Ørsted Offshore Cost Reduction, Automation in Wind

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.
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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,