Q&A: TetraSpar inventor Henrik Stiesdal talks floating wind markets
Floating wind power has been labelled the "next frontier" in the energy transition.
Cabling is set to be laid this week off Stavanger, Norway for the TetraSpar floating wind turbine demonstrator backed by investors like Shell, German energy company RWE, Japanese utility TEPCO, and supported by Bill Gates' Mission Innovation initiative.
The project, which seeks to solve floating wind's manufacturing cost barriers, is the brainchild of Henrik Stiesdal, a pioneer in the wind turbine industry for 45 years creating technology for both Vestas and Siemens, and now CEO of Danish climate technology company Stiesdal. Net-Zero Business Daily spoke with Stiesdal in early August about potential markets for TetraSpar.
Net-Zero Business Daily: What are the initial markets for floating wind?
Stiesdal: The expectation is that bottom-fixed [turbines] will go up out to about 60 meters and floating will commence [in depths] somewhere around 50 meters and be able to go out to whatever. There are plans for floating projects at up to 2,000 meters, but of course, the initial market will be where it's cheapest, and it's cheapest around 100 meters or 200 meters.
Typically, 60 meters is the upper limit for bottom-fixed foundations. You have oil and natural gas installations in deeper waters, you could also do offshore foundations for wind turbines in the same way jacketed foundations [for offshore oil and gas platforms] are done, but they will become prohibitively expensive.
Net-Zero Business Daily: What are the potential markets for the TetraSpar floating wind turbine?
Stiesdal: Not Denmark. The cradle of offshore wind is not a market for the next step, because there is simply way too much shallow water to need floating wind. Norway and Scandinavia are markets big time. Scotland, Ireland, and England have quite substantial areas that are good for bottom-fixed, but if they want to reach their ambitions, they are going to need floating.
France, big time, because France cannot at all meet any big expectations on offshore wind with bottom-fixed. Spain and Portugal, also big time, even though the current market conditions are not very conducive to offshore wind. Ultimately, they can become significant markets. Then in the Mediterranean, Italy and Greece, where realistically you can only build floating wind, are obvious candidates.
In the broader context, the classical markets are South Korea, Taiwan, and Japan, because again they can do some bottom-fixed, but if they want to get to the level of penetration that they would like to, it will require floating. And then, of course, markets like the US, where on the West Coast, there is no way they can do bottom-fixed, it just gets too deep too soon. On the East Coast, they can do huge amounts of bottom-fixed, but many of the leases that are being bid for now are actually inclined slopes, so it's convenient to do bottom-fixed at one end closest to shore, and then it is very questionable to do bottom-fixed, so you are more or less into floating at the deep-end of some of the leases.
When we look at the market, we think in the first instance of Scotland, then we think of France, we think of Italy, and then we think of South Korea, Taiwan, and Japan, then at a later date, California and the West Coast of the US.
Net-Zero Business Daily: What factors cause floating wind turbines to cost so much right now?
Stiesdal: There are several factors, and the most important one is that floating turbines are not properly industrialized. Wind power has become very, very cheap. Solar power has become very, very cheap. And the interesting thing, when you work with research as I do, is that you tend to emphasize the impact of higher efficiency. But the most important single factor for cost is industrialization, mass production, and systematic application of repetitive processes.
Net-Zero Business Daily: Can you give an example of how manufacturing costs play into the levelized cost of energy (LCOE)?
Stiesdal: If you take solar panels, the first time I saw a full-blown sort of real solar farm-like panel was 43 years ago, in the US, at a place called Sandia National Laboratories that was one of the old nuclear bomb facilities from the Second World War. At some point, [Sandia's leaders] discovered that there were other things in the world than nuclear bombs, and started looking at energy and then wind big time in the US in the [1970s].
I was interested in wind, but I could also not help discussing the solar panels they had. At that time, they cost somewhat over $100 per watt, and now they cost somewhat less than $1 per watt, but the fundamental technology is the same. It's not done in batch production in Silicon Valley, it's done in big, automated factories in China. The same goes for the turbines. They used to cost, in today's money, several million dollars per megawatt. Now, they cost you $700,000 per megawatt. That means that one of the strongest levers for getting the cost down is mass production.
When it comes to floating foundations, it is as if we have taken the practices of shipbuilding or the offshore oil and gas industry and applied it to do these floating structures, and this is not mass production. That is why we are putting a highly industrialized piece of equipment, the wind turbine, on top of something is not industrialized at all and that is the main cost driver. In our project, we try to change that.
The other reason for industrialization is that floating wind is still a new field of application, even though it is now 12 years ago that the first floating turbine was commissioned. It is still fairly new, and that means that there are many risks. People working in this field need to be careful about those risks and need to have safety margins.
And then thirdly, when it comes to the surrounding elements like marine operations, warning systems, cable systems, and so on, they're also not industrialized. So, we are simply at a different stage of the development. And it will go the same way as it has gone with onshore turbines and as it is going with bottom-fixed offshore wind: the prices will come down as the industry matures.
Net-Zero Business Daily: How does manufacturing of foundations for TetraSpar differ from other floating wind turbines' manufacturing?
Stiesdal: In our project, we're simply trying to leapfrog the development stages by demonstrating that you can actually industrialize foundations by applying the same methodologies you do in offshore wind turbines. So, where traditionally you would build them for oil and gas in shipyards or fabrication yards, we built them like you build offshore wind turbines, which means that everything is made in a factory, then in the port the pre-made components are assembled, and that is the only thing that happens in the port. You do not do any manufacturing or welding in the port. And that is why we are different than the mainstream.
The demo unit we are speaking about here was manufactured in the biggest wind turbine tower factory in Denmark. To be quite frank, we are simply parasites on all the learning they did on towers. They are doing modules for the floaters that look like tower modules, and that means they were easy to do for somebody who has done thousands of tower modules.
The trick is that you use a tower factory. That is what will happen if we go to other countries. Then it would be the local tower manufacturer who will do the components. Wind turbine towers are a highly industrialized set of equipment that has been refined over decades. Now you have a number of factories that are competing neck-to-neck on cost and quality, and that means that all the benefits of serial manufacturing are already there.
Net-Zero Business Daily: Apart from the manufacturing, what is the main design element making TetraSpar unique?
Stiesdal: At the end of 2014, I retired from Siemens Wind Power, but wanted to do something else, something difficult, and one of the difficult things was that you have a special floating wind turbine configuration called a spar that has the best dynamic behavior. So, in that way, it's attractive, but the problem is that, because it has the center of gravity way below the center of buoyancy, it tends to have a very big draft. So, if our floating wind turbine is big, 100 meters, you simply cannot take it out of a normal port, because no port is 10 meters deep. … Then I figured out what you could do is have your big weight lifted when you were in the port, and when you sail out to where you want to be, you could lower the weight, ballasted. Then you have your spar, but you could take it out of a normal port. That is the challenge I addressed with this concept. There are two new things with this: One is the industrial manufacturing, and the other is this keel that we can lower to get stability. That is what we are demonstrating in the demo unit up in Norway.
Net-Zero Business Daily: What do you think of the floating wind tenders, for example in Scotland, and regulations?
Stiesdal: National government regulators should heed the advice of people who have tried out various structures, because they are not all doing the tenders in the right way. The most important single factor for making floating wind happen is stability if you are a market emerging on your journey with offshore wind and you have not really done much before. One of the most important ones is that there is a policy, and bidders can trust that things will happen as you say, and that your regulatory arrangements are stable.
The other thing that you need is an offtake arrangement. So, there is a system that can take your power, because to be commercially viable, offshore projects tend to be big and they need to be able to export power to a point of connection on this shore, and there is actually a working connection that is able to distribute the power and get rid of it at a decent price.
And thirdly, you have something we call a "one-stop shop," where there is one regulatory body that is offshore wind developers' connection point. In Denmark, it is the Danish Energy Agency, and [the equivalent] under the energy department in the UK is the Crown Estate.
The one-stop shop means that if you need to speak about your permit, or the leasing process, or what to do with the fishing interests, there's always one player in the game, whereas in other countries, offshore wind developers have been active with 20 or 30 different regulatory bodies, and the burden of that is just too large. Properties may get built, but it's not very attractive.
These are very important: stability, offtake arrangements, and the one-stop shop setup. What I say may sound obvious, but it is actually not obvious. People tend to think about other things coming ahead of this—local supply chain, stuff like that. But these are the most important things in my opinion.
Then, of course, you need to be able to able to navigate—with the support of your one-stop shop—the interests of other stakeholders, because there are many stakeholders when you go into the sea territory. There are the obvious ones, like the fishing interests and the shipping interests. There are also very often military interests, and you need to be able to navigate environmental players, and so on. And stakeholder management is very much favored by having a system with this one body that knows what needs to be addressed and can help you with addressing it.
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