OPINION: What’s going on? What projects are out there, and which projects are materializing?
By SIMON MARKUSSEN - Senior Underwriter
At NIORD we are very excited about the future of floating offshore wind. But what does that future look like? What projects are out there, and which projects are materializing?
We use Clarkson Research’s datasets for offshore renewables. We then integrate those datasets into our self-developed application, called REAL. It helps us understand the exposures we have, as well as other details of projects (such as cable layout of existing projects), vessels used in a project’s lifetime, and so-on.
Below is a map from REAL which shows all the projects that are listed with floating foundations, with the small caveat that the vast majority of these are nowhere close to being built yet.
In total, the above map shows 365 floating foundation projects, totalling some 280GW - meaning an average project size of just under 800MW. Today, we have about 74GW of operational, mainly bottom-fixed wind, across some 320 projects, making today’s average wind project around 230MW.
This pie chart below shows both the GW of projects with floating foundations as well as the share of total. Taking up more than 60% of the pie, NW Europe and the Mediterranean have a lot of blue-sky projects lined up. The Mediterranean pie-piece is driven largely by Italy, with about 50GW of blue skies.
A major focus area today is the growing size of turbines. Although there is little certainty in the data (as a lot of it is likely to be educated guesses at this point), the 280GW of projects are expected to constitute just shy of 19,000 turbines; this means an average turbine size of slightly under 15MW. What the result will be is going to be interesting to see.
Lastly, why do we do floating wind? The main reason is that the water depth exceeds what is economically and, in some cases, technically feasible for bottom-fixed wind. For our blue-sky projects the database indicates an average water depth of around 300m - which does not sound too unreasonable. This is about what Hywind Tampen is at. Still, with this as an average, we will get to see a number of projects at some quite impressive water depths
Notably, the above paragraphs, pie-chart and the map only account for those projects registered with floating foundations. If one were to add those which are not clearly defined as floating projects but which are planned in water depths which imply floating technology, then the blue-sky projects for Asia Pacific increases by 40%, while those for Latin America increase five-fold. Such increases are huge contributors in taking us from a total of 280GW to around 350GW “painted in the skies”.
When are all these projects coming? Well, the average “best start-up” of these projects is around mid-2033, while around 130 floating projects are scheduled to be operational before 2033.
Although that would be amazing, we do not expect all of these projects to materialize and, of course, there are bound to be delays. Among these there are projects that have been accepted as credible enough to be included by Clarksons. Clearly, someone has an ambition and has done “something” on every one of these.
And, for the sake of reference, DNV are expecting close to 270GW of floating wind by 2050.
What will be interesting to see over the next five/ 10 / 20 years is which of these will materialize into something - only time will tell.
Short Term View – What is coming in the near future?
A few years back, there were a mass of projects heralded as being operational by 2030. A lot of these projects are now expected to achieve operationality closer to 2035 while, in some cases, they have been cancelled altogether.
Still, there are projects that we expect will come online in and around 2030. There are a number of exciting pilot projects in Japan, ranging from single demonstrators to projects around 100MW. There are also the small-to-medium-sized projects in Europe.
And, in the time from now till 2030, some key questions in our minds are:
1. How many of the Scotwind projects will come to realization? We know some are progressing nicely.
2. What’s going to happen with floating in South Korea? It seems they have many ambitious plans. And, of course, we are excited to follow projects such as Bandibuli through its development!
3. Lastly, I can’t help but wonder about Utsira Nord. We think the lot sizes of 3x500MW (potentially 2x750+1x500) are good. We may be biased but we do think that the supply chain for floating in Norway is in quite a good position to support these projects.
What has been done to date?
This map shows what we have done to date. These are the demonstrators and projects that are operating, under construction, plus those demonstrators that have been decommissioned. So, there are 14 operational demonstrators and projects, with 12 being built and three demonstrators that have already been decommissioned. This represents 230MW operational, with about 400MW under construction, the construction part coming from France with around 90MW and the remainder in China and some in Japan.
Vive La France! – AO5 Award
The AO5 auction in France was awarded to Elicio and BayWa r.e in what was called the world’s first commercial floating offshore wind tender. The resulting project is named Pennavel.
You may know Elicio from Belgium, where they are involved in the Norther and Rentel, as well as the Seamade, projects.
The partners are also developing the Buchan Offshore Wind project - a 960MW Floating Wind Project awarded as part of the ScotWind auctions. That project has already secured grid connection, a necessity which seems to be one of the main concerns most of the ScotWind winners have these days.
The parties are working on the Buchan project with BW Ideol as a third partner. I was lucky to be part of BW Ideol’s unveiling of their strategy for mass production of foundations during the FOWT 2024 event in Marseille. I think that BW Ideol’s plans and commitment to the involvement of assurance bodies shows great promise.
Rumour has it that seabed conditions are challenging at the site but that wind resources are great. I guess time will tell what solutions are pursued in regard to moorings and the general technology solution - it surely is exciting!
One thing the Pennavel project need not worry about is grid connection. RTE will build a jacket-based offshore substation for the project. Also, at least for current projects, we understand that the laws for compensation in the event of disruption to grid are extremely strong in France. This does provide another level of certainty for us as insurers for those pesky CDSU/ CBI scenarios. So, Pennavel, just needs to come with their IACs and hook it up.
It’s hard to not mention the winning Contract for Difference (CfD) price. I have heard criticism about auction parameters as well as the 20-year CFD with 86.45EUR per MWh.
This does, in isolation, sound like a competitive number. It is quite a bit lower than what we see for other projects. We understand that the limit was 140eur/MWh with 10 original bidders and only six progressing to the bidding stage. However, the project is not getting the cost and risk of the grid connection system, i.e. no costs for Export Cables nor Substations; Pennavel is to come with floaters, turbines and IACs. This does take away a decent chunk of cost and uncertainty. Also, CfD offered is robustly indexed to inflation, considering different raw material prices.
And - who knows? - as late as November last year DNV expected a general USD67/MWH in 2050 as a general Levelised Cost Of Energy (LCOE) for floating wind, so Pennavel is perhaps just ahead of the curve.
Current projects in France
This map shows the current projects in France. France perhaps got off to a slow start but they have ambitious plans on both the bottom-fixed and floating sides. They have a long coast and a large population which generally resides along the coast-line.
In Norway, we have a lot to learn from France - and not only in the kitchen.
A06 France – Floating Areas
We are very eager to see what happens next year when AO6 floating areas are being awarded.
AO6 is two 250MW projects in the Mediterranean close to where the PGL, EFGL and EOLMED projects are.
Floating Wind and Oil
Culzean is also a good example by Total Energies in the UK of floating wind contributing to producing fossil fuels in an as environmentally friendly manner as possible. They will test out a new semi-sub design on a 3MW floater.
We at NIORD were very happy to hear the good news of Goliatvind project having been awarded NOK 2 billion from the Norwegian ENOVA.
Goliatvind is to be realized far north in the Barents Sea; Source Galileo Norge, Odfjell Oceanwind and Kansai Electric Power will build five 15MW floaters together, based on the Odfjell Oceanwind design.
Common for the three projects I’ve mentioned is that they will all take advantage of existing infrastructure for the power they produce - either with just requiring limited export to platforms for Culzean and Tampen, or like for GoliatVind where the project will take advantage of the 75MW capacity cable between the Goliat FPSO and land.
In all scenarios, Oil and Gas expertise and resources help enable progress and built competence in floating wind.
Stay tuned for Simon’s forthcoming ‘Hot Topics’-focused ‘What’s going on?’ article in the coming weeks.
