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Über dieses Buch

The book provides an overview of the policy frameworks that have been employed to support offshore wind power, and their efficacy in nurturing sustainable cost reductions across the industry.A growing number of countries are increasingly receptive to the prospect of implementing policies to support the deployment of large-scale renewable energy. The promise of carbon-free, utility-scale power generation from offshore wind farms has incentivised and nurtured offshore wind development. However, the high relative costs of deploying offshore wind compared to alternatives have a history of making it political divisive pursuit. At the same time when many countries are just beginning to explore the possibility of developing an offshore wind industry, many other countries are experiencing what can be described as policy fatigue over supporting offshore wind. If cost reductions are not proven sustainable by the early 2020’s, then government support for offshore wind may start to erode and even completely evaporate in several key offshore wind markets – with global repercussions. This book will provide the reader with a clear picture of the current status and future challenges of the offshore wind industry globally, incorporating both a technical analysis of the cost drivers as well as a detailed analysis of policy design and economics of industry.



Chapter 1. Background: Role of the Offshore Wind Industry

The offshore wind industry has evolved both as an extension of and as an alternative to land-based wind farms in countries hindered by land scarcity or constrained by public concerns. The social and political role that offshore wind plays is similar to that of land-based wind and other renewable energy technologies, namely, that offshore wind farms bolster energy security, support greenhouse gas emission reductions and renewable energy targets, and create opportunities for new industries and jobs. However, the unique attributes of offshore wind farms, such as the greater wind energy resources they are able to capture offshore and their proximity to major coastal demand centres, have also helped to carve out a unique political, economic, and public role for the offshore wind industry.

Rahmatallah Poudineh, Craig Brown, Benjamin Foley

Chapter 2. Global Offshore Wind Market

The global market for offshore wind power has rapidly evolved over the past decade. Once considered to be a purely European development, the offshore wind industry is now expanding into virtually all corners of the globe. Far East Asia, North and South America, the Indian subcontinent, and Oceania, among others, are all making strides towards developing this resource in their waters. This chapter discusses the latest development in the global market. It also explores the potential for growth in not only the aforementioned geographic areas, but also other, yet unexplored, opportunities.

Rahmatallah Poudineh, Craig Brown, Benjamin Foley

Chapter 3. Cost Drivers and Technical Hurdles

Understanding the specific cost drivers of offshore wind helps to devise effective strategies to lower or remove the barriers to viability and the progress of this industry. This is specifically important given that offshore wind historically has had a higher cost compared to other renewables such as onshore wind. This can be attributed largely to the nature of working in the harsh marine environment, which entails increased risk for projects and assets, and, moreover, demands more performance from those assets as compared to their onshore counterparts. This chapter explores the various cost drivers and technical hurdles of the offshore wind technology.

Rahmatallah Poudineh, Craig Brown, Benjamin Foley

Chapter 4. Renewable Energy Support Policy Design

As most types of renewable generation technologies are relatively expensive, at the prevailing electricity market prices, government support is crucial to promote their share in the generation mix. Nonetheless, designing a suitable support scheme is not a straightforward task, not least because of the competing and sometimes conflicting objectives of policies. This chapter reviews renewable support models and highlights their main specifications in relation to providing incentive for investment and cost reduction, as well as compatibility with renewable policy design principles. It concludes that the choice of support scheme depends on the characteristics of the electricity market, technology, economic institutions, public acceptance, and the ability of the model to reduce risk to investors and provide efficiency.

Rahmatallah Poudineh, Craig Brown, Benjamin Foley

Chapter 5. Current Support Policies to Promote Offshore Wind Power

Given the cost and risk involved, the growth and development of the offshore wind industry are still reliant on government subsidies. This chapter reviews the support schemes implemented in the main offshore wind markets of Asia, Europe, and the United States, and evaluates their performance. The examination of offshore wind markets shows that the design of an effective support scheme depends, to a large extent, on the specifications of the market and the degree of technology maturity. The results of our analysis in this chapter provide insights on the ways in which support schemes for the offshore wind industry can be designed and implemented.

Rahmatallah Poudineh, Craig Brown, Benjamin Foley

Chapter 6. Cost Reductions and Innovation in the Offshore Wind Industry

Offshore wind is a relatively immature industry which is heavily reliant on government subsidies to grow. In order to survive in an environment where the cost of alternative renewable energies, such as onshore wind and solar, have been rapidly falling, the offshore wind industry must significantly reduce its costs in the coming years. This chapter discusses the issue of cost reduction and innovation in the industry and analyses the opportunities for cost cutting through improving technology, supply chain management, finance, and government support policies.

Rahmatallah Poudineh, Craig Brown, Benjamin Foley

Chapter 7. Public Acceptance of Offshore Wind Farms

The successful deployment of offshore wind farms and other renewable technologies depends, to some degree, on their public acceptance. Past experiences have proven that public opposition can result in delays or project standstill for renewable energy projects. Therefore, it is crucial to develop a clear understanding of the social implications of offshore wind installations. This chapter reviews the main factors that give rise to opposition against offshore wind farms and discusses the ways in which public acceptance of these installations can be promoted.

Rahmatallah Poudineh, Craig Brown, Benjamin Foley

Chapter 8. Looking Ahead: Current Trajectory and Key Uncertainties

Europe’s offshore wind industry has provided evidence of learning curve efficiencies setting in, with project economics (as measured by levelised cost of energy) drastically improving since 2015. Moving towards the end of the decade, the question becomes whether this cost curve trajectory is sustainable and if these efficiencies can be replicated in the emerging offshore wind markets of North America and Asia. This chapter summarises the current trajectory of the offshore wind industry and presents factors affecting it, including policy uncertainty in key markets and the evolution of wholesale power market prices, that could have global ramifications to the industry.

Rahmatallah Poudineh, Craig Brown, Benjamin Foley

Chapter 9. The Implications for Policy

The recent success of the offshore wind industry in Europe demonstrates that policy mechanisms can be instrumental in helping the industry effectively achieve and prove cost reductions. However, the lessons learned from Europe as well as observation of the successes and difficulties in other nascent offshore wind markets around the world suggest that, when formulating an effective policy approach, policy makers must consider a myriad of factors including how to manage the integration of power to the grid, promoting system flexibility, and power market design. Accordingly, policy approaches may vary market by market and depend, to a great extent, on the current stage of the market’s development.

Rahmatallah Poudineh, Craig Brown, Benjamin Foley

Chapter 10. Conclusions

The offshore wind industry is approaching three decades of existence. Although the industry has shown significant achievements in cost reductions in recent years, it is poised to be a policy-driven industry for the foreseeable future, particularly in nascent markets outside of Europe. The key factors to the growth and maturity of the offshore wind industry are reaching grid parity and phasing out subsidies, dealing with issues of wind power intermittency through power system flexibility and improving public acceptance. Therefore, it is important that policies to promote offshore wind encompass a wide range of considerations.

Rahmatallah Poudineh, Craig Brown, Benjamin Foley


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