How to cut costs in the US floating offshore wind sector

How to cut costs in the US

floating offshore wind sector
A white paper in association with

CONFERENCE & EXHIBITION • JUNE 10-11 • BOSTON

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 How to cut costs in the US floating offshore wind sector
4th Annual
US Offshore Wind 2019
Conference & Expo
Boston Marriott Copley Place
June 10-11
Secure Investments and
Partnerships in the US Offshore
Wind Industry Boom.
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Acknowledgements
This white paper was put together with insights taken from the US
Offshore Wind 2018 conference, from the following industry experts:
Walter Musial
Manager, Offshore Wind
National Renewable Energy Laboratory
Garrett Barter
Wind Analyst
National Renewable Energy Laboratory
Necy Sumait
Chief, Renewable Energy, Pacific Region
Bureau of Ocean Energy Management
Alla Weinstein
CEO
Castle Wind
Introduction
Offshore wind farms had been in existence for around a quarter of a century
before one was first placed on floating platforms. The delay was not just to
technical issues, but also because in offshore wind’s principal markets to date,
in Europe, floating substructures just weren’t needed. As the US offshore wind
market takes off, though, there is a need for the technology not just on the West
Coast but also in many locations on the East and Great Lakes. And the technology
challenges are starting to be solved.
Consequently, floating foundations are seen as key to the long-term growth of
the US offshore wind sector. The issue is how to cut the cost of these structures as
quickly as possible. With floating offshore wind due to be a major theme at the
4th Annual US Offshore Wind conference, in June 2019, this paper looks at how
this cost reduction might be achieved, based on the views of experts at the 2018
edition of the event.
 How to cut costs in the US floating offshore wind sector
4th Annual
US Offshore Wind 2019
Conference & Expo
Boston Marriott Copley Place
June 10-11
Secure Investments and
Partnerships in the US Offshore
Wind Industry Boom.
Get The Brochure Here
The US floating market opportunity
Unlike Europe, where the relatively shallow North Sea has favored the
deployment of fixed-bottom foundations for almost all offshore wind
deployments to date, the US has significant scope for the use of floating
substructures. The National Renewable Energy Laboratory (NREL) at the US
Department of Energy (DoE) estimates that by 2050 20% of the wind power in
the country could be offshore, amounting to 86 GW of capacity.
Of the 86 GW predicted by NREL, only 33% is expected to be in the North
Atlantic. This will mean that “all regions are participating” in the growth of the
industry, says Walter Musial, manager for offshore wind at NREL.
And “there’s significant trouble getting fixed bottoms in the Pacific,” he says.
“Everybody understands the Pacific is going to be floating. California through
Hawaii, Oregon and Washington have deep water. Shallow water is not going
to be developed at scale.”
Even in the Atlantic, “we have both deep and shallow water resources,” Musial
says. “There’s a lot of floating. Massachusetts is one of the big resource winners.”
Comparison of California gross offshore resource to technical resource potential by water depth.
Source: NREL (Potential Offshore Wind Energy Areas in California: An Assessment of Locations, Technology, and Costs).
NREL also estimates there could be 771 TWh of resource per year in the Great
Lakes but has not factored that into its predictions because of the difficulty in
of building offshore wind farms in areas prone to icing. According to NREL’s
Wind Vision study, 58% of available US offshore wind resource is in waters
deeper than 60 m, which are off limits to fixed-bottom foundations today. Thus
“we have an abundant resource for floating offshore wind,” Musial confirms.
As well as offering access to wind resource, in many of these deep-water sites
“the siting conflicts are significantly reduced,” says Musial.
The fixed-bottom experience
The question is: can this resource be tapped cost efficiently? NREL believes
so, based on what has happened with fixed-bottom offshore wind in Europe.
“This [The European offshore wind price declines] is a continuous surprise to
us,” says Musial.
 How to cut costs in the US floating offshore wind sector

Europe has achieved rapid cost reductions in offshore wind thanks to

technology improvements, a lower cost of money based on greater risk
acceptance, a maturing of the supply chain and increasing competition, he
says. Since these are all factors that could apply just as well to the US market,
“it’s all good news,” he says.
NREL models of floating offshore cost reduction indicate that the technology
could ultimately match bottom-fixed levels. “Floating starts out a bit more
expensive but it’s mostly a maturity thing,” says Musial. “The costs come
together in later years.”
Furthermore, he says: “Our model is pretty conservative. It’s over-predicting
what the costs would be.”
This is fortunate because in what could potentially be floating offshore
wind’s largest US market, California, there is currently no State mandate for
procurement of offshore wind energy, says Necy Sumait, Renewable Energy
Section Chief at the Bureau of Ocean Energy Management (BOEM) Pacific
Region,
As a result, she says, offshore wind has to be competitive with other renewable
energy technologies. Based on renewable energy trends seen in California so
far, “it’s looking like solar plus storage [may be] the competition for offshore
wind,” says Sumait.
Alla Weinstein, CEO of project developer Castle Winds, says that in California
“you have a merchant market. You sell into the grid. The bottom line: California
has great potential but it’s not for the faint of heart. It will take time to get
there.”

Challenges for floating cost reduction

One of the challenges of using fixed-bottom trends as a guide for floating
offshore wind cost reduction is that the true costs of European projects are
not fully known. “There’s an assumption that if projects are built and revenue
comes at prices agreed at the auctions the costs will be commensurate with
those prices,” says Musial. “The actual costs are confidential, generally.”

4th Annual
US Offshore Wind 2019
Conference & Expo
Boston Marriott Copley Place
June 10-11
Secure Investments and
Partnerships in the US Offshore
Wind Industry Boom.

Get The Brochure Here Estimated unsubsidized levelized cost of electricity for California’s Channel Islands North (site 2) and
Humboldt Bay (site 5) locations. Source: NREL (Potential Offshore Wind Energy Areas in California: An Assessment
of Locations, Technology, and Costs).
 How to cut costs in the US floating offshore wind sector
4th Annual
US Offshore Wind 2019
Conference & Expo
Boston Marriott Copley Place
June 10-11
Secure Investments and
Partnerships in the US Offshore
Wind Industry Boom.
Get The Brochure Here
Furthermore, the European market has characteristics that might not apply in
the US. For instance, “in the United States we don’t have a guarantee there will
be a grid connection provided,” Musial says.
And “in most of these European projects there’s a maturing supply chain.”
Nevertheless, the European experience does provide some certainty over cost
reduction potential because developers would not be expected to bid at that
are prices higher than their costs. “There is some profit being made,” Musial
guesses.
Furthermore, in 2016 DOE/DOI wrote an Offshore Wind Strategy featuring
an economic analysis “based on what we think the projects would cost from
a bottom-up standpoint,” says Musial. “The takeaway is that these fixed-
bottom costs coming down would translate to better economics for floating
technology as well,” he says.
NREL’s analysis identified four factors that could contribute significantly to
floating offshore wind cost reduction:
• Risk and its impact on financing. This “was one of the biggest issues” in
NREL’s analysis, says Musial, but “we think that’s going to be mitigated with
experience.”
• Grid infrastructure, which represents about 20% of the potential for cost
reduction. “There’s a huge benefit in having the grid connection,” Musial
says.
• The Jones Act, which is important because it means ships will have to be
built to service the industry.
• Resource. “In the North Sea the resource is better than most BOEM sites,”
Musial points out.
Prospects for floating offshore wind innovation
Garrett Barter, a wind analyst at NREL, believes that one way the US offshore
wind industry could achieve rapid cost reductions in floating technology
would be to adopt a whole-system approach to infrastructure. In the current
offshore wind design paradigm, he says, the turbine, substructure and control
systems are all designed independently and then integrated on site. “This
won’t give you a cost-effective approach,” he says.
“You have an extremely complex physical environment. Floating offshore
wind is complex. You really need a systems approach that can tackle all these
complexities at the same time. It’s ripe for a systems approach.”
However, he adds, “in order for the wind industry to offer systems designs it
will need to evolve a bit.”
As well as embracing a full-system approach, floating offshore wind might
benefit from a further look at concepts that have been discarded by the
onshore industry. For example, says Barter, “Two-bladed rotors and downwind
rotors might have some merits for floating applications.”
Two-bladed rotors would lessen the weight of turbines, which NREL believes
could be a key factor in cutting the cost of floating wind. They might also
simplify turbine assembly. Similarly, downwind rotors might allow for lighter,
more flexible blades because there is no risk of tower strikes in high winds.
And “in a floating platform you’ll have some natural yaw stability,” Barter says,
which is important because there is no solid platform to yaw and turn against.
 How to cut costs in the US floating offshore wind sector

An opportunity for US leadership?

Elsewhere, greater use of carbon fiber composites, superconducting direct
drive generators and generative designs with additive manufacturing are all
areas that could contribute to floating offshore wind cost reduction, Barter
says. Embracing these innovations as part of a vertically integrated, systems-
based product design approach could help the US achieve leadership in
floating offshore wind, he says. “Maybe there is room for DoE and the Labs to
help with this transition,” he comments.
NREL’s proposal is for the offshore wind industry to emulate the aerospace
sector. “On the aerospace side, Boeing is known for having a global network of
suppliers but retains the final design authority,” Barter points out.
Boeing has achieved this level of integration predominantly as a result of
industry mergers and acquisitions, but for wind it might be possible to get
to the same point with collaborative efforts and partnerships. Musial says
it could pay for the US to pursue this path. “From a leadership standpoint it
makes a lot of sense,” he says. “To be a leader in this technology means we
would be gaining a huge economic opportunity.”

4th Annual
US Offshore Wind 2019
Conference & Expo
Boston Marriott Copley Place
June 10-11
Secure Investments and
Partnerships in the US Offshore
Wind Industry Boom.

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How to cut costs in the US floating offshore wind sector

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