Show notes
In this episode, we discuss Ørsted's new report proposing a 30% reduction in offshore wind energy costs by 2040, and explore the potential role of automation in wind energy manufacturing. Plus a reminder to register for the next SkySpecs webinar, focused on turbine repair trends and best practices. And the La Joya Wind Farm in New Mexico is our wind farm of the week!
Sign up now for Uptime Tech News, our weekly email update on all things wind technology. This episode is sponsored by Weather Guard Lightning Tech. Learn more about Weather Guard's StrikeTape Wind Turbine LPS retrofit. Follow the show on Facebook, YouTube, Twitter, Linkedin and visit Weather Guard on the web. And subscribe to Rosemary Barnes' YouTube channel here. Have a question we can answer on the show? Email us!
Speaker: [00:00:00] You are listening to the Uptime Wind Energy Podcast brought to you by build turbines.com. Learn, train, and be a part of the Clean Energy Revolution. Visit build turbines.com today. Now, here's your host. Allen Hall, Joel Saxon, Phil Totaro, and Rosemary Barnes.
Allen Hall: Well, you won't want to miss the next SkySpecs webinar, which is on April 30th at 11:00 AM Eastern Time us Which Joel, that's like, uh, it's like 5:00 PM Denmark time, right?
Roughly.
Joel Saxum: Mm. Mm-hmm.
Allen Hall: Yeah. And this is the second webinar in the joint series with Uptime and PES Wind. This edition features industry leading repair vendors and discusses the latest trends, challenges, and innovations, shaping the turbine repair landscape. Now this is who schedule to appear. Sheryl Weinstein, principal blade engineer with SkySpecs and.
If anybody knows Sheryl she knows Blades. This is [00:01:00] somebody you want to pay attention to. Alice Lyon, owner and CEO of Lyon technical access. Uh. Really knowledgeable about Blades. Craig Guthrie, who I've known for a long time now, director of Blade Service at Takkion and Jose Israel Mejia Rodriguez, who's director of engineering at RNWBL.
And if you've worked with renewable, uh, they do a terrific job keeping turbines up and running. So this discussion will be, uh, talking about best practices for operators and owners and repair teams. But so just, there's a lot of confusion at times on, on how to. Keep your organization running smoothly.
Well, these experts are gonna be giving you a, a lot of good advice and how to source repair vendors and, and how to evaluate vendors and get certifications and safety records, which are getting more and more critical as the season goes on. So you won't wanna miss this. April 30th, 11:00 AM Eastern us.
Click the link in the show notes [00:02:00] below to to register for that event and tell a friend, because this is gonna be a, a great webinar. Ørsted has released a significant new report titled Offshore Wind at a Crossroads, and you can go on Google and download this document. It's, it's a pretty thick white paper and it examines the current state of the European offshore wind industry.
And Rosemary and I were just over in Copenhagen. We saw. A lot of the offshore wind industry at the Wind Europe event. Now the report focuses on the urgent need to revitalize Europe's offshore wind industry, and it outlines the policies and industry action required to unlock investment and stabilize some of the costs and accelerate the deployment of offshore wind at.
There are a number of highlights in this. The one of them or two of them, let's go with the big ones, which is, um, Ørsted proposed a joint commitment between the governments and industry to auction at least 10 gigawatts of CFD capacity over the next 10 years. So [00:03:00] 10 gigawatts per year over the next 10 years, which would be a hundred gigawatts plus another five that would be for c corporate offtake.
So like a PPA, uh, sort of situation. And for doing this, with that commitment, the, the industry would then mobilize investment to try to lower the levelized cost of energy by 30% by 2040. And my first thought was, boy, that's a pretty good trade off. If, if I'm a. You know, any country in Europe, 30 percent's a lot because the, the existing CFD prices are in the 90 euros per megawatt hour.
And then we're gonna try to drop them into the sixties, seventies, uh, by 2040. And, um, my first thought no one was gonna talk to all you today was, is this possible you think they can get a 30% reduction by 2040 in the levelized cost of energy for offshore wind? Some of that coming [00:04:00] from lower cost of access or easier access to cash, which hopefully if interest rates comes down, that will happen.
The other one is just getting better at what they're doing. Is that something that we can lower the price down that much by 30% by 2040?
Phil Totaro: Well, yeah, they, they target two areas in, in this report that they talk about, uh, reduced cost capital being, you know, 15% of it approximately, and the other 15% being, as you mentioned, like what they're calling accelerated learning curve.
Um, which is really just, you know, um, what do we used to call that? Economies of scale, uh. You know, effectively, like getting familiar with the manufacturing process around certain things and, and being able to, uh, get cost efficiencies out of, um, you know, uh, wasted, um, manufacturing process or, um. You know, wasted materials and, and things like that as well.
So the [00:05:00] short answer is I don't know that it's gonna be 30%, and I, I would actually forecast that the reduced cost of capital will probably be more than 15%. So you may get there, uh, and you know, you might get to 30% reduction just on cost of capital alone, but at the end of the day, yeah, I mean, this isn't anything revolutionary here.
Um, uh, so. Yeah, it's, it's certainly possible to be able to achieve that, especially by a time timeframe like 2040. But we also don't know what's gonna happen, uh, you know, in, in the global economic situation between now and then. You know, it's, that's 15 years away, 14 years away, and there's, there's some black swan event that's still out there yet to happen that can, you know, throw us into a global recession or, or also into global growth.
So. We'll see.
Rosemary Barnes: Black Swan is such a weird phrase for an Australian because all swans here are black, and so [00:06:00]
Joel Saxum: the last person that used that with me was an Australian. I think that, I think there's a couple of things you can think about here though too. If what this is calling for, what this report is calling for is stability within the industry.
We want stability. We want to have more growth. We want to have more opportunity. We want to, we want a market and a power producing industry for off offshore wind that is stable and can drive investment. It can take investment, but if you get to that stage, you're also gonna bring in more competition.
That's good. So if it's a stable space and more people can enter it to, to work in it, then you're going to more Competition usually drives prices down, whether that's vessel manufacturers or suppliers or you know, blade repair companies or drone inspections, whatever that may be. More competition usually drops that price and at the same time.
You know, ever since I've been in the win industry, it's been really exciting about how we treat innovation. There's a lot of people working on a lot of things. And if in the next 15 years innovation, the whole point of innovation is to drive prices down [00:07:00] or to, you know, to save money here, save money there.
So I think that more competition in a stable market, more money coming into innovation in a stable market, um, you know, this is outside of what Phil's thoughts that are completely correct on, you know, financing coming down and, and cost. I think that those things could drive, uh, an LCOE down, down, down, down, down.
Um. It's that economy of scale. It's that once we're here, we're ready to roll, we can do these things.
Rosemary Barnes: I might kind of disagree with Joel, but probably at its essence not, not fully disagree. I think that, uh, definitely. I mean, it's not, it's not actually a huge reduction over 15 years, right? Like if you look at the previous curves of cost reductions, uh, it's, you know, it's, it's not gonna, it's not gonna even continue that trend.
But I do think that the recent trend. Up until a couple of years ago, the trend for wind energy's price reductions was too, too steep, artificially steep, and I think driven by like, excessive competition or like a weird, a weird [00:08:00] kind of competition, um, with maybe too much innovation in a sense. So I think that more of the same of that is, is not the right kind of kind of innovation.
I think what what we need is to have, uh, a few, a few products available. Definitely you need some competition, but. Companies need to be able to make enough enough turbines from the one platform to have a secure pipeline of project. Then you get the kinds of innovation that maybe don't immediately seem like innovation but aren't nonetheless, you know, like just little learnings on how to improve cycle times, little learnings on how to improve quality.
You know, just tiny little. Engineering innovations, manufacturing innovations that just have time to build up, have time to repay all of the, you know, like you need a lot of engineering to make a new, a new product, an offshore wind product, reliable and cheap. And you need, uh, enough units made to repay that investment because when you're just constantly like a new platform, every year we're [00:09:00] going bigger.
Two years later, we've got a bigger wind turbine and two years after that, we've got another bigger one. It's not enough time to make enough wind turbines to repay the engineering investment.
Joel Saxum: And I think Rosemary, I'm, I'm, I'm, I agree with you a hundred percent on that component, and I,