Market possibilities within offshore wind Jon Dugstad, Director Wind & Solar
Founders Government Ministry of Petroleum and Energy Ministry of Trade and Fisheries Ministry of Foreign Affairs Merger of INTSOK and INTPOW Independent non-profit foundation 27 partners/members Trade organisations: Energy Norway Federation of Norwegian Industries Norwegian Oil and Gas Association Norwegian Shipowners Association The Norwegian Confederation of Trade Unions Industry Statoil Statkraft
17 of 27 Norwegian Energy Partners members interested in offshore wind
Offshore Wind a growth market
Annual installed capacity (GW) Cumulative installed capacity (GW) based in Europe! 3,5 3, 2,5 2, 1,5 1,,5, 15,78 MW Installed capacity 4,419 Grid-connected turbines 94 Grid connected sites 1995 1998 21 23 25 27 29 211 213 215 217 18 16 14 12 1 8 6 4 2
Cost reductions quicker than expected.. 18 156 145 16 14 Source: BVG Associates 124 122 12 78 69 68 62 85 65 65 LCOE ( /MWh) 12 1 8 6 4 2 214 215 215 215 215 216 216 216 217 217 217 217 Walney Race Bank extension East Anglia Borkum Horns Rev Riffgrund III Borssele I & II Krigers Flak Sources: BEIS, DONG Energy, Bundesnetzagentur, NEV, Energinet.dk, Danish Energy Agency Borssele III & IV Cluster 1 Triton Knoll Hornsea II Moray 215 216 217 218 219 22 221 222 223 224 225 226 227 228 229 23 Offshore wind NNG (UK) EA1 (UK) Horns Rev 3 (DK) Borssele 1&2 (NL) Vesterhav (DK) Kriegers Flak (DK) Borssele 3&4 (NL) Triton Knoll (UK) Hornsea 2 (UK) Moray Firth (UK)
- has made offshore wind competitive! Kilde: Wind Power Monthly/BEIS
Annual installed capacity (GW) Cumulative installed capacity (GW) Market to 222 Installed capacity end 222: 1 8 Source: BVG Associates 15.% 5 4 Global 46.4GW Major markets: China, Germany and the UK 6 4 3 2 Europe 33.9GW Major markets: UK, Germany, Netherlands, and Denmark 2 1 '18 '19 '2 '21 '22 Europe Asia North America Cumulative Asia 11.3GW Major markets: China, Japan, Taiwan and Korea North America 1.2GW Major markets: The US (east coast) BVG Associates 217
Further growth expected (15-17% p.a.) 14 12 1 GW 8 6 4 2-216 217 218 219 22 221 222 223 224 225 226 227 228 229 23 Europa USA Kina Others
Expenditure ( million) Technology, Supply Chain and Expenditure Global Forecast to 222 3, 25, 2, 15, 1, 5, Source: BVG Associates '18 '19 '2 '21 '22 The rated power of turbines has increased over a 15- year period, from 2MW to 9,5MW with GE to supply 12 GW by 22. Monopile foundations will continue to be widely used. Jacket and gravity base foundations will be used in rocky soil conditions or deeper waters. 66kV array cables were first installed on a project in 217 increasing capacity and reducing electrical losses Move towards 'third generation' jack-up installation vessels to perform lifts in higher wind speeds larger turbines. Project development Foundation Transmission Foundation installation Transmission installation Turbine Array cable Turbine installation Array cable installation OMS SOVs and drones becoming more widely used for larger projects located further from shore. BVG Associates 217
Annual installed capacity (MW) Cumulative installed capacity (GW) The European Market Europe leads globally European Forecast to 222 5, 4, 3, 2, 1, Source: BVG Associates 4.7% 5 4 3 2 1 '18 '19 '2 '21 '22 BE DK FR DE NL UK Other Europe Cumulative Europe has almost 16GW installed capacity at the end of 217 In comparison, rest of world had just under 3GW installed at end 217 By end of 222, anticipated to reach about 33.9GW Main markets after 22: UK, Germany, Netherlands and France BVG Associates 217
Annual installed capacity (MW) Cumulative installed capacity (GW) The Asian Market Asian Forecast Asian Forecast to 222 3, 2, Source: BVG Associates and Renewable Energy Solutions 34.4% 12 8 1, 4 '18 '19 '2 '21 '22 CN JP TW Other Asia Cumulative Asia had almost 3 GW installed capacity at the end of 217 By end of 222, anticipated to reach about 11.3GW Main markets after 22: China, Japan, Korea, Taiwan BVG Associates 217
Annual installed capacity (MW) Cumulative installed capacity (GW) The North American Market North America North America Forecast to 222 1, 75 5 Source: BVG Associates and 157.5% Renewable Resources International 2 1.5 1 House tax bill would reduce PTC credit House Republicans released their tax proposal today, which would reduce the wind energy Production Tax Credit from 2.3 cents per kilowatt-hour to 1.5 cents/kwh. "The House proposal would pull the rug out from under 1, US wind workers and 5 American factories, including some of the fastest growing jobs in the country," said Tom Kiernan, CEO of the American Wind Energy Association. "We expect members of the House and Senate to oppose any proposal that fails to honor that commitment, and we will fight hard to see that wind energy continues to work for America." 25.5 '18 '19 '2 '21 '22 US Other North America Cumulative Report: Northeast could add 8 GW of installed offshore wind capacity by 23 The Northeastern US could add up to 8 gigawatts of installed offshore wind capacity by 23, according to reports from Massachusetts, Rhode Island and New York. "Offshore wind is gaining momentum as a significant new source of renewable energy in markets across the Northeast, and these reports demonstrate that this regional resource will create thousands of new American energy jobs in the process," said Alicia Barton, president and CEO of the New York State Energy Research Development Authority. North America has 3MW installed capacity at the end of 217 By end of 222, anticipated to reach about 1,2 GW Main markets after 22: US (east coast) BVG Associates 217
Emerging markets Rest of Europe Estonia Estonia has a target within its National Renewable Energy Action Plan to install up to 5MW of offshore wind capacity by 218, although as of yet it has no offshore wind installed capacity so reaching this target is unlikely. Finland There are three demonstration projects operating in Finland, with a total capacity of 32MW. In 217, the 42MW Tahkoluoto offshore wind farm was commissioned. The wind farm uses technology designed specifically for icy weather conditions. Ireland In 214, the Irish government published its Offshore Renewable Energy Development Plan setting targets for offshore wind development for 23. Following the plan, Ireland would install a minimum of 8MW of capacity, with medium and high scenarios of 2.3GW and 4.5GW also envisioned by 23. Norway To date, Norway has 2MW of offshore wind capacity installed at the Hywind floating demonstrator project. Poland Two projects announced 2 GW one with the participation of Statoil Polenergia Sweden Slow development but government is preparing the grounds. Grid support by government, merchant project. BVG Associates 217
Emerging markets Rest of the world Australia Before 215, the Government did not support development of an offshore wind industry. The current Australian Government is more favourable towards an offshore wind industry and in 215, Australia's Clean Energy Innovation Fund was established to provide AUD $1 billion to support offshore technologies (including offshore wind) from demonstration to commercial-scale deployment. CIP invested in one project. Canada Currently, Canada has no installed offshore wind capacity. In 216 the government of Ontario, where the majority of Canadian projects are planned to be located, announced it is to keep a moratorium on offshore wind projects until potential environmental impacts are fully understood. India In 215, the Indian Ministry of New and Renewable Energy (MNRE) announced a National Offshore Wind Energy Policy, allowing areas within India's exclusive economic zone (EEZ) for offshore wind farm development. Vietnam Vietnam has almost 1MW of capacity installed in the Bac Lieu offshore wind farm, installed in phases between 213 and 215. A further 1MW is currently under construction at the first phase of the Khai Long project, with the potential for an additional 2MW to be development at the site. BVG Associates 217
Opportunities for the Norwegian Supply Chain Project Management Subsea cables Offshore substation structures Turbine foundations Installation equipment and support services Maintenance and inspection services Vessels and equipment
A Norwegian industry! NOK bn 45 4 35 12% 1% 3 8% 25 2 15 1 5 Norsk markedsandel fra 5 til 1% i 23 Internasjonal omsetning 3-doblet neste 1 år Omsetning nærmer seg 5 milliarder i 23 6% 4% 2% 215 216 217 218 219 22 221 222 223 224 225 226 227 228 229 23 Total 1 largest Norwegian co s Other Market Share %
3% Norwegian content at Hywind Scotland - Engineering of foundation, tower and system - Procurement services - Transportation of foundations - Pre-work for joining turbine with foundation and generators - Towing, anchoring and operations - Static and dynamic cabling and accessories - Safety, verification and surveillance Floating wind first mover advantage
>3 MW of Demos and approx. 7 GW of Large Projects in Dev worldwide 5 Source: Principle Power
International activities 218 International Offshore Wind Partnering Forum - Princeton Taiwan/China 9-13 April FOWT Marseille 25-26 April Solutions for cleaner Energy 3 May - Paris China Offshore Wind Summit 218 mid June Global Offshore Wind Manchester 19-2 June ONS Renewable Market end august Wind Energy Hamburg 25-28 September AWEA Offshore Wind 16-17 Oct Korea Offshore Oct (TBD) China Wind Power Oct (TBD) Offshore Energy Oct Amsterdam
Opportunity is enormous, limited only by our ability to exploit them! Jon Dugstad Director Wind & Solar jon@norwep.com