WindEnergyUpdate: What are some of the key turbine and foundation installation
challenges faced by offshore developers?

Bo Mørup: Skills are definitely an issue; having the right people with the right skill set to install, run and operate equipment.

Vessels are another choke point – we need vessels that are flexible, large, and as versatile as possible. In other words, vessels that could lay cables, as well as install turbines and foundations – that would be ideal. This would facilitate a full-year build, rather than trying to achieve everything in one season.

You need a margin, so as to do things in parallel. If you had two vessels working in tandem, one laying cables, one installing turbines, you could switch between the activities as and when you need. Currently, however, there are no vessels that are capable of doing this. I’d like to meet the engineer who instead of saying ‘we can’t’, instead explains how it would be possible.  That kind of versatility in a vessel would drive up efficiency and drive down costs.

Another key issue is safety awareness. At present, safety awareness of the companies and contractors we are working with is for the most part simply not adequate. Our Vestas people work to strict vessel safety rules – and ours always seem to be stricter than those of the offshore sub-contractors.

WindEnergyUpdate: Is it likely that Vestas will invest in designing and building its own vessels?

Bo Mørup: The supply chain is evolving, but slowly. We’ve got far more experience in doing this in overall terms than anybody else – we’ve probably made more mistakes than anybody else in the industry! Based on that I wouldn’t rule out the possibility of Vestas at some point engaging more directly in the supply chain.

WindEnergyUpdate: What are the main issues relating to offshore turbine maintenance?

Bo Mørup: When it comes to operations and maintenance, there is no ‘one-size fits all’  - O&M solutions tend to be very much project dependent. Some of the Round 3 developments will require a very different approach to anything we’ve seen so far.

When it comes to safety, how do we do it? For the most part, you keep your personnel onshore, but it still remains that access, egress and work in the turbine itself is potentially dangerous and that risk needs to be managed.

WindEnergyUpdate: What maintenance strategy should operators have in place to minimize failure and downtime?

Bo Mørup:  We work on ‘bundling’ our offshore visits to carry out O&M tasks, to minimize the number of visits and consequently the time spent offshore. Unless it is critical, we don’t go offshore outside of scheduled visits.

Also, turbines need to be as reliable as possible. You need to build in redundancies so that one component alone cannot stop the turbine – so that the turbine will work despite component failure.

So you need to increase reliability, whether it be through the design of the turbines, or the set up of the wind farm.

Hotel vessels are used to minimize transfer time, given that waiting around reduces the efficiency of crews. Your crew will never be 100% after five hours of being thrown back and forth in a RIB (rigid inflatable boat). 

When it comes to the larger wind farms, customers need to look at the cost of energy over the lifetime of the contract. Too many developers buy turbines and benchmark on CAPEX/MW or their investor return over the first five years. Instead, they need to be looking at the levelised energy cost over the entire period.

We’ll see turbines offshore with a lifespan of 25 years or more. But it is the components that are the wear and tear parts.

WindEnergyUpdate: In that case, is it better to opt for a direct drive turbine and bypass issues with gearboxes?

Bo Mørup:  There are fewer moving parts when you remove the gearbox, but there is more weight and size to the turbine as it relies on the direct drive. There are also more electrical components that can fail, which presents a big problem when you are trying to build in redundancies. Direct drive is nothing new and the majority of manufacturers are sticking to gearboxes.

WindEnergyUpdate: You mentioned that developers are overestimating their return on investment. What is a more accurate method for calculating the ROI of a wind farm, in your view?

Bo Mørup: We would like customers to look at not only the availability of turbines – but the availability in correlation with when the wind is blowing.

We call this “Yield” and the inverse value for Lost Production Factor. Yield represents the percentage of kWh’s generated compared to the maximum number of kWh’s that could have been generated given the actual wind. So if the yield is e.g. 98.4%, the lost production factor is 1.6%.

In other words, the availability may have been relatively low but the yield was high because the turbine was down during periods without wind. We need to start looking at things in a different way, by looking at lost revenue. In order to make good on your investment, you need to maximize output.

When looking at an investment opportunity, you shouldn’t focus exclusively on driving down your capital expenditure, you should instead focus on maximizing the revenue generated by the wind farm. In essence, you need to be looking at your tariff, the amount of wind, and the wind farm’s yield.

WindEnergyUpdate: Following the recent demand shock, has Vestas geared itself to become more demand responsive?

Bo Mørup: Like everybody else, we felt the slump in the market. As for financial targets for Vestas, Vestas has set its ambitions on a capacity build-out of 10,000 MW in 2010, so we are very optimistic about the turbine market.

We are ramping up in anticipation of market demand and we’ll be very well prepared.

WindEnergyUpdate: What kind of knock-on effect will high iron ore prices have on the wind turbine manufacturers?

Bo Mørup: Iron ore prices directly impacts manufacturers. When the Chinese last drove the steel prices sky high, the market allowed the manufacturers to pass the cost onto the buyers. Back then, turbine prices went up between 30%-50% in two years.

At this stage, it is too early to say what the impact will be – it takes a while to see transparency in the price impact.

In the longer term, all material prices are likely to climb, including oil and aluminum prices, which at the end of the day, just makes wind more competitive, as these price hikes on materials influence conventional energy production even more.

To respond to this article, please write to the editor:

Rikki Stancich: rstancich@gmail.com