Offshore wind is a real success story in the UK and has played a pivotal role in the country’s renewable energy transformation.

We already have 5 gigawatts (GW) of offshore wind installed, which is around half of the total capacity across the world. And with plans for more offshore wind farms and rapidly advancing technology, the UK looks set to continue building on this momentum. The industry is on course to install around 10GW by 2020, at which point offshore wind will supply between 8 and 10 per cent of the UK’s total electricity annually.

Capacity

The UK has a unique offshore wind resource, and energy from offshore wind currently powers the equivalent of more than 2 million homes.

This is all good news for the UK, which is bracing itself to lose around a quarter of its current generating capacity by the end of this decade as existing nuclear and coal-fired power stations are retired through age or inability to meet tough carbon reduction targets. And more than 50 per cent of current capacity will be retired by 2030.

Employment

Not only has offshore wind proven itself as a valuable clean energy resource, the industry has also provided a major boost for the UK economy, creating a range of new employment opportunities. Job creation has gone up year on year in the sector, and shows no signs of slowing down if investor confidence is maintained.

Offshore wind has supported more than 18,000 jobs in total already, and this number has the potential to grow up to 30,000 by 2020.

At Dong Energy, our projects in areas like Barrow and Grimsby are also helping to regenerate these coastal towns, bringing much needed investment.

We have seen other major companies investing too, and the UK offshore industry has been boosted by the news that Siemens, one of the largest global wind turbine manufacturers, will partner with Associated British Ports to build new wind turbine production and installation facilities on Humberside. The combined £300 million investment, spread over two sites, will create more than 1,000 jobs in the Humber region.

Future potential and cost reduction

Of course offshore wind is by no means the whole solution to the challenges facing the UK energy sector – but it does have an important role to play in a diverse mix of generation.

We now need a clear set of policies for post-2020 to give certainty to the industry, but the sector is already adopting a number of strategies to achieve its goals for reducing future electricity costs to make it competitive with other generation technologies.

Lifetime costs for offshore wind have fallen by 11 per cent in the last four years, which is ahead of schedule in delivering the industry goal to target £100 per megawatt hour (MWh) for projects getting the green light from 2020.
Scale is the first step in this drive for cost reduction. The next generation of offshore wind farms will be larger than today. London Array, located in the outer Thames Estuary, is currently the largest offshore wind farm in the world with a capacity of 630MW. But many of the next generation of offshore wind farms will be bigger. Hornsea Project One, which is in our development pipeline, is on track to be 1.2GW – the size of a large power plant.

And it is not just the overall scale of the wind farm. The turbines themselves are getting larger too. Siemens 6MW turbines, with a swept area roughly equivalent to two and a half football fields, are currently in operation at our Westermost Rough offshore wind farm off the Holderness coast. We will be using even more advanced 8MW turbines at our Burbo Bank Extension project, which is currently under construction.

Standardisation is another key factor, and it has been proven in other industries within the energy sector. To help drive standardisation and get the benefits of large order volumes, Dong Energy has signed framework agreements for large numbers of wind turbines.

Around 80 per cent of the components for an offshore wind farm could be mass-fabricated and this will, in turn, give us substantial savings. The same applies to substations which in the past were manufactured as one-offs for each wind farm but will be standardised in the future.

And the final piece of the puzzle is the need to build offshore wind farms faster and more efficiently, while continuing to improve safety standards. The cost of installation accounts for around 10 per cent of the total costs, and offers some real opportunities to bring costs down.

Looking to the Future

Even with the best strategies and practice in place, cost reductions will not be achieved without the support of the entire industry. It will take a collaborative effort to keep driving offshore wind forward and building on the huge success we have already seen. This is both a challenge and a great opportunity to work together to secure the future of this exciting and growing industry.

ABOUT THE AUTHOR

Brent Cheshire serves as DONG Energy’s UK Country Chairman as well as Managing Director for Assets, Country & Stakeholder Management, Wind Power.

FURTHER INFORMATION

http://www.dongenergy.co.uk
http://www.offshorewind.works