With a footprint of 30m or more, this means that significant space is required for fabrication. Before installation, the seabed must be prepared to ensure it is flat and even. Once installed in place, foundations are filled with ballast material (rock and sand) to weight them to the seabed. An advantage of GBS technology is that no drilling or piling is required, hence rock under the seabed surface is less of an issue than with other steel foundations. Current technology GBS have been used predominantly in the Baltic Sea, where sea-‐ice can be a problem for more flexible foundations. Due to their large size and associated cost, GBS have only been deployed in


shallow waters to date (up to ~15m). While there are no physical constraints on the size of concrete foundations, costs quickly become uncompetitive at larger water depths. Technological development required out to 2023 (including project changes) Full scale demonstration of new designs and corresponding reductions in the cost of energy are key in the next ten years. There have been novel GBS concepts suggested, but so far none have come to market. If any concepts can significantly improve either capital or operational costs, then these will be attractive in the current climate. Concepts which avoid the need for costly high-‐specification installation vessels may have an advantage. Current manufacturing capacity and suppliers

Current suppliers Possible new entrants MT Hojgaard Strabag Ballast Nedam

DEME Aarslef / Bilfinger Berger Table 14: New and existing gravity base concrete foundation manufacturers

Supply capacity is not an issue, as fabrication can take place at any port with sufficient space. Supply of concrete and steel re-‐bar (reinforcement) overlaps directly with the civil construction industry, so will not present a bottleneck. Lead times for new factories/products Establishment of a new GBS production facility at a suitable quay may take less than a year. This may be extended if quayside reinforcements are required. Investment requirements in new factories/products? New products are needed to become cost-‐competitive with steel foundations, particularly in deeper waters. Synergies to other sectors Fabrication techniques and materials correspond directly to the civil construction industry. Summary analysis GBS foundations have suffered limited success outside of the Baltic Sea, losing out to more cost-‐effective steel solutions. Difficulties include fabrication facilities (finding quays big enough), and transportation of such large structures to site. If GBS technology is to compete with established steel foundations, novel forms and installation strategies need to be demonstrated and scaled up appropriately. Traffic Light

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3.5 Construction vessels and infrastructure There are 4 main elements required to enable construction and installation of offshore wind turbines:

• Turbine installation vessels; • Foundation installation vessels; • Sub-‐sea cable installation vessels; • Construction and installation ports.

3.5.1 Turbine installation vessels Description The weight, height and precision required for nacelle and blade installation requires self-‐propelled jack up vessels. Current technology Although a wide range of vessels have been used historically the high lift height, weight and precision means that jack up vessels dominate the market. Crane capacity, max water depth and deck area are the three primary drivers. Technology development required out to 2023 As turbines get larger and are installed in deeper water the requirements for turbine installation vessels will change. According to previous DNV GL estimates, over a five year horizon, about half the in-‐service fleet has good market access in terms of water depth (30m+) and maximum lift (500tonne at 25m), while all the new builds have good market access. However over a ten year horizon and considering water depths of 50m + then even the service fleet may be redundant while even some new build specs may fall short. Current manufacturing capacity and suppliers Historically installation vessels have been a major bottleneck for the sector with few purpose built vessels and demand from a buoyant oil and gas market driving up prices and reducing capacity for offshore wind developers. However, over the past few years around 14 purpose built vessels have been ordered, many of which are now coming on stream. As a result over-‐supply in the market is likely, at least for the next couple of years, although Asian demand could potentially reduce this. This can be seen by the recent announcement that Seafox 5, a state of the art installation vessel, will move to the oil and gas market for a year or so. Looking longer term, specs may need boosting for more challenging sites.

Suppliers with proven track record Additional capacity A2SEA Fred Olsen Windcarrier Geosea HGO Infrasea Solutions

MPI Offshore RWE OLC Seajacks Subsea7

Swire Blue Ocean Van Oord Jack up Barges BV Workfox Geosea/DEME Gusto MSC

IHC Merwede Table 15: Turbine installation vessel suppliers


Lead times for new products It takes around 24 months to commission a ship from FID, although typically there may be some teething problems and a number of offshore wind farms have suffered from delays to new build vessels Notable commercial arrangements A2Sea, a major player in offshore wind installation is jointly owned by Siemens Wind Power and DONG Energy. Investment requirements in new factories/products Significant recent investment has moved the market to one of oversupply. However in the longer term more challenging sites may require even new build vessels to be amended.

Owner Vessel name HGO Vidar

Seajacks Scylla Seajacks Hydra

Gulf Marine Services NG 1800 Gulf Marine Services GMS Enterprise

A2Sea Sea Challenger (sister of recent new-‐build Sea Installer)

Jackup Barges JB118 Van Oord Aeolus

Table 16: Examples of turbine installation vessels in build Synergies Jack-‐ups with long, lattice legs, notably those of Seajack’s fleet and Gulf Marine Services’s recently purchased NG1600s have an application to the oil and gas sector, reducing investment risk and partly explaining the current over supply of vessels. Synergy with the oil and gas business has been problematic for the offshore wind sector in the past with oil and gas demand driving up prices. However, there appears to sufficient supply for this to be less of a concern going forward. Offshore wind also requires a much greater number of jack ups than other sectors which poses some design challenges. A further complicating factor is the need for jack-‐up vessels for major component replacement during the operational phase of a wind farms life cycle. There is evidence that the supply chain is gearing up to provide vessels and services targeting this activity. Summary analysis The five year turbine installation market appears to be characterised by over-‐supply with a large number of new build vessels coming on stream. Asian demand could potentially impact this oversupply although there is as yet no indication of this. In the longer term, more challenging sites may require some boosting of specifications but turbine installation vessels are not considered a bottleneck.


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3.5.2 Foundation installation vessels Description Vessels and other hardware for transporting, lifting and installing wind turbine foundations offshore. Current technology Jack ups or floating vessels can be used with standard size monopiles requiring lifting capacity of up to 1,200t. XL monopiles (greater than 7.5m diameter) require greater lifting capacity. Current manufacturing capacity and suppliers There is limited supply of vessels able to lift extra large monopiles and jacket-‐type foundations but there is good supply of standard size monopile installation capacity.

Suppliers with proven track record Additional capacity A2SEA Jumbo Offshore

Ballast Nedam Saipem Geosea Technip

HGO Infrasea Solutions Van Oord MPI Offshore Volker Wessels RWE OLC Scaldis Seajacks

Seaway Heavy Lifting (Subsea7) Swire Blue Ocean

Workfox Table 17: Foundation installation suppliers

Investment requirements in new factories/products Investment is needed for jacket installation vessels and lifting capability for extra-‐large monopiles. Synergies to other sectors Vessels that can lift extra-‐large monopiles may be suitable for wind turbine installation applications but the non-‐wind applications for floating heavy lift vessels is limited to some oil and gas activity. Summary analysis There is sufficient supply of capacity for standard monopile installation while the supply of the lifting capability needed to install monopiles with diameter greater than 7.5 metres will need to be invested in to meet projected demand. Jacket installation vessels with adequate deck capacity to


carried more than three foundations are very limited in supply and will constrain deployment at deep water sites without investment in more vessels. Traffic Light

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Extra large (>7.5m Ø) monopiles installation K


3.5.3 Cable installation vessels Description Vessels and other equipment needed to install and bury export and array cables for offshore wind farms. Current technology Historically a range of installation vessels have been used including dumb barges and modified vessels. However due to significant issues during cable installation across the sector, an increasingly number of purpose built dynamic positioning vessels are coming on stream. In terms of tools, ploughs are most typically used, with jetting and trenching options for more challenging environments. Technological development required out to 2023 Cable installation remains a major challenge for the sector and a number of industry initiatives are seeking to reduce the risk from this area. As cables get larger, carousels and vessels may need to increase in size. Current manufacturing capacity and suppliers Capacity is sufficient to meet supply, with investment in vessels and equipment targeting multiple offshore sectors.

Suppliers with proven track record Additional capacity Canyon Offshore (trenching) Jan de Nul CT Offshore DeepOcean Siem Offshore

EMAS AMC Tideway


Prysmian Powerlink Services (Global Marine Energy)

Nexans Reef Subsea

Technip Offshore Wind Van Oord

Visser & Smit Marine Contracting Table 18: Cable installation vessel suppliers

Synergies to other sectors Suitable vessels are able to serve the oil and gas, electricity transmission interconnector, pipeline and other markets. This deepens the pool of available vessels but also means that increased interconnector development may impact on vessel availability. There is also projected to be some demand for these vessels for the repair of damaged cables on operational offshore wind farms. Summary analysis Greater understanding of earlier technical issues and a large pool of available vessels across a range of offshore industries means that availability of cable installation vessels is unlikely to be a constraint on offshore wind deployment. Traffic Light

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3.5.4 Ports Description Port facilities used as either installation logistics and marshalling bases or as manufacturing centres are vital to offshore wind build out. Technological development required out to 2023 (including project changes) It is likely that future installation strategies (for larger wind farms of larger wind turbines) will benefit from larger lay-‐down areas and increased use of manufacturing ports. Current manufacturing capacity and suppliers North West Europe, including the Netherlands, has a large number of ports which are being used for offshore wind installation including:


Country Port

UK

Belfast Great Yarmouth

Harwich Hull

Merseyside Mostyn Teesside

BE Ostend DK Esbjerg

NL Eemshaven Vlissingen IJmuiden

DE Bremerhaven*

Cuxhaven Emden*

Table 19: European offshore wind installation ports (*has been used as manufacturing port) Announced investment in capacity A large number of ports have announced investment in new facilities. These include Bremerhaven in Germany, Ostend in Belgium, Belfast in the UK and St Nazaire in France. Siemens have received planning consent for a new facility at Green Port Hull, while across the Humber, Able recently gained planning consent for 325 hectare site for a range of marine energy activities including quayside access with 11m draft. Lead times for new factories/products The lead times for new port infrastructure tend to be longer than for individual offshore wind projects, especially since investment cannot occur until a project’s turbine model has been decided upon, which happens relatively late in the development process. However, investment in integrated facilities is likely to occur to meet the needs of the industry as it grows and, if it doesn’t, existing ports will be used in albeit sub-‐optimal logistics strategies. Relevant framework agreements A notable arrangement is the DONG/Scottish Power Renewables arrangement with the port of Belfast and other ports are in receipt of investment by developers of wind farms such as RWE’s £50m deal with the port of Mostyn to support Gwynt y Môr wind farm. Synergies to other sectors There may be competition from traditional uses for ports such as goods transport and storage as well as more contemporary uses such as leisure and housing. This is particularly important within the UK where ports are privatised commercial operators and therefore unable to take into account wider social benefits of manufacturing facilities. Summary analysis The cost optimal solution to Europe’s offshore wind ambition includes investment in new integrated waterfront infrastructure. However, existing North Sea ports are sufficient to enable planned deployment and availability is not expected constrain deployment in the Netherlands.


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3.6.1 Personnel transfer vessels Description Crew transfer vessels, aircraft and other hardware required to maintain and operate wind farms once commissioned. Current technology Most access to turbines for maintenance purposes is carried out using day-‐boats although there are some examples of the use of both helicopters and fixed or floating offshore accommodation platforms. Technological development required out to 2023 (including project changes) As wind farms get larger and further from shore – and as more turbines are out of the manufacturers’ warranty period, new access concepts such as workboats with vessel-‐mounted access systems, helicopter support and offshore accommodation will increase in prevalence. However there is a great deal of uncertainty about the nature and number of vessels, platforms and aircraft that may be required at individual sites. Nevertheless, the demand for work boats is likely to remain for the foreseeable future, with an estimated 0.03 -‐ 0.06 work boats per turbine at most projects. Current manufacturing capacity and suppliers There is a thriving and competitive industry in the manufacture of personnel transfer vessels. With a large number of yards already engaged in the supply of vessels including from the Netherlands6. The following list is a non-‐exhaustive snapshot of some major players:

Supplier Country AF Theriault Canada

5 http://www.scottish-‐enterprise.com/knowledge-‐hub/articles/guide/offshore-‐wind-‐operations-‐and-‐maintenance-‐opportunities 6 http://www.damen.com/en/markets/offshore-‐wind


Alnmaritec UK Alicat UK

Southboats UK Austal Philippines

Båtservice Norway CWind UK Damen Netherlands

Danish Yachts Denmark Fjellstrand Norway Mercurio Spain Mobimar Finland

Strategic Marine Singapore Topaz Engineering United Arab Emirates Table 20: Personnel transfer vessel suppliers

Lead times for new factories/products It is unlikely that new yards will be established specifically for the offshore wind market, but lead times for new vessels from existing facilities may increase at times of high demand. Investment requirements in new factories/products While significant new capacity will need to be built or dedicated to the construction of logistics vessels for offshore wind, demand is visible a long time into the future and there is a great deal of global shipbuilding capacity that could be dedicated to offshore wind if required. Synergies to other sectors The transfer demands of offshore wind are distinct from those of other offshore sectors such as oil and gas, so boats tend to be specialised to the task. However, existing yards and manufacturers are able to build offshore wind transfer boats. Summary analysis The forward visibility and the global capacity to build new craft mean that the availability of personnel transfer vessels is unlikely to be a constraint on the build out of offshore wind. Traffic Light

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3.6.2 Operations and maintenance technicians Description Similarly to other emergent industry sectors, the availability of suitably qualified and, perhaps more crucially, experienced personnel is vital to the long-‐term sustainability of the offshore wind sector. A potential ‘skills gap’ has been identified7 in the on-‐ and offshore wind sectors which threatens to grow significantly in the next decade – most notably in the operations and maintenance subsector. Technological development required out to 2023 Operations and maintenance of wind turbines is a rapidly changing field as new access technologies and turbine designs come online. However, provided with a sufficiently qualified pool of recruits wind turbine manufacturers are well placed to provide training on technology specific elements. Current manufacturing capacity and suppliers In addition to training provided by manufacturers such as Siemens8, a number of academic courses and programmes provide wind energy (on and offshore) technical and commercial training. However, there is an accepted underlying demographic challenge to European industry as the proportion of the wider work-‐force with strong STEM9 qualifications declines. Investment requirements in new factories/products The European Wind Energy Association estimates that the EU wind energy industry will face a skills gap of up to 15,000 workers by 2030 on-‐ and offshore, two thirds of which will be in the operations and maintenance area. Our analysis of offshore wind shift patterns indicates that across Europe, the number of full-‐time-‐equivalent jobs (FTE) need by operations and maintenance is between 0.5 and 1.5 FTE per operational turbine or up to 11,000 FTE in Europe in 2023. Synergies to other sectors Although much of the technical work may be similar in principle to onshore work, there are also similarities working patterns with the offshore oil and gas sector which may compete for staff – and possibly be willing to pay higher salaries. Summary analysis Although there is a long lead-‐time for operations activities, there are also some challenges to the creation of a suitably skilled and experienced workforce, not least the economy-‐wide shortage of technical graduates and the competition for staff with the offshore oil and gas sector. Traffic Light

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7 http://www.ewea.org/fileadmin/files/library/publications/reports/Workers_Wanted_TPwind.pdf 8 http://www.siemens.co.uk/en/wind/training-‐centre-‐profile.htm 9 Science, technology, engineering and mathematics


3.7 Summary of Global supply chain assessment

Category Item Classification – EU level

Pre-‐construction development and design work J

Wind turbines

Turbine assembly K Turbine blades J

Castings and forgings J Gearbox and generators J

Towers J

Balance of plant

Export cables AC:K DC:L

Array cables J AC offshore substation J DC offshore substation L

Foundations Monopiles J

Jacket foundations K Gravity base concrete foundations J

Construction vessels and infrastructure

Turbine installation vessels J

Foundation installation vessels

Standard size monopile installation

J

Extra large (>7.5m Ø) monopiles installation

K


Cable installation vessels J Ports J

Operations and maintenance

Personnel transfer vessels J Technicians K

Items for which supply poses a risk of bottleneck are:

• Turbine assembly • Export cables • DC offshore substations • Jacket foundations • Foundation installation vessels • Operations and maintenance technicians

The next section will review the implications for the Netherlands’ programme of these potential bottlenecks.


4 Implications for the Netherlands offshore wind build-‐out The components identified in section 3 to be either amber or red are here considered from the perspective of the Netherlands’ offshore wind ambition.

4.1 Turbine assembly On the whole the capacity of European offshore wind turbine assembly is a supply constraint that generally affects all national markets equally, although local content requirements can change this. As the Dutch market is expected to be open, this is unlikely to impact Dutch projects, although as the French and Dutch programmes are likely to ramp up at the same time, French turbine manufacturers may have limited export capacity for Dutch projects. However this is unlikely to significantly impact overall market supply and the Dutch sector can be considered to have the same overall issues as Europe as a whole.

Figure 4-‐1: Annual rate of capacity installation – non NL EU and NL

Implication for NL:

• Without additional investment in wind turbine manufacture, particularly for larger turbine sizes, there is likely to be a supply constraint towards the end of the decade.

EU/Global traffic light:

K NL-‐specific traffic light: K

0

500

1.000

1.500

2.000

2.500

3.000

3.500

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Capa

city installs (M

W/yr)

Annual rate -‐ EU excl NL Netherlands (Energieakkoord)


4.2 Export cables As discussed earlier, there are likely to be different supply/demand conditions for DC and AC export cables. To understand the Netherlands pipeline, it is useful to make some assumptions about the breakdown between Netherlands projects which are more likely to use DC transmission technology and those that are more likely to use AC technology10. Analysis suggests that all known projects in the Netherlands can or are likely to use AC (medium or high voltage) transmission technology. The volume of global capacity to be installed closer to shore than 75km gives an indication of global demand for AC export cabling. It can be seen from the figure below that although demand rapidly increases for AC export cables, much of the Netherlands’ projected deployment occurs after the peak in demand in 2019/20, although this optimism should be tempered by acknowledgment that the decline in known installations from 2019/20 represents the current focus on 2020 target delivery11.

Figure 4-‐2: NL deployment vs European deployment closer than 75km from shore

Implication for NL:

• Analysis suggests that the Netherlands’ pipeline can be built out using AC export cables if necessary;

• Constrained supply may be a challenge for the remainder of the decade by much of the Netherlands’ capacity is projected to be installed after the peak of global AC export cable demand

EU/Global traffic light:

AC:K DC:L

NL-‐specific traffic light: AC:K/ J DC:NA

10 It is important to note that project economics are not the only factor governing the decision whether to use AC or DC transmission

technology. Issues such as bundling of connections and crossing of sea barriers are also relevant. 11 Post 2020 targets at an EU or Member State level may alter this picture significantly.

0

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2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Installabo

n rate (M

W/yr)

<75km (excl NL) Netherlands (Energieakkoord)


4.3 DC offshore electrical systems The fact that the Netherlands’ pipeline can be built using AC export transmission technology means that the constrained supply of DC offshore substation plant should not impact the Netherlands’ programme on a project basis. However if the decision is made to bundle connections through a DC link then this constraint could become live Implication for NL:

• On a project basis, the Netherlands has a more favorable supply outlook for DC electrical systems than other EU national markets. However, if a decision is made to bundle multiple wind farms through one DC grid connection then this constraint could become live

EU/Global traffic light: K NL-‐specific traffic light: N/A (subject to grid policy)

4.4 Jacket foundations The most significant determinant of the class of foundation used for offshore wind turbines is the depth of water in which it being installed. The large majority of offshore wind projects in the Netherlands’ pipeline are expected to be in maximum water depths of between 20 and 30 metres with three quarters of the total number of foundations projected to be installed in this range. It is reasonable to assume that other projects elsewhere being constructed in similar depths of water will be competing for the same supply of depth-‐specific products -‐ such as foundations and jack-‐up installation vessels. The figure below shows the installation rate for this segment of the global market and indicates that, as offshore wind development in water depths of 20-‐30m in markets such as the UK and Germany declines with projects moving into deeper water, development in the Netherlands will steadily increase.

Figure 4-‐3: Annual installation rate for European (non-‐NL) offshore wind in water depths of 20 to 30 metres and

total NL deployment. Implication for NL:

0,0

50,0

100,0

150,0

200,0

250,0

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Num

ber o

f turbine

s p.a

20-‐30m excl NL

Netherlands (Energieakkoord)


• The vast bulk (if not all) of the Netherland’s pipeline can be built out without the need for jacket foundations;

• Furthermore, the demand for monopiles in the Netherlands ramps up as many of the leading countries’ demand moves away from monopiles towards greater use of non-‐monopile foundations.

EU/Global traffic light: K NL-‐specific traffic light: J

4.5 Foundation installation vessels As noted above, the majority of Dutch projects is in water depths of 20-‐30m and therefore can be built using monopile foundations. Supply of installation vessels for standard monopiles is not expected to be constrained and so this appears to be less of a constraint than other sectors. Implication for NL:

• Most of the Netherlands ambition can be met using standard size monopile foundations – vessels for installation of which are far more readily available than for more exotic vessel types.

Standard size monopile installation J Extra large (>7.5m Ø) monopiles installation

K


NL-‐specific traffic light: J


5 Conclusions 1. Without additional investment in wind turbine manufacturing facilities, there is likely to be a

supply constraint towards the end of the decade, particularly with the move towards larger turbines. This will impact most countries in Europe equally including the Netherlands;

2. Decisions as to the grid connection policy in the Netherlands will determine whether AC or DC

systems are used. Both have potential supply shortages although DC is far more acute. 3. The relatively shallow water should mean that the bulk (if not all) of the Netherland’s pipeline

can be built out without the need for jacket foundations removing concerns over supply capacity of these items. Furthermore, the demand for monopiles in the Netherlands ramps up as many of the leading countries’ demand moves away from monopiles towards greater use of jacket foundations;

4. Most of the Netherlands ambition can be met using standard size monopile foundations –

vessels for installation of which are far more readily available than for more exotic vessel types.

20140514 rep nl offshore wind supply chain assessment f · 2017. 11. 1. ·...

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