xBelgium and the Netherlands appear to be heading in diverging directions in their attempts to get their offshore projects out of the conference hall and into the water. Belgium developer C-Power argues for co-operation as being the key to progress whereas the Dutch government seems intent on pitting developers against each other. More openness is essential if the wind industry is ever going to make the "quantum leap" offshore, says Filip Martens, CEO of the C-Power consortium. Its Thornton Bank project in Belgium looks likely to be the first offshore wind station off either the Dutch or Belgian coasts.
xWith a legal package that will guarantee the financial returns for the offshore projects currently under review by the Belgian Council of State, Martens is hopeful that the political framework to enable the breakthrough of Belgian offshore wind will very soon be in place. The draft legislation provides for national grid operator ELIA to buy the power of the first 216 MW of any wind plant sited on the Thornton sandbank at EUR 107/MWh for a guaranteed 20 years. "Every developer who obtains all his permits in accordance with this legislation can use it as a kind of rucksack over the lifetime of the project," says Martens -- and this means the ball is now very firmly in the court of the wind industry. "Once it's on the statute book there is no longer any external excuse for not going ahead. It's up to us and, of course, the financing community to put the puzzle together."
xNevertheless, "The timing is very tight. Given that there is a lead time on the cabling, for example, of eleven months it is essential that the draft legislation is cleared by the court and approved by parliament within the very near future. A month's delay here could result in another lost year."
xThat is very much the story of the offshore sector for the past five years, says Martens. "Every year we've heard a project being announced only to hear subsequently that it has been postponed. People are seriously underestimating the technical challenge of going offshore. The technology is not yet established -- we are not talking about a wind farm with its feet in the water, but an offshore project with a wind turbine. These are two separate worlds which as yet are not speaking enough to each other. That's very frustrating for us as a developer."
xOnly communication can break through the vicious circle of developers requiring product guarantees that manufacturers cannot issue without on-site experience. "At the moment it's a waiting game: who is willing to pay the price of being first? Turbines are getting bigger and everybody wants to make use of that economy of scale, but of course if everyone waits, these larger turbines will never be tested, never become mature enough to mobilise all these potential investors to come to the market."
xAs a developer Martens places the responsibility on the manufacturer and welcomes the entry of industrial giants such as Siemens into the market: "I don't want to gamble on technology, if I did I'd buy shares in the wind turbine company. I need a reliable product, I take all the other risks, the weather risk, the operational risk, etcetera, etcetera."
xxTo encourage a process where technology experience is shared, Martens would like to see the European Wind Energy Association create a platform for open discussion of project problems. "It shows the grandeur of the industry to be able to talk about that. I think it would be very mature if we are able to do so. Of course there are teething problems, but put them in perspective. At Horns Reef, on average, the turbines have only been out of operation for three weeks. That's not so dramatic. If every car was withdrawn out of production which had teething problems there would be no cars on the road.
x"For me Vestas is a reliable partner because they were willing to bite the bullet, so bravo, and we shouldn't dwell on their problems at Horns Reef. Let's have that attitude. Obviously the first wind turbines in open sea encounter different conditions than in the lab. That's obvious, so lets talk about it and not try to hide it. Let's talk about the unpredicted side-effects, the unpredicted accessibility problems, the unpredicted wear and tear on equipment. Nobody has to lose their competitive advantage, but don't try and hide it away and think people are so stupid that they don't know there are problems."
xThe 60 turbines for Thornton Bank have yet to be selected: "We will take a picture of the best available technology as and when we are ready to press the green button, for we are optimistic about the trend in the industry towards larger and better site-adapted units, so it would be crazy to say now what we are going to use." Initially, C-Power will be setting up a test group of just six turbines. Here too, Martens is hoping to work in collaboration with the manufacturer. "We will say come and work with us to test the turbines together."
xMartens sums up his approach with the observation: "I have no competitors in offshore wind. My only competitor is a project that fails. So it's important not to rush."
xxAll rush in Holland
xxMartens description of the ideal approach could not be further from reality in neighbouring Netherlands, where the government's new first come first served allocation strategy has effectively thrown the sector into fierce competition from a standing start. Offshore wind had otherwise ground to a halt in the Netherlands after the government slapped a three and a half-year moratorium on development while it attempted to lay the ground rules of a licensing system.
xWithin weeks of lifting the ban, a total of eight "start notices" were registered by developers declaring an interest in a particular section of the Netherlands exclusive economic zone. On receipt of a start notice, the government has 13 weeks to set out what it wants in the environmental impact statement (EIS). The first to present a completed EIS will be allowed to apply for a site license.
xSeven of the eight start notices belong to WEOM, a wind development agency owned by large Dutch power producer Nuon and operating on behalf of Nuon and Shell. This is the consortium behind the proposed 99 MW Near Shore Windfarm (NSW). WEOM is to conduct studies for sites off IJmuiden, north of Den Helder, south of Den Helder, Katwijk, and three sites around the Hague. But these are very much "future music" says Nuon's David Uitdenbogaard. "They are just a number of potential sites to be investigated for the possible construction in collaboration with Shell of a single wind farm some time after 2010. Any decision to proceed with a project on one of these sites will be based on the performance of the Near Shore Windfarm (NSW), which is scheduled to begin production in late 2006, given the project gets the go-ahead from the boards of both companies later this year."
xThe eighth start notice was issued to E-Connection, which is in the process of selling its license to build a 120 MW wind farm at sector Q7 of the exclusive economic zone to rival Dutch developer Evelop. The notice is for a 240 MW site at sector P15 between two shipping lanes off the Hague. E-Connection also has three applications pending which were submitted before the 2001 moratorium. These are for projects of 120 MW, 140 MW and 200 MW planned for sites between 25 and 30 kilometres from the coast.
xAccording to E-Connection's Mathieu Kortenoever, environmental impact statements and additional data for these sites have been submitted. He believes the company should be allowed to proceed with a license application. But one of the sites overlaps one of the WEOM sites. The dispute over rights to the site has gone to court.
xxWhere's the grid?
xxThe most ambitious proposed Dutch project to date originates from offshore newcomer Raedthuys Holding, a division of wind developer and insurer Groenraedt, in collaboration with certification agency KEMA. In February it announced its intention to build a 450 MW wind plant in Dutch waters for completion in 2008. "The plans are concrete and a start notice identifying the site will be published very soon," says Raedthuys's Erwin Coolen.
xFor Coolen, the main stumbling block for Dutch offshore wind development is lack of sufficient investment in the electricity grid. "Assuming we get the go-ahead with our 450 MW the 120 MW of Q7 and 99 MW of the NSW, and another project or two, we will be sitting on the 1000 MW mark by around 2010, at which point a decision will have to be taken about grid reinforcement -- and that debate is only just beginning. I don't think people realise that time is pressing."
xC-Power's Martens believes the Dutch and Belgian markets will attract different types of investor. The Dutch system is constructed to favour large concerns which can make use of the tax breaks on offshore wind investment. The Belgian system is more open to smaller independent investors, he believes. The market will only really take off when the wind industry can promise investors it can build a turnkey project which will generate power for a specified cost per kilowatt hour and operate for a specified period, says Martens. That day is still very far distant, he feels.