In September 2017, a small but significant chapter in the history of renewable energy came to a close. Working with small boats and a mobile crane, engineers from Danish energy company Ørsted dismantled the last of the 11 turbines that had formed the world’s first offshore wind farm.

Sited in shallow water near Lolland in southeast Denmark, the Vindeby site was built in 1991 to test the viability of offshore wind power generation. At the time, there was widespread skepticism that operating turbines in the sea would ever be economically viable. Now, 27 years later, the tide has turned firmly in favor of the once radical approach.

Compared to today’s technology, the Vindeby turbines seem almost comically small. Each machine had a nameplate capacity of 450 kilowatts, with rotors 35 meters in diameter. And each one was erected in a single day. By contrast, the MHI Vestas V164-8.8MW turbine, installed earlier this year at Vattenfall’s European Offshore Wind Deployment Centre (EOWDC) in Aberdeen Bay, Scotland, is almost 20 times as powerful. At 164 meters in diameter, its rotor is larger than the London Eye. At their highest point, the rotor blades spin 191 meters above the sea. Installing the foundation of the turbine required the use of the 25,000 metric ton Asian Hercules III, one of the world’s largest floating cranes.

The new turbine, the first of a pair under construction at the Aberdeen site, is unlikely to hold the title of “world’s most powerful” for very long. MHI Vestas is already building an upgraded 9.5 megawatt version of the design, destined for the Northwester 2 wind farm off the coast of Belgium. Meanwhile, GE’s wind energy unit has developed the Haliade-X, a vast 12 megawatt machine with a 220 meter diameter rotor. The U.S. engineering company has signed an agreement with the U.K. to test the new turbine off the coast of Northumberland.

HEAVY LIFTING: The massive Asian Hercules III crane installs a wind turbine foundation off Aberdeen Bay.

A big industry too

Offshore wind has moved well beyond the technology demonstration phase. By the end of 2017 there were 4,149 grid-connected wind turbines operating in Europe’s waters, with a total capacity of almost 16 gigawatts. According to trade body WindEurope, 623 new turbines were erected in 2017, an all-time record. Across the continent, 11 wind farms are currently under construction, all of them in either German or U.K. waters. And the industry signed off on a further six new projects last year, which will add 2.5 gigawatts of additional capacity at an estimated cost of €7.5 billion. WindEurope expects total installed offshore capacity in Europe to pass the 25 gigawatt mark by 2020.

The geographical distribution of offshore wind energy tells an important story. Today, 84 percent of global installed capacity is in Europe, and just two countries – the U.K. and Germany – account for 60 percent of the world total. In part, that’s because physical conditions are favorable. Both countries are wealthy, densely populated and sit alongside the shallow, windy North Sea.

Policy also plays an important role. Until now, offshore wind investors have relied on subsidies, often in the form of long-term power price guarantees, to reduce the significant risks involved in such complex, large-scale projects. However, that situation is changing rapidly. Bigger, more efficient and more reliable turbines, and the industry’s growing maturity, have halved the price of offshore-generated power over the past five years. When the U.K. auctioned 15-year subsidized power contracts last year, two offshore wind projects won their bids with a guaranteed price of £57.50 ($75.40) per megawatt hour, only £5 ($6.50) more than the expected commercial wholesale price of energy over the contract period.

TALL ORDER: The offshore building boom has created some formidable logistics challenges.

That price surprised market analysts, who were expecting the developers to demand around 50 percent more. It also makes offshore wind cheaper than new fossil fuel power plants when the cost of carbon emissions permits is taken into account. In Germany and the Netherlands, offshore projects with no direct subsidies were agreed for the first time in 2017.

“The share of global energy demand met by renewable sources is expected to reach 18 percent by 2035,” says Steve Harley, President, Energy, DHL. “Offshore wind power is going to be a very important part of that transformation. Offshore turbines enjoy favorable wind conditions, which translates into higher capacity factors. Going offshore makes it easier to find sites for larger arrays and bigger turbines. And the industry has been able to scale up output and bring down costs much faster than originally expected.”

The world takes note

The plunging price of offshore wind energy is encouraging development further afield. China built 18 offshore wind farms in 2017. The country now has almost 2.8 gigawatts of installed capacity, making it the third most important single offshore wind market. Analysts with Bloomberg New Energy Finance (BNEF) predict that China will overtake the U.K. to become the market leader for new installations by 2022. In April, Taiwan announced the winners of an auction for the right to install 3.8 gigawatts of offshore wind capacity, part of a plan to increase offshore generation to 5.5 gigawatts by 2025. The U.S. has only one commercial wind farm in operation today, but a further 28 are in development. Overall, BNEF expects the world offshore wind market to grow at 16 percent a year until 2030, when total installed capacity will reach almost 115 gigawatts.

Advancing technology is helping to open up the global offshore wind market too. Hywind Scotland, a joint venture between Statoil and Masdar, is the first commercial wind farm to use floating turbines. The five-turbine facility, which went online in late 2017, has had a successful first winter, surviving hurricane-force winds and eight-meter waves while delivering output at the upper end of expectations. Floating turbine technology is important, since it allows the installation of offshore wind farms in water of any depth, enabling the exploitation of wind resources in regions that don’t have the benefit of shallow seas. According to Statoil, up to 80 percent of the world’s useful offshore wind resources are in waters more than 60 meters deep, where foundations for fixed turbines would be prohibitively costly to build

SPECIAL DELIVERY: Offshore building has required the development of new processes and supply chains.
The share of global energy demand met by renewable sources is expected to reach 18 percent by 2035.Steve Harley, President, Energy, DHL

How to move mountains

The offshore building boom has created some formidable logistics challenges, however. It has required the development of entirely new processes and supply chains, even in areas like the North Sea with decades of experience in large-scale offshore engineering. “There are significant differences between offshore wind and the oil and gas sector,” says Nicolai Andersen, Global Sector Head Renewable Energy, DHL Industrial Projects. “In oil and gas, logistics involve some very large components along with many smaller items. In wind energy, everything is out of gauge.” Shifting huge turbine components from the factory to the onshore construction base is challenging in itself, he adds. “The nacelle of a large modern wind turbine can weigh 400 metric tons and blades can be 80 meters long. Moving components like that even short distances by road is difficult and costly, so original equipment manufacturers (OEMs), are increasingly moving their factories to port locations, allowing parts to be transported by sea, either on deck carriers or heavy lift vessels.”

Then there are scheduling challenges. The huge cost of the special jack-up vessels used to install turbines means owners can’t afford to have them idle waiting for components to arrive. “At the same time, there often isn’t much storage space at the quayside, so you have to deliver just in time,” says Nicolai Andersen.

The industry has worked hard to optimize its logistics capabilities in recent years and its success is one reason why costs have fallen so fast. Manufacturers have developed standard logistics processes, and they’ve restructured their manufacturing networks to reduce transport distances.

UP AND RUNNING: A technician works inside the rotor head of a wind turbine

Companies have also built new partnerships with specialist logistics providers. DHL, for example, has established three Regional Wind Competence Centers around the world. Morten Andersen, head of the company’s regional competence center in ­Copenhagen, explains: “Our centers bring people with specialized knowledge of offshore wind logistics together with commercial teams and regional logistics experts. That’s vital because logistics projects of this complexity depend on local knowledge as well as industry expertise. You need a proactive presence at the quayside.”

And the complexity is set to rise. Europe’s offshore wind industry is keen to grasp new export opportunities as the global market expands. That may require new long-distance supply chains. Meanwhile, regions like Taiwan and the U.S. will need to develop their own logistics capabilities very quickly. “In Europe, the industry started with small turbines and applied what it learned as the machines became bigger,” says Harley. “In the rest of the world, they will be installing the very largest turbines from the outset.” Jonathan Ward

Published: September 2018

Images: Luca Locatelli/INSTITUTE; Vattenfall; Ashley Cooper/Getty Images; Adobe Stock; Jan Oelker/Agentur Focus; Ulrich Baumgarten/Getty Images; DHL