Floating Offshore Wind

1. Floating Offshore Wind When Science meets Industry 17 April 2013 Norway

2. Who is the ETI? • The Energy Technologies Institute (ETI) is a public-private partnership between global industries and UK Government • Safeguarding affordable and secure future energy mix • Delivering proof of concept for new energy technologies • Our projects impact economic development

3. ESME Strategic design tool 2020 - 2050integrating power, heat, transport and infrastructure providing national/ regional system designs Setting strategic direction Creating commercial confidence Viable commercial operation • World-class ETI capability in energy system modelling and strategic analysis • ETI Delivery of engineering demonstrations of innovative low carbon energy systems • Focused on the integrated UK energy system – power, heat, transport and associated infrastructure Which energy technologies do we need and when? Innovative technologies, sub-systems and information

4. Energy System Modelling Environment • A national energy system design tool • Distinctive modelling approach • Least cost optimisation (policy neutral) • Focus on the “destination” and backcasting • Probabilistic treatment of uncertainties • Includes spatial & temporal factors • Informed by ETI members/advisors • Internationally peer reviewed

5. The Low Carbon Energy 2050 “first team” • Demand reduction

6. The Low Carbon Energy 2050 “first team” • Demand reduction • Nuclear

7. The Low Carbon Energy 2050 “first team” • Demand reduction • Nuclear • Fossil fuel, with carbon capture and storage • Including gas

8. The Low Carbon Energy 2050 “first team” • Demand reduction • Nuclear • Fossil fuel, with carbon capture and storage • Including gas • Biomass, with carbon capture and storage

9. The Low Carbon Energy 2050 “first team” • Demand reduction • Nuclear • Fossil fuel, with carbon capture and storage • Including gas • Biomass, with carbon capture and storage Provided all technology options are available

10. ETI analysis says Offshore Wind is the main hedging option for 2050 UK energy mix • ETI modelling of 2050 indicates up to 18 GW of Offshore Wind generating capacity would be economic for the UK • Assumes other technologies (e.g. Nuclear, CCS and Biomass) deliver on performance and timeliness

11. Optimised world – UK 2050 All technologies deliver expected cost reduction & performance improvement to cost & schedule Offshore Wind Probability Distribution Generation Capacity probability distribution in 2050

12. ETI analysis says Offshore Wind is the main hedging option for 2050 UK energy mix • ETI modelling of 2050 indicates up to 18 GW of Offshore Wind generating capacity would be economic for the UK • Assumes other technologies (e.g. Nuclear, CCS and Biomass) deliver on performance and timeliness • Need to factor in current market momentum • 10GW of Offshore Wind projects operational, under construction or in planning • Further 36GW of licenses bring considered

13. Our analysis says Offshore Wind is the main hedging option for 2050 UK energy mix • ETI modelling of 2050 indicates up to 18 GW of Offshore Wind generating capacity would be economic for the UK • Assumes other technologies (e.g. Nuclear, CCS and Biomass) deliver on performance and timeliness • Need to factor in current market momentum • 10GW of Offshore Wind projects operational, under construction or in planning • Further 36GW of licenses bring considered • HMG Renewables Roadmap envisages 18GW of Offshore Wind installed by 2020

14. Technology intervention that reduces LCoE can make a big impact on actual level of offshore wind deployed • If Levelised Cost of Energy (LCOE) achieves 8.5p – 9.1p/kWh by 2030 • ETI modelling indicates installed capacity would increase substantially • Offshore Wind start to appear in the “first team”

15. Technology intervention that reduces LCoE can make a big impact on actual level of offshore wind deployed • If Levelised Cost of Energy (LCOE) achieves 8.5p – 9.1p/kWh by 2030 • ESME indicates installed capacity would increase substantially • With alternative assumptions • Nuclear, CCS or Biomass deployed at less than reference case • Looking increasingly likely that Offshore wind hedging will be needed The importance of Offshore Wind increases further

16. Example of Offshore Wind as a “CCS Hedge” Optimised 2050 world (i.e. with CCS) Optimised 2050 world without CCS available

17. Reports from DECC and The Crown Estate help ETI identify the key cost reduction areas

18. Reports from DECC and The Crown Estate help ETI identify the key cost reduction areas • Bigger, better turbines

19. Reports from DECC and The Crown Estate help ETI identify the key cost reduction areas • Bigger, better turbines • With bigger, more efficient blades

20. Reports from DECC and The Crown Estate help ETI identify the key cost reduction areas • Bigger, better turbines • With bigger, more efficient blades • Installed more cheaply

21. Reports from DECC and The Crown Estate help ETI identify the key cost reduction areas • Bigger, better turbines • With bigger, more efficient blades • Installed more cheaply • With improved, system, cost of energy

22. Reports from DECC and The Crown Estate help ETI identify the key cost reduction areas • Bigger, better turbines • With bigger, more efficient blades • Installed more cheaply • With improved, system, cost of energy • Accessing better wind resource

23. Reports from DECC and The Crown Estate help ETI identify the key cost reduction areas • Bigger, better turbines • With bigger, more efficient blades • Installed more cheaply • With improved, system, cost of energy • Accessing better wind resource • Benefitting from volume economics

24. Reports from DECC and The Crown Estate help ETI identify the key cost reduction areas • Bigger, better turbines • With bigger, more efficient blades • Installed more cheaply • With improved, system, cost of energy • Accessing better wind resource • Benefitting from volume economics • With clear returns for stakeholders

25. Reports from DECC and The Crown Estate help ETI identify the key cost reduction areas • Bigger, better turbines • With bigger, more efficient blades • Installed more cheaply • With improved, system, cost of energy • Accessing better wind resource • Benefitting from volume economics • With clear returns for stakeholders • Ability to test new innovation quickly

26. Reports from DECC and The Crown Estate help ETI identify the key cost reduction areas • Bigger, better turbines • With bigger, more efficient blades • Installed more cheaply • With improved, system, cost of energy • Accessing better wind resource • Benefitting from volume economics • With clear returns for stakeholders • Ability to test new innovation quickly What are the disruptive technologies going to be?

27. The ETI has projects that tackle 4 of these areas

28. The ETI has projects that tackle 4 of these areas Bigger Better Turbines With higher rated power and higher reliability Offshore Wind Drive Train Test Facility at Narec Condition Monitoring

29. The ETI has projects that tackle 4 of these areas Bigger Better Turbines With higher rated power and higher reliability Offshore Wind Drive Train Test Facility at Narec Bigger, more efficient blades Accelerating deployment of very long blades project larger swept area Lighter Improved manufacturing, with better tolerances

30. The ETI has projects that tackle 4 of these areas Bigger Better Turbines With higher rated power and higher reliability Offshore Wind Drive Train Test Facility at Narec Condition Monitoring Bigger, more efficient blades Accelerating deployment of very long blades project larger swept area Lighter Improved manufacturing, with better tolerances Installed More cheaply Floating Offshore System Demonstrator Accessing better wind resources (in deeper water) Floating Offshore System Demonstrator

31. Why floating wind? • Floating foundations will cost less than fixed foundations somewhere in range 30m to 100m

32. Why floating wind? • Floating foundations will cost less than fixed foundations somewhere in range 30m to 100m • Access to higher wind speeds to west of UK in 60m to 100m water depth could be cheaper than current UK R3 sites • Higher mean wind speed • Closer to shore • Reduced O&M costs • Reduced cabling costs and losses • Shore build and tow out

33. Floating wind: Benefits and concerns Benefits • Potential for competitive cost of energy • Access to areas of higher wind speed • Production line approach • Maximise work shore side, reducing impact of weather and offshore working • May reduce requirement for specialist ships • Existing demonstrators have performed well Concerns • Needs demonstrators to build investor confidence • Higher winds are linked with more severe sea state • Technology route not clear • Technology and operational issues not well understood • Constraints from competing use of deeper water • Shipping, fishing, military

34. Global Deepwater Market Analysis *Economic resource is likely to be on average 1/10th to 1/3rd of technical potential Source: BVG Associates

35. Potential site locations • Potential deployment areas in the range 50-100m

36. 68%/KWh target cost – floating 81%/KWh reference cost – floating • Average wind speeds over UK waters which are 50-100m deep range from 9-12 m/s • Cost figures from ETI design and cost modelling projects Opportunities • Energy yield proportional to (wind speed)3 • 11 m/s wind (Western Isles) offers >180% of the energy of 9 m/s wind (Dogger Bank) • Highest mean wind speeds are around West of Scotland and off the South West coast • Short distances to shore in SW England 100%/KWh Current cost – fixed structure 73%/KWh target cost – floating

37. Floating Offshore Wind System DemonstratorUp to £25m project • Front End Engineering Design (FEED study) • TLP approach • Best “additionality for ETI” • Led by Glosten Associates • Alstom 6MW turbine • Contracts signed February 2013 • 12 month project • Preferred site: wave hub, off NW coast of Cornwall • Followed, if good enough investment case, by full scale demonstrator • In water 2015/16

38. Key messages • To “earn its place” in the 2050 UK energy mix, offshore wind needs to reduce Levelised Cost of Energy • Main hedging option if other technologies don’t deliver their full potential; Nuclear, CCS, Bioenergy and Demand Reduction • Technology innovation will • Help reduce costs • Make a big difference to the amount of offshore wind deployed in 2050 • ETI is active in key technology innovation areas that have potential to drive down costs • Floating offshore wind has potential to make offshore wind part of the technology starting line up for 2050; rather than the best reserve • Access higher wind speeds in deeper waters • Deployment from 2020 onwards

39. Questions?

40. Key messages • To “earn its place” in the 2050 UK energy mix, offshore wind needs to reduce Levelised Cost of Energy • Main hedging option if other technologies don’t deliver their full potential; Nuclear, CCS, Bioenergy and Demand Reduction • Technology innovation will • Help reduce costs • Make a big difference to the amount of offshore wind deployed in 2050 • ETI is active in key technology innovation areas that have potential to drive down costs • Floating offshore wind has potential to make offshore wind part of the technology starting line up for 2050; rather than the best reserve • Access higher wind speeds in deeper waters • Deployment from 2020 onwards

42. Back up slides

43. ETI Invests in projects at 3 levels £5-15m, 2-4 years £15-30m+, 3-5 years £5m, 6-24 months • ETI additionality increases with progress towards ‘big projects’ - impact is significant at all levels • Additionality is delivered at all levels through depth of engineering, technology and policy engagement – at system integration level – coupled with involvement of ETI Member’s staff

44. £201m major projects underway£130m further projects in development Commissioning and funding projects Organisations working with the ETI

45. ESME is used to inform and answer questions for example... • What might be ‘no regret’ technology choices and pathways to 2050? • What is the total system cost of meeting the energy targets? • What are the opportunity costs of individual technologies? • What are the key constraints e.g. resources, supply constraints? • How might uncertainty in resource prices and availability influence technology choices? • Where should new generating capacity optimally be located? • How might policies and consumer choices influence technology development? • How might accelerating the development of a technology impact the solution?

46. Typical ESME Outputs

47. 2050 abatement costs are acceptable, provided we develop and apply the appropriate combination of technologies UK Committee on Climate Change target Driven by successful technology selection and development ETI projects target reducing these levels

48. Potential implications for the UK... Abatement costs UK’s challenging 2050 CO2 target appears affordable with intelligent national energy system design and investment in technology development Offshore Renewables the marginal power technology and an important hedging option ETI investing in next generation, low cost, deepwater platform and turbine technology demonstrations CCS a key technology lever given potential wide application in power, hydrogen and SNG (gas) production, and in industry sector ETI investing in separation, storage and system design – for coal, gas and biomass Natural gas a key 2050 destination fuel for power, space heating, industrial process heat and potentially for heavy duty vehicle transport applications ETI addressing through SSH and HDV efficiency programmes Hydrogen potentially important energy vector providing system flexibility (CCS and storage) and light vehicle transport applications ETI determining energy system flexibility benefits of using H2 Efficiency measures waste heat recovery, building insulation, and efficient vehicles make a contribution under all emission reduction scenarios ETI targeting through SSH (£100m) and HDV (£40m) projects Nuclear mature technology and appears economic under most emission reduction scenarios - primarily an issue of deployment (planning / licensing, supply-chain, finance etc) Cost impacts post-Fukushima need clarification – international approach needed Bioenergy major potential for negative emissions via CCS and might include a range of conversion routes – H2, SNG, process heat ETI investing in science, logistics and value models