As countries seek to reduce their CO2 emissions in the race to meet net-zero targets and decarbonise their energy systems, interest in floating wind projects is beginning to grow across the globe.
In early 2022, the US and France, announced calls for tenders for large acreages off their coasts in the drive to supply renewable energy sources and calls for tenders off the coast of Norway is also expected later this year. In late 2021, Germany announced the results of its most recent offshore wind auction, with two companies picking up the development rights for three sites in the North and Baltic seas.
ScotWind marks radical growth
In the UK, ScotWind is one of the most exciting announcements for offshore wind and the first leasing process in Scottish waters for over a decade, with winning allocations doubling the previously anticipated installed capacity (25 GW awarded, versus an anticipated 10 GW). This announcement sets out the correct level of ambition to prompt radical growth in the offshore wind sector, with floating wind projects making up 60% of the allocated capacity.
DNV worked for several of the ScotWind bidders in the run up to submission, supporting more than 9 GW of the 25 GW offshore wind allocation awarded in the ScotWind seabed leasing auction.
DNV’s support was focused in two key areas. The first area involved optimising project technical concepts to lower the levelised cost of energy (e.g., technology choice, conceptual design, foundations, geotechnics, energy production, electrical infrastructure, etc). The second area involved peripheral support for bidders including optimising bidding approaches and advising on management systems during project implementation. DNV’s specialists leveraged their domain expertise in UK waters, with knowledge spanning legacy business areas such as renewables advisory, oil and gas, and certification, as well as in depth comprehension of the processes, regulations, and guidelines to working offshore.
To support bidders in putting forward the most competitive projects, DNV used its proprietary software Renewables Architect (RA), an engineering-based cost of energy model. RA allows for multi-disciplinary design, analysis and optimisation. It can look at several different design concepts based on site inputs and provide users with insights into how the cost of energy can vary with small changes to project design and assumptions. The key value in RA is its ability to look at many different variables simultaneously to help prioritise different technical concepts such as foundation type, turbine size, project layout and electrical infrastructure. On the back of RA, DNV’s experts support customers with interpretation of results, connecting the technology to the commercial landscape of offshore wind.
Coupling our engineering expertise with our understanding of the market and commercial drivers positions us well to support the offshore wind industry. In the UK, with the entrance of floating wind and the technical and commercial challenges this brings, this will require “thinking outside the box”, but there is no time like the present. Having worked in industries deploying floating concepts for decades in the North Sea, we’re positioned well to help manage risk with new technologies and designs
Through its engagement with various players in this area DNV understands the needs and future trends that are emerging. One example towards standardising floaters is a new concept to tackle quality and cost, this is looking at emerging “disruptive” designs that aim to significantly reduce the amount of steel used therefore reducing the cost and strain on the supply chain in Europe.
DNV has the capability to support both the deeply technical aspects and the commercial side of offshore wind, but there will be a challenge in bridging the gap between the two. Furthermore, there are short-term challenges for operators in the areas of grid connection, turbine technology, port infrastructure, supply chain, and skilled workforces.
The lead bidders in the auction could list advisory firms like DNV as project partners if they knew they would be relying on our skills, track record and expertise to round out their competence to deliver their projects. As an independent advisor, being listed as a project partner will not strictly exclude DNV from working with other successful bidders, as our role is primarily as a supplemental expert in specific subject matter areas. Having over 150 years of experience in managing risk and building trust with our independence, DNV will continue to support the offshore wind industry globally as it grows and faces new challenges.
For all the awarded ScotWind projects, we will offer both advisory and third-party certification services according to DNV’s internal governance service model for coexistence to avoid conflict of interest. As an independent foundation, we have no stake or claim in any of the winning projects.
Europe plays a crucial role
Whilst Europe is now one step ahead of the US and Asia in terms of floating wind development, this will start changing around 2030 when China is anticipated to take the lead in installed capacity. However, DNV believes that Europe has a crucial role to play in making the technology viable for other geographies.
It all depends on the scale of projects as this is what drives costs down and makes offshore wind increasingly appealing for investors. The largest existing floating wind project in the UK now is 50 MW, but ScotWind awarded 15 GW in the latest leasing round so we expect to see larger and larger projects in the next decade, with economies of scale ensuring reduced energy costs.
DNV is well placed to advise on floating wind projects and there is great potential to replicate the process used for the ScotWind bidding round for other seabed leasing rounds around the world. We understand the technical and commercial challenges that face the successful bidders. What we now need to do, is be ready to support them on the journey to make these projects a reality.