Offshore wind requires capabilities that are a long way from the world of onshore renewables. This is an environment of ports, shipping and helicopter charter, undersea survey and cabling, maritime supply and safety - and, ultimately, managing risk at sea. This still new industry looks set to test technology, logistics, supply chains and people to the limit.
Suitable equipment
Step one on the supply chain is procuring the assets needed on a wind farm, starting with turbines - blades, towers and gearboxes. There are currently 45 companies manufacturing wind turbines in 17 countries. Not all are suitable for offshore deployment, however.
Production of offshore wind turbines is often seen as a supply chain constraint in Europe. But UK-based BVG Associates, a technical consultancy specialising in the implementation and economics of wind and marine energy generation systems, suggests that no investment beyond plans already in place is needed to meet demand.
Market concentration is high, with only Siemens, Vestas and Repower currently having a proven offshore pedigree. But the availability of turbines for offshore deployment is improving, according to industry association RenewableUK.
Once an offshore wind turbine is built, it needs to be erected in the sea. Most foundations are currently made of steel and based on onshore designs. As water depth and turbine size increase, however, there will likely be a move towards alternative designs, such as jackets, tripods and suction buckets. In deeper waters, floating designs are being considered too, but the supply chain for some of these technologies is still in its infancy.
As wind projects go further offshore after 2015, BVG anticipates a steep increase in the supply of subsea export cables. Cable installation is not delaying offshore projects, but is a high-risk process that must seek constant improvement. Insurance claims for cable damage and failures are already significant compared with other offshore wind components.
Concerns exist as to whether growing demand for substation transformers and large bearings for wind turbines can be easily met. There are reliability issues in the areas of gearbox failings - especially bearings and cable connections to the generator; generator failures - especially bearings and cable connections; and operator-access limitations.
Wider logistics concerns
Construction ports for European offshore wind are set to rise from three in 2010 to around 17 in 2020.
It is expected that a handful of large hubs will develop in the North Sea, including Hull and Harwich in the UK and Bremerhaven in Germany, plus a number of smaller ports in support. Up to 2020, the value to European ports of wind farm service and maintenance, excluding turbine manufacture, is likely to be in the region of £1.2 billion (EUR1.4 billion), according to BVG.
Vessels remain a key constraint in the eyes of most developers and turbine manufacturers. It takes nine months to modify an existing vessel for offshore wind use and around two years to build a new jack-up barge or self-propelled installation vessel. Some existing vessels are not suitable for installing larger turbines in deeper water and in harsher conditions. By 2020, the number of installation vessels for European offshore wind is likely to be around 35, compared with seven today.
In addition to vessels moving people and assets, offshore wind also requires the deployment of survey craft, often unmanned and controlled remotely, to undertake geo-ocean studies of currents, marine life, the marine environment and the sea bed.
As wind farms move further out to sea, helicopters become an option in terms of access, just as they have done in the North Sea oil and gas industry over the past 30 years. In the UK, Aberdeen-based Bond Offshore Helicopters has signed its first offshore wind contract to service the Greater Gabbard wind farm off the coast of East Anglia from its base in Lowestoft. Helicopters can transport personnel, tools and equipment quickly, but at much greater cost than vessels and with different restrictions relating to weather conditions.
When offshore wind farms are close to ports, moving crews and spare parts by small vessels is a viable solution. But as the distance and size of offshore wind farms increase, according to BVG, the offshore wind industry will follow the trend of the oil and gas industry and deploy either founded or floating hotels rather than solely using ships or helicopters from onshore bases.
Personnel would then stay offshore for weeks, using smaller vessels or helicopters to transfer to individual turbines. "Mother ships" could also be deployed for more mobile accommodation at sea. The first offshore accommodation platform has been installed at the Horns Rev II wind farm off the Danish coast, and two more have been contracted elsewhere in the North Sea.
A report by UK seabed owner the Crown Estate in February on how to improve delivery of UK offshore wind outlined a list of actions that is broadly applicable to other areas developing offshore wind capacity. Its first recommendation is that governments improve the economics of wind, define deployment targets, remove barriers and facilitate the creation of an industrialised supply chain. The industrialisation of the offshore wind supply chain is seen in many countries as a means of both achieving economies of scale and creating an indigenous industrial sector that can lead to the creation of long-term jobs.
The Crown Estate report's second recommendation is to award zone licences to consortia. This would encourage the industry to work together and lower costs, as well as encourage good practice, strong communication and excellent health and safety, the report says.
Crucially, it wants to see engagement internationally to maximise long-term viability of offshore wind markets and stimulate co-operation in innovation and delivery. Investment in infrastructure around ports and technology demonstrations will maximise deployment capability and the development of next-generation technology, it concludes.
Another recent report, from Danish engineering consulting firm BTM Consult, identifies more than 200 players operating in the offshore wind supply chain by 2020. The supply chain is still narrower than onshore because of component size and quality requirements, it says. Reliability and cost issues in the harsh marine environment can deter companies from operating in this area.
BTM concludes that, for the time being, the offshore wind market's supply chain will be dominated by an international top ten, including forerunners Dong Energy, Vattenfall and E.on on the demand side, Siemens and Vestas on the supply side, with Repower, Bard, Areva Wind, Sinovel and WinWind following suit.
Beyond 2020
Europe has so far led the way in the development of offshore wind power. As a result, the UK, Germany and Denmark have dominated the supply chain too. By 2020, not only will China have leapt ahead of Europe, but South Korea and the US will also be looking to develop supply chains of their own. Manufacturing and logistics will cluster where the growth is.
In the short term, there are supply chain constraints in an offshore sector dominated by the North Sea. But as offshore wind becomes a truly global market, so the supply chain serving it will become ever more tempting and players wanting some of the action will multiply.
