RESEARCH REPORT

In brief

In brief

  • Significant advances into siting, developing and running offshore wind farms continue to help drive down costs and improve profitability.
  • At the same time, accelerating investment and growing scale are increasing the value at risk for offshore wind operators.
  • With this backdrop, we believe it is the ideal time to bring new data-driven approaches to manage the full lifecycle of offshore wind farms.


A promising industry emerges, but there are challenges

Offshore wind is set to be a game changer in the future energy mix. With site-consented capacities now increasingly counted in multiple gigawatts, offshore wind farms represent the mega-plants of the 21st century.

Offshore wind farms are now being developed without subsidies and with increased capabilities that can help to address grid balancing challenges. It is now more realistic to envision a future in which offshore wind supplies more than a quarter of global power needs.

The maturity of the industry differs greatly by market, with countries like the United Kingdom, Germany, China and Denmark leading the way in current capacity. Stated policies will drive significant buildouts in other European countries, the United States and several Southeast Asian countries. With suitable, accessible seabed space relatively abundant compared to onshore sites for competing technologies, there is significant room for decades of continued growth.

The offshore wind market is projected to triple in capacity between 2020 and 2025, and this is just the beginning.

New approaches for profitable development, execution and operation are required

A distributed power plant with more than 100 ocean-based turbines makes offshore wind an extremely complex and potentially risky renewable generation technology. However, a new offshore wind site can also represent billions of dollars in lifetime value. Success depends on securing optimal sites at a feasible price, seamless delivery and managing operational complexity.

We see three keys for success:

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.

Revealing value in offshore wind

Offshore wind projects are unique in their scale, complexity and lifecycle. Based on experience supporting market development, construction and operations, we see significant opportunities to reduce risk, optimize operations and, ultimately, improve profitability.

Accenture has more than a decade of experience working with providers throughout the lifecycle to identify key business imperatives and provide precise appropriate solutioning. An end-to-end suite of assets and accelerators, deep industry knowledge, global delivery capabilities and close partnerships with key players allow us to quickly target opportunities and help create lasting value for offshore wind programs.

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