By CEO & Founder Jon Salazar
Industry conferences and exhibitions are drowned out by the hum of excitement about floating offshore wind. It is easy to see why, as global leaders, business executives and clean energy players have made floating offshore wind an essential component of their energy future.
Global quality assurance and risk management company DNV estimated global capacity will reach 300GW installed worldwide by 2050, and the International Energy Agency (IEA) says that, at its theoretical maximum, floating offshore wind could supply the 2040 global electricity demand 11 times over. Considering that the Global Wind Energy Council (GWEC) estimates around 80% of the world’s offshore wind potential lies in waters that are 60 meters or deeper, this is fantastic news for the world and the environment—virtually carbon-free electricity for all! But there is no guarantee this future will come to pass, and it will take significant work to get there.
However, no plan goes off without a hitch. A tiny hiccup here, a roadblock there, and suddenly that brilliant, stellar plan has lost some shine. And so it goes with floating offshore wind. The problem is, of course, cost. The National Renewable Energy Laboratory (NREL) suggests the levelised cost of electricity (LCOE) for floating offshore wind is $133/MWh. Fixed-bottom offshore is $78/MWh, and onshore turbines are $34/MWh, very similar to the LCOE for solar energy.
Onshore wind and solar PV are easily the cheapest options. But geography, NIMBYism, and intermittency problems can push decision-makers and developers away from new projects. Solar energy is not a viable option for countries at high latitudes, as long, dark winters make generating electricity from the sun unfeasible. Onshore turbines are a challenge to sell in the central parts of Africa and South America as well as Southeast Asia, as they don’t experience much wind, according to the World Bank’s Global Wind Atlas.
Recently, we have seen ‘not in my backyard’ cultural pushbacks against giant wind and solar farms, as new capacity is blocked by locals complaining they are eye sores. In such cases, fixed-bottom offshore wind has become attractive, even though it is more expensive at current LCOE.
The IEA suggests that the global potential for fixed-bottom offshore is 36PWh — much more than the current global demand for electricity. In 2021, this was 28PWh, so there is a lot more fixed-bottom capacity to be built. In countries where solar and fixed bottom offshore wind are not feasible, the low-carbon electricity generation option is arguably nuclear. Because nuclear is significantly more expensive than wind and solar, it makes the $133/MWh for floating offshore wind attractive. But, in the countries with a choice between fixed-bottom or floating offshore wind, the latter has more than a little hiccup to overcome if it cannot start to be more price competitive.
The hope expressed by many, is that mass production will reduce the cost of the first-generation floating platforms that have already made their debut in initial demonstrator and pre-commercial projects. At this juncture, it is hard to see where significant cost reductions will come from. In fact, the cost estimates are still increasing as the details become clearer for expenses like lay down space at ports, cranes for the big lift, wet storage, hook-up, and maintenance.
There is precedent for significant cost reductions in early technologies. In 1977, the cost of PV was $76.67/watt. By 2013, it was $0.74/watt, but the PV cells of 2013 looked nothing like those in 1977. “Swanson’s Law,” which argued that the price of solar PVs dropped by 20% every time volume doubled, was not achieved by standardisation and mass production alone but via a series of innovations that challenged the original design.
Floating offshore wind will become more affordable, but the platforms and associated mooring systems that enable cost parity with fixed-bottom wind will look nothing like they do today.
Over the next few months, we will outline how innovations like Gazelle Wind Power’s floating offshore wind platform can reduce the costs of infrastructure development at ports, significantly reduce the quantity of materials used in the platforms and lay a pathway for floating offshore wind to undercut the LCOE of fixed-bottom wind.
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