Offshore wind: The mega-plant of the 21st century

From the onset, developers face greater competition for sites with the ideal characteristics particularly in relation to wind, shore proximity, soil composition, seabed dynamics, water depth, environmental concerns and local governing regulation. To acquire development rights, strong case planning and modeling needs to be applied in an environment where empirical data on everything from asset lifetime, cost base, availability performance and asset integrity remains sparse. As a result, whether they know it or not—many developers are currently taking on more risk on their binding investment decisions.

Around 40% of the lifetime costs of an offshore wind farm are invested during the execution stage. Developers face considerable pressure to deliver these large infrastructure projects on time and within budget while also adhering to strict scope, environmental and quality requirements. Enhancing and managing every step of development is critical to get the most out of full project economics and confirm on-time efficient installation.

Many offshore wind farms struggle to consistently operate profitably and within defined operating budgets. They are hindered by issues with production underperformance, operational cost overruns and unforeseen serial defects on turbines and balance of plant. With the increase of non-subsidized assets in operation, merchant risk is likely to join the list of key operator concerns. As turbines, wind farms and portfolios continue to grow, so will operators’ focus on verifying high revenue-based availability addressing key total cost contributors and intelligently managing more complex generation portfolios.