Upbeat view oN Offshore supply chain bottleneck
Despite broad wind industry concerns that supply chain bottlenecks will hinder offshore wind development, a report by the British Wind Energy Association (BWEA) finds that limitations in the supply of turbines, equipment, vessels and offshore services will have only a minor effect on UK project construction up to 2015. With the pace of offshore wind installation in British waters stepping up from next year, the UK will assume pole position in the global offshore wind market, according to "UK Offshore: Moving up a gear." Up to 2015, the UK offshore market is forecast to be twice the size of any other national market.
Compared with findings in the association's previous offshore analysis 18 months ago, project developers are more upbeat, with utility players changing their view of offshore wind from being an "obligation" to an "opportunity." The difference between then and now has been the government's plans to provide additional support to offshore wind under its Renewables Obligation legislation (next story).
The BWEA's analysis shows that limitations in the supply chain will result in a reduction in global offshore wind delivery only in the years 2010 to 2015. For the UK, by 2015 overall delivery is expected to be reduced by just around 300 MW against the background of a total installed offshore capacity of over 6 GW. The dominant constraint for some years will be turbine supply where the offshore sector is squeezed by the success of the global onshore market. Today, only two turbine suppliers -- Siemens and Vestas -- have a "credible offshore pedigree" of 200 MW of turbines generating offshore. And Vestas has for the time being withdrawn its flagship 3 MW turbine from the offshore market.
But the situation is changing, says the BWEA. German turbine maker Repower, now controlled by Indian wind company Suzlon, has just installed its 5 MW offshore turbine offshore for the first time and a second German company, Multibrid, whose majority stakeholder recently became French engineering group Areva, is set to install its 5 MW at sea for the first time in 2008 (previous story). BWEA expects both companies to have established an offshore pedigree by the end of 2011. By 2015, three further players could emerge from a pool of six who are eyeing up the offshore sector, according to BWEA: Anglo-Dutch DarwinD, German companies Bard Engineering and Enercon, American companies Clipper Windpower and GE Wind Energy, and Spain's Gamesa.
As established European manufacturers are squeezed by new entrants to the onshore market -- many of which are located in low-cost manufacturing markets -- the older companies will be more ready to supply to the Europe-dominated offshore sector, says the report. "The offshore sector is likely to become the driver for the commercialisation of cutting edge technology and best practice, which in time will flow out to the rest of the wind industry."
Vessels and contactors
In the short term, the BWEA sees a shortage of specialist vessels and contractors, with those already servicing the sector reporting full order books to beyond 2010. There are plenty of vessels in the global marketplace, however, which could be converted to install wind turbines, though at the cost of some "financial pain," says the report. That could price some projects out of the market. Cable installation is not an issue, believes the BWEA. Despite competition from other sectors increasing lead times for transformers, cables and foundations this should not limit delivery of UK projects.
Looking ahead to future licensing of further offshore projects in UK waters, an analysis of developers' views reveals they believe a target of 20 GW by 2020 is achievable. The BWEA is urging the government to award some 30 GW of development leases by 2015. With current capacity and existing projects under development, this should help the UK meet its renewables targets and ensure a pipeline of work after 2020, it says.