WIND PUTS TO SEA

Siren Song: The Eternal Lure of Offshore Wind Power
Keith Johnson, September 15, 2009 (Wall Street Journal)

SUMMARY
While the U.S. wind industry still struggles with bureacratic impediments and Not-In-My-BackYard (NIMBY) distractions and its immense offshore wind resources go undeveloped, Europe’s wind industry is laying plans for a bounteous offshore harvest of rich wind assets.

Oceans of Opportunity; Harnessing Europe’s largest domestic energy resource, from the European Wind Energy Association (EWEA), documents how Europe’s offshore wind assets, which are 7 times Europe’s present electricity demand, could supply 60% or more of the continent’s electricity by 2020.

With 100+ gigawatts of offshore wind projects in various stages of planning, Europe could get 10% more of its electricity supply from offshore wind and avoid 200 million tonnes of CO2 emissions every year.

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EWEA is targeting an offshore wind capacity of 40 gigawatts by 2020. This would represent an average annual market growth of 28% over 12 years, nearly matching the EU’s onshore wind capacity growth of 32% per year from 1992 to 2004.

To reach its offshore wind targets, EWEA proposes linking the 11 offshore power grids presently in operation and the 21 offshore power grids under consideration for the Baltic and North Seas into a “pan-European electricity super highway.”

EWEA also wants to see an integrated European electricity market to bring affordable wind power-generated electricity to the widest range of consumers.

Action from Europe’s policy-makers will be needed to build the proposed multi-billion euro industry and infrastructure to achieve EWEA’s vision. If past performance is an indicator, EU leaders will back the wind industry's play. The payoff will be thousands of New Energy jobs and the foundation for a New Energy economy that will make Europe a world leader in offshore wind.

Meanwhile, the U.S. has yet to build a single offshore utility-scale project.

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COMMENTARY
If New Energy is vital to a carbon constrained future, and it is, then the development of offshore wind is vital to Europe.

There is sun in the southern part of the continent and wind in some parts of the north and west but on the whole Europe lacks resources rich enough to meet its population’s electricity needs. Except offshore, where it is rich with wind assets.

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All Europe needs is the technology to harvest wind and the transmission to carry it from Northern Ireland to the Southern Balkans and it will be able to meet the rising power demand and beat global climate change.

Doing so will also eliminate dependence on expensive and unreliable fossil fuel imports and create thousands of New Energy jobs.

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The European Commission’s 2008 Offshore Wind Energy: Action needed to deliver on the Energy Policy Objectives for 2020 and beyond affirms the potential and the need. The Commission estimates a 2020 power demand of 360 gigawatts of additional capacity, 50% more than current capacity. Aging power plants must be replaced. The turnover offers the opportunity to invest in New Energy, new infrastructure and a 21st century transmission system.

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The EU installed 366 megawatts of offshore wind in 2008 (8,111 megawatts onshore) in 7 installations. There are now 1,471 megawatts of offshore wind in 8 Member States. The UK led in 2008 and took the overall lead. Denmark is 2nd.

By the end of 2009 EWEA expects a total EU installed offshore capacity of ~2,000 megawatts. If the financial crisis does not disrupt development, the EU will reach an installed capacity of 1,000 megawatts, 1 gigawatt, in 2010. That would make offshore wind 10% of European wind capacity.

EWEA’s 2020 target was upped in March 2009 to 230 gigawatts. EWEA wants 40 of those 2020 gigawatts to come from offshore installations and 150 gigawatts to come from offshore wind by 2030. The industry sees this as a “challenging but manageable” target.

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40 gigawatts of new offshore capacity in 12 years will require the development of a new supply chain at a pace and on a scale matching the North Sea oil and gas industry’s rapid expansion of another era. But unlike the oil and gas infrastructure, once the offshore turbines are built they will go on producing indefinitely.

The projected growth would take EU offshore capacity from 366 megawatts to 6,900 megawatts, a 28% year over year growth rate. From 1992 to 2004, EU onshore wind went from 215 megawatts to 5,749 megawatts, a 32% year over year growth rate.

Yet there is doubt the growth is possible or the predicted trends will actually be realized. In 2003, EWEA foresaw 70,000 megawatts of offshore capacity by 2020. In 2004, the prediction was for 10,000 megawatts by 2010. Cost and technical challenges prevented the predicted growth.

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The target 40 gigawatts will cost at least 55 billion euros, or 1.38 million euros per offshore megawatt. But offshore wind was 1.94 million euros per megawatt in 2004 and has increased in cost every year since. In 2008, it was 2.4 million euros per megawatt. Economies of scale have not yet been built.

But the biggest names in wind turbine manufacturing are working on it. Vestas, the world leader, just went into production on a new, sturdier 3-megawatt turbine and General Electric announced it will break into the offshore market through its recent purchase of a specialized Norwegian wind manufacturing company. The Norwegians are the ones who conquered the North Sea for the oil industry.

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The European Environment Agency’s (EEA) Europe’s onshore and offshore wind energy potential confirms the EU has the wind to meet the growth projections. The EEA’s estimated 2020 economically competitive potential is 2,600 TWh, 60-to-70% of projected electricity demand. Its 2030 economically competitive potential is 3,400 TWh, 80% of projected EU electricity demand. The EEA estimate of offshore wind’s technical potential in 2020 is 25,000 TWh, 6-to-7 times the projected electricity demand. The estimate for 2030 is 30,000 TWh, 7 times projected electricity demand.

The EU wind resource is spread across the 15 member states. Though most of the EU’s 2020 New Energy-generated power will come from onshore wind, EWEA says the EU should use the 2009 through 2020 period to turn its existing, planned and considered small transmission systems into a unified pan-European grid along the lines of the EWEA 20 Year Offshore Network Development Master Plan.

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New, smart transmission can carry offshore wind, smooth wind variability and make power markets more efficient. The first step to such a grid is to stop thinking in terms of national systems and begin thinking in terms of European transmission corridors connecting the North Sea, the Baltic Sea and the Mediterranean Sea. Responsibility for implementing this vision will go to the European Network of Transmission System Operators (ENTSO-E). Projected plans by the various players are forthcoming.

Offshore wind is “an emerging industrial giant” but can only grow as fast as its supply chain. Bottlenecks must be identified and addressed. Installation vessels, substructure installation vessels, cable laying vessels, turbines, substructures, towers, wind turbine components, ports and harbours must be financed and available in quantity as R&D and economies of scale emerge, driving cost down.

Offshore wind presents technical and technological challenges no greater than those faced by the North Sea oil and gas industry. Yet the ferocious North Sea was conquered, though the offshore drilling rigs’ production is now dwindling. With adequate EU policy support, wind turbines that are installed from a comparable effort will never stop producing electricity for the EU grid and the jobs they create will be a perpetual contribution to the EU economy.

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EU nations have already committed themselves to maritime spatial planning (MSP) and to setting aside offshore areas for wind developments and transmission interconnection. Further long term policy developments consolidating EU-wide action must be sustained.

QUOTES
- From Oceans of Opportunity: “The offshore wind energy resource will never become a limiting factor. There is enough energy over the seas of Europe to meet total European electricity demand several times over. In a recent study, the European Environment Agency (EEA) estimates the technical potential of offshore wind energy in the EU to be 30,000 TWh annually. The European Commission estimates total EU electricity demand of between 4,279 TWh and 4,408 TWh in 2030…It would require eight areas of 100 km times 100 km (10,000 km2.) to meet all of the EU’s electricity demand, or less than 2% of Europe’s sea area not including the Atlantic…”

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- From Oceans of Opportunity: “Europe is faced with the global challenges of climate change, depleting indigenous energy resources, increasing fuel costs and the threat of supply disruptions. Over the next 12 years, according to the European Commission, 360 GW of new electricity capacity – 50% of current EU capacity – needs to be built to replace ageing European power plants and meet the expected increase in demand. Europe must use the opportunity created by the large turnover in capacity to construct a new, modern power system capable of meeting the energy and climate challenges of the 21st century while enhancing Europe’s competitiveness and energy independence…”
- From Oceans of Opportunity: “Offshore wind power is vital for Europe’s future. Offshore wind power provides the answer to Europe’s energy and climate dilemma – exploiting an abundant energy resource which does not emit greenhouse gases, reduces dependence on increasingly costly fuel imports, creates thousands of jobs and provides large quantities of indigenous affordable electricity…”