Offshore Wind Projects See Funding, Research and Cancellations
From advanced floating offshore wind technology to canceled projects, there’s plenty of news to cover in the offshore wind market.
Wind energy continues to attract funding and research. Floating offshore wind development is also gaining interest but still has technical hurdles to overcome before commercial-scale deployment. The U.S. Department of Energy (DOE) is issuing funding to support the development of more reliable mooring systems, while a study from the National Renewable Energy Laboratory (NREL) identifies port expansion needs along the West Coast. Meanwhile, reeling from inflation and interest rate hikes, several offshore wind projects have been canceled to minimize losses.
Portugal’s 25-megawatt WindFloat Atlantic project came online in 2020 as the world’s first semi-submersible floating wind farm. Image used courtesy of Principle Power
Port Expansion for Floating Offshore Wind
A recent NREL study places a significant price tag on the level of port infrastructure investments needed for commercial-scale floating offshore wind projects along the West Coast. The region would need to invest $5-10 billion to develop installation and maintenance ports for building/operating 25 to 55 GW of floating offshore wind on the West Coast. Another $10 billion would fund manufacturing port facilities for the supply chain.
Common floating wind archetypes include semi-submersible, spar buoy, and tension leg platform designs. Image used courtesy of NREL/by Josh Bauer (Page 51, Figure B1)
NREL estimates that 2.8 terawatts of wind energy could power over 300 million American households. Still, this potential is limited by waters too deep for traditional turbine foundations fixed to the seafloor. Compared to conventional fixed-bottom projects, floating platforms address that problem and offer other advantages like less reliance on non-domestic materials and shorter transport distances for equipment.
A significant port expansion is needed to support the West Coast’s floating wind supply chain, complete with manufacturing/fabrication (MF), staging and integration (S&I), and operation/maintenance (O&M). For example, developing one S&I port site could require a $1 billion investment and 10 years.
High-level design requirements for three types of port infrastructure sites. Image used courtesy of NREL (Page 4, Table 1)
To develop a floating offshore wind network, West Coast states would need to update their existing port infrastructure to manufacture and assemble components domestically. Additionally, with sufficient shipbuilding capacity, a vessel fleet can install and service projects along the port network.
Whether floating or not, offshore wind development entails significant resources and engineering time to make the pieces come together. Take this recent example from a non-floating wind project on the East Coast. The soon-to-come-online South Fork Wind farm in New York required several vessels, shipbuilding resources, helicopter operations/maintenance, foundation and substation transportation and installation, onshore cable installation and road restoration, and additional contracts for other aspects of construction. Hundreds of workers across three states helped build the substation itself.
Wind power engineers working on floating wind systems should consider potential West Coast port expansions in testing and scaling their designs, including how floating foundations and turbines will be assembled and transferred from land to water.
Conservative floating wind turbine dimensions to fit port design requirements. Image used courtesy of NREL (Page 50, Table B1)
NREL’s study noted significant uncertainty about the size of wind turbines for West Coast floating wind. With dozens of conceptual designs for floating wind platforms, each with different port requirements, NREL found that port development should consider a broad design envelope based on the largest wind turbine and substructure sizes. For example, the study considered floating wind turbine dimensions corresponding to a 25-MW machine, as outlined in the image above.
Designing Reliable Moorings and Reducing Installation Noise
DOE recently unveiled a $16.4 million program for critical technical research into two aspects of offshore wind power systems. Six to eight projects will receive $6.4 million to explore mooring lines for floating offshore wind systems and marine energy converters (MECs). Another three to eight recipients will get $10 million to research noise reduction for fixed-bottom offshore turbine foundations.
The mooring funding supports the federal government’s goal to add 15 GW of floating offshore wind by 2035, while noise reduction strategies help its 2030 target to add 30 GW of offshore wind without sacrificing biodiversity and ocean co-use.
Tech for Floating Offshore Wind and Marine Energy Converters
Improved mooring design configurations are essential for operating efficient MECs, which draw energy from waves, tides, and currents. MEC providers don’t always have mooring system components built for device stationkeeping. PacWave, a DOE-funded test site for wave energy conversion systems, currently doesn’t own mooring system components for developers to use. The new funding program aims to find the best method to design components for converters tested at the facility.
DOE’s funding opportunity outlines three subtopics and the basic reasoning behind them:
Under the first subtopic, teams will test mooring ropes for fatigue and long-term performance. That includes synthetic and nylon fiber ropes, which are lighter, have better compliance characteristics, and cost less than chain or wire ropes.
Another demand involves sensor systems for mooring condition monitoring, including an instrumentation package for mooring lines that will reduce maintenance/operation costs. The researchers will explore factors like ruggedization and resilience to pressure or corrosion, reliable signal transmission, and monitoring of fiber rope materials and weave configurations.
The third focus is validating shared anchor and mooring array configurations for floating offshore wind or marine energy arrays. Projects will test shared anchor/mooring array models, evaluate failure risks, assess mooring system performance and behavior, and other activities.
Noise-Reduction Methods for Fixed-Bottom Installations
The second funding element targets noise disruptions associated with installing fixed-bottom wind energy systems, aiming to lower the amount of noise generated or propagated.
Monopile foundations are today’s industry standard, installed by impact pile driving into the seafloor. Monitoring and minimizing noise exposure are important because the high intensity and impulsive noise generated by impact pile driving affects a range of wildlife, from sea turtles to whales. Existing practices, including the use of bubble curtains and protected species observers, are meant to limit pile driving noise. However, DOE considers avoidance the best approach, addressing high-intensity noise at the source through using a foundation with less noise generated on installation or adopting quieter monopile installation techniques. Reducing noise propagation is the second step.
More specifically, the program seeks technologies addressing these needs:
Alternative foundation types (suction buckets or gravity bases, for example) and vibratory installation methods or other options quieter than impact piling
Applicants could propose noise abatement tech covering a range of sound frequencies in different environments. This part focuses on limiting noise propagation through the water column and substrate after it’s generated. Projects will demonstrate the efficacy of techniques at <500 hertz.
Data sharing and information synthesis, including existing foundation information, installation methods, and noise abatement systems
What’s With Wind Project Cancellations?
Recent economic headwinds have prompted several offshore wind developers to cancel their power purchase agreements (PPAs) for upcoming projects, citing rising inflation, interest rates pushing up financing costs, and supply chain shortages.
Many developers signed PPAs—which oversee power offtake terms between electricity producers and utilities—before the Federal Reserve stepped up its rate hikes and the war in Ukraine shocked global supply chains. Both events, coupled with rising inflation, introduced major risks across the economy last year. The DOE recently reported that no new offshore wind offtake agreements have been signed between mid-2022 and May 2023.
The fines for backing out of offshore wind PPAs are relatively low compared to the total capital costs, leading developers to take a short-term hit to reduce their overall losses.
The latest example saw Avangrid, the U.S. arm of Spanish utility giant Iberdrola, agree to pay $16 million to terminate contracts with Connecticut Electric Distribution Companies for its 804 MW Park City Wind project. Record inflation, supply chain pressures, and high interest rates made the project “unfinanceable” under the existing agreements awarded in 2019, according to Avangrid, who plans to rebid the project at a later time.
The decision comes months after Avangrid paid $48 million to terminate the PPA for its 1.2 GW Commonwealth Wind project in Massachusetts, citing similar financial headwinds. Earlier this year, Shell New Energies and Ocean Winds also agreed to pay over $60 million to end PPAs they negotiated in 2022 to build the SouthCoast Wind project off the coast of Massachusetts. In both cases, the developers said they plan to rebid at higher prices in the state’s 2024 procurement round.
BloombergNEF estimates that 9.7 GW of offshore wind projects are in the queue for offtake agreement renegotiation or cancellation—over half the contracted pipeline in four Northeast states. The levelized cost of electricity (LCOE) of a subsidized U.S. offshore wind project has reached $114.20 per MWh this year, up nearly 50% from 2021. Rising capital and operating costs have pushed the LCOE even higher, though the Inflation Reduction Act’s 40% investment tax credit helps cushion some of these impacts.
After raising interest rates to a 22-year high in July, the Federal Reserve has signaled another hike could be coming before the end of 2023. Offshore wind developers are currently calling on regulators to incorporate inflation adjustments into their power offtake contracts to reduce financial risks.
The U.S. offshore wind project pipeline by status (as of May 2023). Image used courtesy of DOE (Figure 1, page 13)
These trends aren’t isolated to the offshore wind market. Earlier this year, EE Power covered similar economic pressures hitting small modular nuclear reactor projects.