English Who we are What we do Our projects Resources News & events Contact Insights Zoning in on Net Zero: Driving the winds of change in offshore wind 27 October 2021 Hannah Evans Manager, The Carbon Trust David Plunkett Associate, The Carbon Trust The latest blog in our series ahead of COP26 looks at offshore wind – a success story in the low carbon world – and explores how we can scale up to meet the challenges of climate change and accelerate the move to a decarbonised future. Share In 1991, Vindeby Wind Farm became the world's first offshore wind farm. Located off the coast of Denmark, it had enough capacity to generate power for 2,200 homes.1 Fast forward 30 years, and both the number and size of turbines in a wind farm has increased, with the latest farms capable of powering millions of homes. For example, the 14 megawatt (MW) turbines planned for the Dogger Bank wind farm off the north-east coast of England can produce 31 times more power than each turbine at Vindeby, and each blade is taller than London’s Big Ben.2 Once completed, the 3.6 gigawatt (GW) wind farm is expected to generate enough electricity for six million homes.3 Globally, the potential output of the world’s offshore wind farms now stands at 35 GW, 7,000 times greater than Vindeby’s capacity. And almost a sixth of that global capacity was installed during 2020 alone. This incredible success story is no coincidence. It is the result of strong government, industry and public desire to progress the sector as a new form of power generation. Technology innovations and advancements, improvements in the supply chain, reduced risks and policy certainty have made offshore wind farms an attractive proposition for investors and delivered substantial cost reductions in a very short timeframe. This is apparent when comparing the 'strike prices' – the price paid to the wind farm owner for each unit of power generated. Between 2015 and 2019, the strike price dropped from £120/megawatt hour (MWh)4 to £40/megawatt hour (MWh).5 No Net Zero without wind Despite its incredible growth to date, global offshore wind is a market still in its infancy. To deliver a Net Zero future, offshore wind needs to become the cornerstone of our energy generation mix. But when compared to other technologies such as onshore wind (around 700 GW installed capacity), coal (around 2,000 GW installed capacity), and nuclear (around 450 GW installed capacity), the current 35 GW of offshore wind capacity seems small. The International Renewable Energy Agency (IRENA) has predicted that we would need an installed global capacity of 270 GW of offshore wind by 2030, and 2,000 GW by 2050, if we are to meet the targets of the Paris Climate Accord agreed at COP21 to limit global warming to 1.5 degrees.6 Meeting these targets requires us to install our current global capacity every year for the next eight years and then install 2.5 times that (86.5 GW per year) for each of the following 20 years. This rate of growth is unprecedented for large energy infrastructure projects, and it needs to happen at a time when other forms of low-carbon energy infrastructure also need to dramatically increase capacity. In more mature offshore wind markets, such as the UK and Germany, offshore wind is already a crucial part of the energy generation mix and more capacity is needed to ensure supply of energy keeps up with demand. For example, in the UK many conventional power stations are set for decommissioning – with all coal-fired power stations due to be decommissioned by 2025 and almost all operational nuclear power stations set to close by 2035. This will increase the reliance on renewable generation, namely wind and solar, alongside natural gas to meet energy demand in the relatively near future. In emerging markets such as the USA and Asia, failure to encourage a strong offshore wind market could result in countries missing out on opportunities to participate in the offshore wind supply chain and may even lead to investment in more polluting forms of generation. Overall, scaling up offshore wind globally is crucial but it will be challenging. However, looking back at old predictions shows that both onshore and offshore wind energy have a habit of rising to the challenge and outperforming expectations.7 And so what do we need to do to overcome the hurdles and accelerate the mission to Net Zero? Changing wind speed The challenge for offshore wind is scaling up deployment fast. This will require governments, the offshore wind industry and wider energy sector to work together to deliver technical and scientific innovation and coordinated deployment of the infrastructure needed to reach Net Zero. Together, we need to: Create a strong, country-specific market setting Increase the opportunities in emerging markets It is critical that governments and stakeholders work together to develop a market setting that allows effective deployment and scale-up of offshore wind. An example is by establishing a stable policy landscape to assist stakeholders throughout the project-planning process by developing regimes to allocate seabed and provide investor and developer confidence in site development. Improving coordination between developers, generators and governments, and ensuring the correct balance of intervention, is important in developing a strong market setting. It is critical that lessons learned from existing policy landscapes are brought over to develop new, country-specific policy settings. Connect energy directly to where it is needed most by building coordinated offshore networks The vast majority of wind farms are connected individually via a transmission cable to the nearest point on their country’s onshore grid (a ‘point-to-point’ connection). However, this connection point may not be located close to where the electricity is needed and transmitting this electricity from the onshore connection point to consumers has caused bottlenecks (‘constraints’) on the onshore electricity grid, which means not all electricity that could be generated by offshore wind is actually used. Without investment in transmission networks, this problem will only increase as more offshore wind is built. One proposed solution is to replace new point-to-point links with a coordinated, meshed offshore network which would allow electricity from several wind farms to be transmitted via offshore cables to several different onshore connection points. This coordinated network could reduce the cost of offshore wind by reducing the total length of offshore transmission cable required to connect new wind farms. It could also reduce onshore transmission congestion by transmitting power from a wind farm to an onshore connection point closer to where it is needed, effectively bypassing constraints on the onshore network. Understand the role of offshore wind – take a whole systems approach Offshore wind is likely to be important in several coastal countries but it's location and intermittency can bring with it challenges in terms of integrating it into the wider energy supply. Taking a whole systems approach means considering how different parts of the energy system work together. Complex energy system models can be used to build multiple scenarios of how a country's energy system could transition to Net Zero. For offshore wind, it can provide insights into how much capacity needs to be deployed, and help identify what other infrastructure needs to be in place for offshore wind to deliver maximum benefit to the energy system. For example, storage and flexibility technologies such as batteries or pumped hydro storage will be crucial to the scale-up of offshore wind by mitigating the impact of wind power intermittency and ensuring energy supply always matches demand. Develop a strong, environmentally sustainable supply chain Protect the environment and minimise the negative impacts of offshore wind While offshore wind delivers significant carbon savings by reducing the need for fossil fuel generation, it is still vitally important to minimise the environmental impacts of constructing, operating and decommissioning a wind farm. This includes reducing emissions in the supply chain and minimising the amount of material sent to landfill after decommissioning, as well as understanding and managing impacts on the local environment and wildlife during the lifetime of the farm. Deliver local benefits through the supply chain As mentioned above, delivering 2,000 GW through offshore wind by 2050 will require an unprecedented scale-up of construction. Delivering this will require a skilled workforce and sufficient port and manufacturing infrastructure. As several economies transition away from the production of oil and gas, offshore wind presents an opportunity for a 'just transition' – ensuring workers have access to good quality, skilled jobs in their local area. Continue to innovate Make the most of available wind resources – the role of floating wind To date, the vast majority of offshore wind installed has been fixed to the seabed. This requires shallow waters with suitable seabed conditions. However, Wind Europe estimates that 60-80% of the region's offshore wind potential is in deep water sites – capturing this requires deployment of floating wind platforms.8 While only 125 MW of floating wind has been installed globally to date (enough to power around 60,000 homes), our analysis indicates that 11 GW could be installed by 2030 and 70 GW by 2040.9 This would still be a minority of total offshore wind capacity installed globally, but may be the dominant type of offshore wind in markets with limited options for fixed-bottom offshore wind. As a newer technology, floating wind is currently more expensive than fixed-bottom wind farms, but investment in innovation and pilot projects to test new technologies, coupled with a supportive policy environment, can drive deployment and cost reduction. Build a hydrogen economy – the role of offshore wind Hydrogen is likely to play a role in several low-carbon economies. Hydrogen can be produced from electricity and water using a process called electrolysis. If the electricity used is from a renewable source, the hydrogen produced is commonly referred to as ‘green hydrogen’. Producing green hydrogen is one way of storing energy, and could make use of electricity which would otherwise not be used due to bottlenecks on the transmission grid. Alternatively, the hydrogen could be generated by electrolysers located offshore and then piped or shipped to where it is needed. This could negate the need for an electrical connection from the wind farm to the onshore network, potentially speeding up deployment of offshore wind in areas where it would be difficult to connect to the electricity network. We must ensure that we promote industry-wide collaboration to tackle key technical, economic and regulatory issues. Joint industry practices are a great way to de-risk costly research and development projects by splitting the project cost across many stakeholders, bringing vast expertise from many companies and research institutions together to achieve goals. Making this happen requires investment today, but will enable offshore wind to be delivered cost-effectively and at scale in the future. The past three decades have shown us what can be achieved with a coordinated effort to scale up a nascent industry. We now need to redouble our efforts to continue this progress. How the Carbon Trust can help We accelerate the development of new offshore wind technologies and work with governments and industry partners to inform policy, support technology innovators, identify cost-reduction opportunities and deliver innovation programmes. Our multi-million-pound, multi-year collaborative research, development and deployment (RD&D) programmes have delivered tangible benefits to the industry. In its first decade our Offshore Wind Accelerator contributed to a 15% reduction in the cost of energy for an average offshore wind project. Our Joint Industry Programmes (JIP) are supported by leading offshore wind developers and include: Offshore Wind Accelerator (OWA): The OWA is our flagship collaborative RD&D programme, set up in 2008 with the aim of reducing the cost of offshore wind, overcoming market barriers, developing industry best practice and triggering the development of new industry standards. Floating Wind JIP: The Floating Wind JIP was established in 2016 and aims to investigate the challenges and opportunities of developing commercial-scale floating wind farms. It has delivered over 35 research projects and supported the development of new innovations through technology acceleration competitions. Offshore Renewables Joint Industry Programme (ORJIP): ORJIP for offshore wind was established in 2012 and aims to reduce the planning and environmental risk of existing and future offshore wind through research. It has delivered pioneering studies which have improved understanding of the impact of wind farms on wildlife. The Integrator: The Integrator is a joint industry initiative led by offshore wind farm developers to understand and overcome the challenges of integrating offshore wind into an energy system. Currently in its first year, it aims to help maximise the contribution of offshore wind to a low-cost, flexible, predictable and low-carbon energy future. The Carbon Trust also provides expert insight on a wide range of offshore wind areas including: policy advice; market and supply chain analysis; cost analysis and modelling; innovation prioritisation; technology commercialisation; and energy system modelling (including wind-storage integration) for both fixed and floating projects. We have gained our expertise through our involvement in the pioneering UK and European markets and are now applying it to emerging offshore wind markets in Japan, China, Taiwan and the USA. Scaling up offshore wind deployment is key in accelerating the mission to Net Zero, and the Carbon Trust, which has been pioneering decarbonisation for over twenty years, is an expert guide in making this happen. If you are a government body looking to develop an offshore wind strategy, a developer interested in our established research programmes or simply want to learn more about our work, we would love to hear from you. https://orsted.com/en/about-us/whitepapers/making-green-energy-affordable/1991-to-2001-the-first-offshore-wind-farms 107m blade, Big ben 96m https://www.sserenewables.com/offshore-wind/projects/dogger-bank/, https://www.ge.com/renewableenergy/wind-energy/offshore-wind/haliade-x-offshore-turbine EA1, 2017-18 delivering date, £119.89 /MWh (2012 prices) https://www.gov.uk/government/publications/contracts-for-difference-cfd-allocation-round-one-outcome £39-£41/MWh, delivery dates 2023/24 or 2024/25 (2012 prices). https://www.gov.uk/government/publications/contracts-for-difference-cfd-allocation-round-3-results Referenced in https://gwec.net/wp-content/uploads/2021/09/GWEC-offshore-wind-2021-updated-1.pdf https://windeurope.org/about-wind/history/?category=stats-targets https://windeurope.org/wp-content/uploads/files/about-wind/reports/Floating-offshore-statement.pdf https://prod-drupal-files.storage.googleapis.com/documents/resource/public/FWJIP_Phase_2_Summary_Report_0.pdf Zoning in on net zero: A transition that will take a world of change Zoning in on net zero: Developing flexible energy systems Contact us Get in touch to see how our experts can help you. 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