Bent Christensen, Senior Vice President at DONG Energy
Wind energy generation is now a mature technology, but is evolving. In a few words, where are the biggest breakthroughs likely to be?
We have now taken the next step in terms of turbine capacity with next generation turbines over 5 MW. I think that this is where we have seen the greatest and most visible breakthrough. I’m certain that within the next 5-10 years we will see the next surge of even bigger turbines, probably in the range of 8-10 MW.
Capital expenditure for offshore is twice that of onshore. What will be needed to bring the costs down?
DONG Energy has set an ambitious target of less than EUR 100/MWh for the cost of energy for offshore wind projects that will be decided by 2020, which is equivalent to a cost reduction of approximately 40 per cent, compared to today’s off-take prices in the UK.
The cost reduction will require a well-known and stable environment for investments, as well as a market of a certain size that will allow us to utilize economies of scale across the value chain.
Throughout the first 15 years of offshore development we proved the concept of developing, constructing and operating offshore wind farms. This was followed by five years of driving the developments in the offshore industry. New standardized solutions, framework agreements for key components such as turbines and foundations and an optimised logistic set-up and project execution have been some of the key elements.
The next step for us is to utilise the competences we have built up throughout the last 20 years. These are competences that have made us the market leader in offshore wind. We will install the next generation of turbines, develop new cost-effective foundations, enter framework agreements and continue to improve our processes across the markets where we are active in developing, installing and operating offshore wind farms.
The use of permanent magnets in turbines has a number of advantages, but carries risks, such as the availability of rare earths, presently mostly concentrated in China. How do you think the risks and advantages can best be balanced out?
The use of permanent magnets has some advantages, but alternative solutions can be put in place if necessary.
The trend in the EU for offshore wind farms is “further and deeper” (though not in Germany). What are the advantages and the challenges? And is this trend likely to continue?
Going forward we can see that at least a large part of the UK’s “Round 3” projects are to be built further from shore and in deeper water. I think that this is a trend we will continue to see, as the easiest projects closest to shore and in shallow water have been or are going to be built first. However, the potential further from shore is really big, as the wind resources are somewhat higher there.
How important is spatial planning in future offshore scenarios?
The entire process of planning has been and will continue to be a key part of the development of the project. The sooner you have your park running the sooner you’ll see revenue from it. From that perspective a smooth planning process, where you have taken into account every part of the process, including risk mitigation, is key.
At present. thinking is based around the unit of the turbine. But there is talk of a shift towards “wind farm thinking”. What difference would this make to future developments?
I think we have already seen this development. Today we don’t think of either turbines or single projects as the centre of the planning work on our pipeline of projects. We look at the entire pipeline of projects and see how they fit into our scope of resources, budget, the supply chain etc.
Dong has recently installed a 6MW offshore turbine. 8 and 10 MW turbines are also being developed. Is there an upper limit? What are the main constraints?
I don’t think we have seen the limit of capacity yet. We already know that several manufacturers are working on 8-10 MW turbines. But looking at the potential offshore, I can’t really see arguments for not working beyond that capacity if it can be done in a cost efficient way that will drive down the cost, along with increasing power production.
The European Wind Industry Energy Association has set a target of 230 GW of installed capacity in Europe by 2020 and 400 GW by 2030. Are we on target?
I think you need to address that question to the European Wind Industry Association.
In DONG Energy we have set a very ambitious target where we will install a total of 6.5 GW by 2020 compared to the 1.7 GW we have installed today. With that target we want to quadruple our offshore wind capacity within the next 7 years.
With fossil fuels like shale gas getting cheaper, is investment in wind technology threatened?
There’s no doubt that the cost of energy for offshore wind needs to be reduced – for a lot of reasons. It needs to become competitive with other energy technologies if we are to utilize its full potential. And I’m certain that it will, as offshore wind is one of the key technologies in the fight against climate change and, to fill the gap, several EU member states are facing a lack of capacity in the years to come, as conventional power plants are taken off stream, while there will be increased demand for energy in general.
How important are feed-in tariffs to continue to help wind energy remain competitive?
The history of onshore wind shows that cost reduction will happen as the industry matures. And some of the best located onshore turbines are already competitive, compared to other energy technologies. We believe that offshore wind will follow the same cost development as onshore wind. But the sector needs to continue to build and to learn if we are to reduce the cost of energy. And for this, the sector will need a stable regime and long term targets to mitigate the risk of future investments.