Typhoons, Quakes to Shape Asia’s Offshore Wind Projects: BNEF Q&A

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Typhoons, Quakes to Shape Asia’s Offshore Wind
Projects: BNEF Q&A
February 11, 2019

Typhoons, Quakes to Shape Asia’s Offshore Wind
Projects: BNEF

February 11,  2019

Asia’s susceptibility to earthquakes and typhoons will dictate the design and timing of offshore wind projects in the region, according to Andreas Nauen, chief executive officer of the offshore business at Siemens Gamesa Renewable Energy SA.

“Asia will have to go through the learning curve of making harbors appropriate for loadouts [strengthening quaysides for heavy loads, ensuring proper depth for vessels, proper cranes etc.], that kind of thing,” Nauen said. “We don’t have earthquakes in Europe normally as a requirement when designing turbines and projects. For Asia, all of these special elements that go beyond the turbine need to be developed.”

Despite the risks associated with developing wind projects in a region battered regularly by high-speed storms and deadly seismic activity, the market for offshore projects is set to surge.

Cumulative offshore wind installations in China, Japan, Taiwan and South Korea are expected to jump 16-fold to about 64 gigawatts in 2030 from about 4 gigawatts at the end of 2017, according to a recent report from BloombergNEF. China, alone, will have almost 40 gigawatts of offshore wind capacity in the next decade, BNEF said.

To meet the needs of its customers in Asia, Siemens Gamesa has already tailored one of its turbines for typhoons, Nauen said. Last month, the company unveiled a 10-megawatt turbine model that it hopes will be market-ready in 2022. The SG 10.0-193 DD has a 193-meter diameter rotor and annual energy production 30 percent higher than previous model SG 8.0-167 DD, according to the company.

The turbine that we just launched “will be applied to projects that come in 2023 and 2024,” Nauen said. “If you look at the time scales in Japan, this is also when the big wave kicks in.”

BNEF spoke to Nauen at the end of January on the sidelines of an offshore wind conference in Tokyo hosted by the Asia Wind Energy Association.

andreanauen

Q: There is a lot of excitement around offshore wind in Asia at the moment. What is your view?

 A: It’s a justified excitement because first the natural resources in Asia are good, whether it’s the Taiwan Strait or the winds around Japan, India and of course China. All these places have the natural resources that make offshore wind a very viable opportunity. They don’t come at the same time and they do it at their own speed for different reasons. Taiwan has to change its energy system, Japan with its situation over nuclear…all of these markets have to go through an energy transition and they see a lot of opportunity for offshore wind to a different scale, to a different speed but all have now embarked on a very reliable, trustworthy outlook.

Q: BloombergNEF’s latest forecast is for the global offshore wind market to expand sevenfold in the next decade to 154 gigawatts by 2030. Do you agree with that?

 A: It varies a little because there is a lot of optimism

but whether you take that number or our latest, which is over 178 gigawatts by 2030, the distribution says that about 89 gigawatts will be in Europe (50%), 74 gigawatts in Asia (42%) and 15 gigawatts or so in North America (8%). That shows the distribution and also the growth rate.

Q: What kind of demand do you expect in Asia for the 10MW offshore turbine that you just announced? It would seem the market for that size turbine would be somewhat limited, at least at the outset.

 A: It depends on the wind conditions. We have an

[offshore turbine technology licensing] partnership with Shanghai Electric in China and the wind conditions there are different than, say, in Taiwan. We will have different turbines applying to different markets but definitely the SG10.0-193 DD, the turbine that we just launched, will be applied in Asia to projects that come in 2023 and 2024. If you look at the time scales in Japan, this is also when the big wave kicks in.

China is different because everything moves extremely fast. In China, the project schedules are much shorter than in Japan. That’s the way the Chinese do business and, therefore, we will use the 8-megawatt turbine or even the 7-megawatt turbine for the foreseeable future.

Like any other industry, we adapt our products and offerings to suit individual market conditions.

Q: What are some of the challenges you see in terms of wind conditions in Asia that you haven’t seen in Europe. What is unique when developing here?

A: Let’s start from the technical side. You have a very particular combination of average winds speeds and typhoons. Something that requires a special turbine — we call it a typhoon-class turbine — you only need this for Asia. We also have high winds in Europe but the difference between the mean and the high wind speeds is normally not that big, therefore the turbines in Europe will be slightly different. That is something technically very special in Asia and we’ve found a solution for that with the typhoon-class turbine.

On the project side, Europe has been doing offshore wind now for over 20 years. My first project was Burbo Bank, a 90-megawatt project near Liverpool. That seems small now, but it took 15 years to get to the maturity of where we are now and that is the difference between the European markets and the Asian markets. Asia will have to go through the learning curve of making harbors appropriate for loadouts [strengthening quaysides for heavy loads, ensuring proper depth for Typhoons, Quakes to Shape Asia’s Offshore Wind vessels, proper cranes etc.], that kind of thing. We see earthquakes in Taiwan. We don’t have earthquakes in Europe normally as a requirement when designing turbines and projects. For Asia, all of these special elements that go beyond the turbine need to be developed. It just takes a little time but I think there’s a solution if everyone works together.

Q: Can you talk about that timeline in Asia? What are some of the highlights you see on the horizon?

A: The first market that will make it work is Taiwan. We’ve already signed contracts there, we have and will install more turbines beginning this year, we are in the preferred supplier situation for other projects in Taiwan. This is based on a very thorough time schedule that the Taiwanese government has set. There will be the usual ups and downs but the general direction remains.

Japan will come thereafter but that has to do with the approval timelines. If it’s a 3- to 4-year EIA [environmental impact assessment] cycle, you have to start now in order to get to approvals in 4 years. That’s a different timeline than the ones in Taiwan and China markets.

Then you have the Korean market, which has only recently rediscovered offshore. That’s also because costs are going dramatically down.

So I see this sequence among different markets. China is the base, then Taiwan, Japan and then we’ll see. One other country, and this is one that has fascinated me all my life, will be India. India will surprise us. Don’t ask me for numbers for India because it will be different from what we all think.

Q: Can you provide a sense of the additional development costs in Asia.

A: Project development costs very much depend on a lot of factors that our customers have to deal with but I can speak about the research and development costs. From an R&D perspective, we have two major investments that need to be done. One is the technology. We try to develop turbines for global applications and then we adjust. So the typhoon readiness is a variation to a base turbine. It’s not a development from scratch. That limits our efforts in terms of R&D.

The other investment we have is in the supply chain. A lot of work is needed with all the suppliers and then there are markets like Taiwan where the government wants local product [for understandable reasons for local production]. This is the other investment we have to make. It all depends on the speed, the timescale and how much we have to do there.

Q: What are some of the considerations that must go into designing a turbine for typhoon conditions?

 A: One thing is whether the turbine will be able to withstand the typhoon so that involves the loads of the turbine but also the control system. How do you control a turbine when you have extreme wind conditions? That is a mechanical element that goes into it but also a control element.

It goes beyond that. When we talk about installations, you need vessels with supporting legs and so on. If you have a typhoon and earthquake combination, you have to be sure during installation that the operation is safe. How do you do that with appropriate warning time and what are the vessels that can be used under these conditions? That requires extremely close cooperation between the customer, the developer, and between us as the OEM [original equipment manufacturer] and the installation company. This is something we saw in our early Taiwanese projects.

Q: As more experience develops in Asia, how much further can costs come down on operations and maintenance?

A: You have an automatic effect in two ways. Whether it’s a 7-megawatt turbine or an 8-megawatt or soon a 10-megawatt, it’s still a direct-drive turbine with more or less the same number of components so there’s no reason why that should be a linear or an M curve. Just by the normal growth of the turbine, we can reduce the per-megawatt-hour cost of O&M [operation and maintenance].

Then we have an additional development that helps us at the moment and that is that the reliability of the turbines is outstanding and so the number of services that we have to do, the number of trips to the turbine — we have been able to bring those down quite a lot.

The third issue is predicting and digitalizing those services. We now know much better how a turbine performs, the likely failures, whether a service technician really needs to go there. With that combination, we will see a decline in O&M costs. Where they bottom out, we don’t know, but I think there’s still a lot of potential because of these three elements — the scaling of the turbine, digitalization and reliability.

Q: Does Asia then benefit from all the learning that the industry has already gone through?

A: The Europeans will bring their experience, but you can’t apply it one to one. Whatever experience we’ve had in Europe needs to be adjusted to what makes sense in Japan etc. It might take a little longer here because conditions are different but much of the learning can be transferred.

Q: How do you think floating offshore wind will develop in Asia, and particularly in Japan where it seems to dominate the discussion?

A: There are many bottom-fixed projects that will and should be delivered first because they are simply there to be done. The technology is relatively clear, the rules are being defined and they will come about soon.

At the same time, there is of course floating and the consideration is what kind of foundation type is ideal so that it can be mass produced. This is the phase we’re in at Siemens Gamesa. We have a spar-type concept up and running in Norway, we have five turbines of a similar concept in Scotland, we’re working on 10 turbines, again in Europe, more turbines in France, one of these super innovative floaters with Innogy and Shell. The industry is still trying to figure out the ideal floating concept. When that is clear, it will then merge with the project work stream and then floating will take off.

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