Size limits urged to stop “wind turbine arms race” as factories struggle to keep up

Energy analysts Wood Mackenzie have called for a cap on the size of offshore wind turbines, saying the race for bigger and bigger machines is putting unprecedented pressure on supply chains, with vessels and factories unable to keep up.

Offshore wind turbine sizes have exploded over the past few years. It was not that long ago when headlines celebrated the breaking of the double-digit capacity barrier. More recently, however, Chinese developers are already installing 16MW turbines and plans are in the works for turbines over 20MW.

“The innovation that resulted in increasing turbine size has been key to bringing down the cost of offshore wind,” WoodMac says in its report. “But these larger sizes have also rendered obsolete some elements of the supply chain, such as installation vessels.”

Turbine blades and towers have had to grow to match larger turbine nacelles. In turn, new moulds are needed for ever larger blades, and some factories have even had to close because they are unable to accommodate these larger blade sizes.

Similarly, to support larger turbine sizes, towers are having to grow to accommodate. This “is leading to four- and five-section towers, resulting in a 3.5-fold increase in demand for tower sections by 2029,” the report says.

“Increasing section sizes are also making the towers more complex to manufacture and extending the physical dimensions required of factories, sometimes even making existing factories obsolete.”

This “turbine size arms race” has led to investment being used to change manufacturing facilities and research and development. Moreover, “Larger-size components have also increased the cost of repairing mistakes when something goes wrong in the manufacturing process.

This particular problem has hit certain turbine manufacturers harder than others. A review into Siemens Gamesa’s troubled turbine fleet was launched in January, when it was revealed that  faulty components blew a €472 million hole in the Spanish giant’s December quarter result.

The review revealed problems affecting between 15-30 per cent of Siemens Gamesa’s 132 gigawatts of turbines around the world – and the bill to fix the troubled wind division is now expected to pass the €1 billion ($1.6 billion) mark.

GE also felt the impacts from an increasing number of faults, before announcing a move away from niche models and plans to shrink its design portfolio.

“Lastly, increasing turbine sizes have made developers reluctant to sign equipment orders until the last possible moment, hoping costs will continue to fall for their projects with larger turbines. This is probably one of the factors making some projects unprofitable.”

It is for this reason that Wood Mackenzie has recommended governments – particularly across Europe and the United States – impose a temporary size cap.

The Dutch government recently proposed a cap on turbine tip heights, which would effectively cap turbine sizes at 25MW. But as Wood Mackenzie explains, “the most important factor is not the size of the cap, but that a cap is imposed. Getting all nations on board would be challenging.

“However, if the core markets – Europe and the US – enforced the cap, suppliers would be less likely to introduce technologies that exceeded it, even if it were possible.

“As increasing turbine size is key to bringing down costs, the cap should be temporary, but at least 10 years in duration, as this would give suppliers and investors confidence in their new investment.”

It is not just governments that need to act, however, as Soeren Lassen, head of offshore wind at Wood Mackenzie and co-author notes:

“It’s not all up to governments,” he said. “Developers also need to consider innovative partnerships with suppliers to provide the demand stability that suppliers need to increase capacity.”

“The sector – most notably the policymakers – must take this opportunity to chart a more sustainable path for offshore wind,” concludes Seiple.

“This will not just influence the projects being installed today or in 2030, but also the 1.4 terawatt (TW) offshore wind capacity that Wood Mackenzie expects to be connected by 2050.”

The data published by Wood Mackenzie revealed $US27 billion in investment is required to by 2026 to meet a five-fold growth in annual offshore wind installations – the analysts’ base case outlook which forecasts offshore wind capacity additions of 30GW a year by 2030.

However, even this is dwarfed by current government offshore wind targets around the globe, which require nearly 80GW per year through the end of the decade, in turn requiring investments to ramp up to more than $US100 billion.

But a number of supply chain constraints and investment barriers are making it difficult for the industry to scale up to meet the level of ambition.

Wood Mackenzie’s analysis, ‘Cross currents: Charting a sustainable course for offshore wind’, lists a number of concerns across the developmental and technological sectors – as highlighted below.

Investments required to meet 2030 government targets vs investments required in Wood Mackenzie’s base case outlook