HOUSTON—A push to develop floating offshore wind projects off the U.S. coast has led proponents toward the arms of the oil and gas industry.
Hopes are that the oil and gas industry’s technical know-how and experience in areas such as platform designs and mooring systems will help propel the nascent industry in waters offshore the U.S.
“The auto industry didn’t invent the wheel. They just figured out how to get rid of the horse and put an engine on it,” Walt Musial, principal engineer and manager of offshore wind for the National Renewable Energy Laboratory (NREL), told oil and gas players attending an offshore wind event in Houston recently. “The wind industry didn’t invent floating platforms; you all did.”
Knowledge transfer must take place between the oil and gas industry and the wind industry to move the latter to the next stage, which is development of optimized systems. “That’s what Henry Ford did,” Musial continued.
The issue brought people from the oil and gas and the wind industries together to discuss floating wind energy potential in the U.S. and opportunities for oil and gas players. The gathering was part of the Business Network for Offshore Wind’s Floating Frontiers series.
Floating wind production has taken off in places such as Asia and Europe, which leads the world in floating offshore energy, mainly from shallow waters.
However, the U.S. is home to only one offshore wind development—Deepwater Wind’s 30-MW Block Island Wind Farm in the Atlantic Ocean offshore Rhode Island. That number is expected to rise as renewables’—including wind—share of the electricity generation mix gets bigger amid a global push for cleaner sources of energy. Companies such as Alpha Wind, Principle Power, Progression and Trident Wind are already working toward commercial floating arrays offshore Hawaii and California by 2024 and beyond, according to the NREL.
But the floating wind industry is currently in a pre-commercial phase, according to Musial.
Searching For Solutions
According to the NREL, 58% of the U.S. offshore wind resource is in water depths greater than 60 m, which is too deep for conventional fixed-bottom offshore wind foundations.
Resource opportunities are available in the Pacific, North Atlantic and Great Lakes among other areas, but each has its own technology challenges. These include a high wave climate in the Pacific, shallow water moorings and draft substructures in the North Atlantic and a need for offshore floating technology to survive freshwater ice floes in the Great Lakes, according to the NREL.
According to Bill Hurley of Glosten, a marine solutions company that created the PelaStar TLP for deep offshore wind sites, industry challenges with floating wind foundations include:
- The size of platforms, which are smaller than oil and gas installations by a factor of 10, making them more susceptible to motion;
- The quantity of platforms needed, creating a need for serial production designs and mass production. Floating wind may need 80 identically designed platforms for a single, unique one for a specific offshore oil development;
- Floating wind developments typically have one primary interface with the turbine vs. multiple interfaces for oil and gas developments.
- Most floating wind developments are unmanned autonomous applications compared to the U.S. mostly manned platforms in the U.S.
Plus, most of the oil and gas platform manufacturers are located in Southeast Asia, leaving the question of whether such platforms could be built in the U.S. Another obstacle is tackling high platform installation costs. Hurley singled out the expertise of the subsea sector, “particularly floating to floating lifts, mooring systems anchors and lifts. They know all about mooring system fatigue and anchor handling solutions,” he said. “The oil and gas sector has evolved highly structured FEED processes that emphasize engineering to reduce risk.”
Bob Harrell, managing director, oil and gas, for Atkins, pointed out some of the similarities between the two industries, noting they both use the same basic hull shapes. Tension-leg platforms (TLP), semisubmersibles and spars are used for the floating turbines. However, “with floating wind we are still trying to mitigate motion,” he said. “The difference is we’re trying to take care of the turbine, the tower and maybe even the turbine output.”
Hurley said, “If we can’t find lower cost solutions that can be competitive with the power purchase agreement potential out there, then we can’t make floating wind viable.” The ultimate goal is use technology to make that happen, he added.
Progress is being made on some of these challenges as the industry works on pilot projects, and the oil and gas industry is participating. Statoil North America, for example, carried out several environmental surveys in the Gulf of Maine and design studies that advanced specialized floating spar buoy substructures for the Hywind Maine demo project, according to the U.S. Office of Energy Efficiency and Renewable Energy.
Equinor, formerly Statoil, has embraced renewable energy in its quest to be more sustainable and competitive. The company, which expects demand for new renewable energy to grow up to 10% annually toward 2040, said it cut costs for its offshore wind projects by 40% to 70% from 2012 to 2017. Equinor, operator of the world’s first floating wind farm (Hywind, offshore Scotland), currently operates three wind farms offshore U.K. but has several more in the pipeline. These include ARKONA offshore Germany, Dogger Bank offshore the U.K. and Empire Wind offshore New York.
The company put its oil and gas experience to use with Hywind Scotland’s wind turbines, which have a spar buoy design that Equinor said has similarities to the bigger Aasta Hansteen gas platform base.
Arturo Rodriguez Tsouroukdissian, of Equinor’s New Energy Solutions division, said the company has made “very bold steps” with its renewable energy strategy. He added Equinor sees the benefits of mixing the oil and gas industry with floating wind, specifically what oil and gas companies can bring to the table.
The two industries can also work together to supply power to existing rigs, he said. That’s already happening in other parts of the world.
He added that the wind industry needs to leverage the existing oil and gas supply chain to help lower costs.
Taking The Plunge
Some oil and gas and oilfield service companies have already entered the renewables sector. The question of whether more will take the plunge remains to be seen. Offshore oil and gas companies are still recovering from the market downturn, but renewables helped some companies stay afloat during those challenging times.
Subsea 7 deepened its renewables position. Earlier this year, the company—which provides engineering, procurement, construction and installation work along with transport and installation services via its subsidiary Seaway Heavy Lifting—announced plans to acquire Siem Offshore and its cable-lay vessels. The company installs subsea inter-array cables and provides repair and maintenance services.
Subsea 7’s renewables and heavy lifting segment brought in $559 million in revenue in 2017, up from $176 million in 2016, mainly from work related to the Beatrice wind farm project offshore U.K. The project, along with the company’s acquisition of Seaway Heavy Lifting, boosted net operating income to $90 million in 2017, compared to $28 million in 2016.
JDR, which designs and manufactures subsea power cables and umbilicals among other services, has also embraced renewable energy. The company has landed several inter-array cable contracts for offshore wind farms.
The former Dong Energy, known today as Ørsted, went all in 2017, shedding all of its fossil fuel assets to focus on wind. The Denmark-headquartered company says it has a 25% share of the offshore wind market and provides power for 9.5 million people.
Vincent DeVito, counselor to the secretary for energy policy for the U.S. Interior Department, said “the opportunity here is an economic one.”
The department has been encouraging offshore wind lease sales, and a policy committee is recommending a sale offering 20 GW of new capacity—2 GW a year for 10 years, DeVito said. The recommendation is under review within the department.
Still, U.S. oil and gas companies have typically been slow movers into renewables.
“This is primarily because investments in renewables are currently perceived by many U.S. companies as yielding far lower returns compared to the large investments they are used to making. Secondly, U.S. companies are most comfortable developing deep specializations in their core investments, while the renewables industry lends itself to a more diversified business structure,” Stephanie Chesnick, EY Americas power and utilities transaction leader, told Hart Energy in May.
“In addition, some companies have previously entered renewables at the wrong price points, and they have since become more cautious and scaled back,” Chesnick said. She later added, “Renewables are lower risk than shale operations, but returns are usually lower and typically less than 10% compared with 25% to 30% for oil and gas investments.”
Assessing Wind Potential
For many, it comes down to economics, and bringing down costs for floating offshore wind remains an objective for floating wind players.
Musial pointed out the potential for growth in the U.S. and falling costs for floating wind offshore U.K. There was nothing inherent in the technology itself that made it expensive, he said, singling out maturity as the cause.
U.S. offshore wind has a technical resource potential of about 2,000 GW or 7,200 TWh of generation per year, according to the U.S. Department of Energy.
So far, 11 floating wind projects totaling 229 MW are in the pre-commercial phase, according to NREL.
Six projects built on MW-scale floating turbines have been built. “They’ve been deployed to the degree that we can say they are successful. They didn’t fail,” Musial said. “They can pass general standards criteria that we would apply to them. They demonstrated that they can meet energy production over a long period of time. “
Principle Power’s floating wind project offshore Portgual—decommissioned after completing its objectives—is among them. The company, whose shareholders include Repsol and partners include Royal Dutch Shell, deployed a 2 MW WindFloat prototype offshore Portugal in October 2011. The prototype was completely assembled and commissioned onshore before being towed offshore. While offshore, the structure produced more than 16 GWh of electricity, according to the company’s website. The company currently has three precommercial projects underway—one each offshore France, Portugal and Scotland.
In Houston, Principle Power’s Bingbin Yu talked about some of WindFloat’s attributes, noting its static ballast system, heave plates for dynamic stability and conventional mooring system, which is the same as those used for oil and gas platforms. “We’re not trying to be fancy,” she said. “We want to use proved technology as much as possible.”
However, Yu, like others, pointed out that innovation is still needed in areas such as finding a lightweight material, improving fatigue performance, developing a design for local infrastructure and designing for serial production.
Being able to scale matters, panelists agreed.
“You can’t really get to the economics until you get to the final commercial scale. ... These are billion-dollar projects, and no one is going to invest a billion dollars into something if they are not sure it’s going to work,” Musial said. “We have our work cut out for us. But the industry is on a commercial path right now.”
Velda Addison can be reached at email@example.com.