Energy Transition

Why a radical refresh is needed to tap offshore wind power, globally

The Amrumbank West offshore wind power park near the island of Amrum, Germany.

The Amrumbank West offshore wind power park near the island of Amrum, Germany. Image: Reuters/Morris Mac Matzen

Thomas Leurent
Chief Executive Officer, Akselos
Dorine Bosman
CIO, Port of Amsterdam
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Decarbonizing Energy

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  • A vast expansion of offshore wind power is required to meet the world's green energy needs.
  • Both the offshore wind technology and policy need overhauling.
  • Innovative industries such as electric vehicles can show how this can be achieved.

As we arrive in Glasgow for COP26, billed as the “world’s last best chance”, everyone’s thoughts should be on how to build success for the energy transition. Offshore wind is energy widely viewed as a key enabler of this global transformation – and one of the International Energy Agency's Net Zero targets calls for the installation every year of three times today’s global offshore wind power capacity from 2030.

To hit this target, all stakeholders need to realistically assess the challenge and make significant changes. The methods that took us to demonstration and early commercialization in the North Sea, both on a technology and policy front, must be rethought to work at a planetary scale. We believe a radical refresh of technology and policy to place a focus on innovation at scale could achieve a cost reduction in offshore wind power of up to 40%.

The reasons for today’s slow pace are many: Regulatory overhang from the offshore oil and gas industry, risk aversion from financiers and an incremental mindset within the engineering community.

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What do we need to do to shift the top-down policy and bottom-up tech mindsets and create a springboard for true disruptive innovation and deployment at scale? Here’s where we can look to other industries and learn.

Let’s start with electric cars. Like the offshore wind power, early innovation came from Europe and leading French and German car manufacturers, but they had the mindset of an incumbent from the boardroom to the factory floor, fuelled by a loyalty to the old way of doing things. Tesla turned the industry on its head by entering the sector with the hunger and willingness to take the risk of a start-up at the scale of the automotive industry and is now reaping the rewards.

Similarly, China came from nowhere to dominate the solar panel industry, motoring past Germany and the US’s early lead. It did this by spotting an opportunity and importing talent – offering companies tax credits to relocate and partner with local manufacturers to help build the fledgling Chinese industry, which now represents 60% of global capacity.

A new offshore wind power rulebook

What can offshore wind power learn from electric cars and solar? In the early days of the sector, emphasis was placed on the need to transition skills and technologies from oil and gas to renewable energy, but this has created a “Frankenstein industry” that has borrowed standards, components and designs from the hydrocarbon industries and from onshore wind.

Technology developers need to acquire Moore’s law mindset necessary to scale offshore wind power profitably. Today’s turbines and offshore wind energy installations are vastly over-engineered, adding cost, source energy and time. Integrated engineering and constant optimization of design should instead form the basis of a new rulebook.

We are seeing some positive signs here. On the scale, the industry has now attracted a new set of developers and operators that master high capital expenditure projects and the systematic use of local partnerships. On innovation, the Chinese turbine manufacturer Envision was created on the basis of blending Fourth Industrial Revolution technologies with offshore wind turbines. For example, each offshore wind power turbine collects data from over 150 sensors to adjust the turbines in real time and maximize output while minimizing wear and tear.

Offshore wind power capacity is growing – but not fast enough
Offshore wind power capacity is growing – but not fast enough. Image: Statista

Looking at powering success from the top down, we need a shift in policy from governments around the world. Thankfully, many countries are now recently realizing the market is mature enough to take on more commercial pricing – after the initial scale-up, taking public subsidies out will make innovation a driving force once again. Governments have influence in many areas: green power prices (the consumer opting in to pay more for renewable energy), locked-in power prices, permitted sites, export routes and network capacity can all dictate the attractiveness of an offshore wind power location.

Even bigger thinking is needed. Current leasing rounds for offshore wind power sites are just not ambitious enough, either to meet targets or to be attractive to some of the global conglomerates capable of financing, building and operating the next generation of wind farms. Leases need to be five to 10 times their current size, and to accommodate so much marine development we need global spatial planning strategies that bring together stakeholders from shipping, fisheries and all other marine industries.

As world leaders meet in Glasgow to rethink how the world can get to net zero, innovation and collaboration at scale is what will matter moving forward. Not innovation alone and not scale alone. Scaled collaborative innovation – something that applies equally to decarbonizing energy endeavours in all sectors.

Offshore wind energy really is still a start-up industry. Rule number one of start-ups is: “It’s not how much of the cake you’ve got, it’s how big the cake is.” Let’s make offshore wind power big. We’ll all have more wind in our sails, and get the world to net zero faster.

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