September 21, 2016
Market Opportunities for Offshore Wind: What Does the Future Hold?
The future of the offshore wind market depends on where you’re standing.
- In Europe, the offshore wind market is so well established that new generations of equipment are replacing obsolete machinery.
- In North America, the industry is so new that it exists largely on the drawing boards of offshore-wind developers.
- In Asia, it’s somewhere in the middle as China ramps up its offshore wind capacity.
Around the world, the rising popularity of clean, renewable energy is creating an abundance of opportunities for forward-looking entrepreneurs, regulators and public policy advocates. These are some of the more promising market opportunities in offshore wind.
Consulting and public policy
It takes years to develop an offshore wind farm. Long before the first generator is designed and the first turbine blade is hoisted into place, legislators have to establish regulatory frameworks and advocacy groups have to rally public support.
In the United States, for instance, the emerging offshore wind industry is closely monitoring the fall election campaigns for signs that lawmakers friendly to renewable energy might be able to establish majorities in Congress. Similar scenarios are playing out in coastal areas around the world as more nations explore the potential of offshore wind.
Companies in the environmental engineering sector that are already familiar with complex environmental regulations could be well positioned to consult with governments and wind-farm developers. Similarly, lobbying firms could team up with private-sector groups to encourage the public to embrace offshore wind projects.
Wind turbines are the most high-profile mechanical devices in the offshore marketplace. The biggest player in this market is Siemens, the German industrial giant, which has built more than 85 percent of the wind turbines in European waters, according to the European Wind Energy Association.
That makes Siemens the go-to company for vendors supplying parts, machinery and expertise in the offshore wind industry. But it also points to one of the key lessons of economic history: When a single player dominates a market, it creates opportunities for creative, disruptive upstarts.
A few examples of potential equipment needs in the offshore wind market:
- Improved blade design: Subtle differences in the shape, length and materials used in turbine blades can make a substantial difference in performance and efficiency.
- Tougher turbine bearings: Wind turbine motor bearings are prone to failure. Curing this headache could bring substantial rewards to creative engineers and designers.
- High-voltage direct current (HVDC) technology: HVDC is the best way to transmit electricity over long distances. New generators, cables and accessories will be needed as the offshore wind industry matures and continues to install turbines farther from shore, where the wind is more powerful and predictable.
It’s the nature of electricity that everything which flows over wires can be closely monitored. With the advent of big data and the Internet of Things (IoT), sophisticated software can pull together wind patterns, weather data, sea levels, tides and load patterns on the electrical grid to fine-tune wind farms for peak efficiency.
Predictive modeling software can use sensor data to enable wind farm operators to plan shutdowns to replace worn-out parts before they fail, preventing the collateral damage that typically accompanies equipment failures.
The technology for installing wind turbines is well established. Local companies with experience in subsea installations — bridges, oil platforms, and so on — can readily adapt to the needs of creating turbine bases and installing the rotors and turbine motors.
These installation projects can create lots of local jobs, which makes them appealing from a political perspective.
The price tag for an offshore wind project typically starts in the hundreds of millions of euros or dollars. That usually requires amassing a complex combination of funding sources including bank loans, private investors and government grants.
Furthermore, developers must navigate a thicket of subsidies, tax credits and other cash-flow-related concerns. Financial companies that master all these complexities should find welcoming ears among wind farm developers.
Tapping These Opportunities
PMI provides some of the toughest, best-designed accessories for the subsea cables that carry power from wind farms to the power grid on shore. We’ve provided this technology to the petroleum exploration and development sector for decades, so we see the offshore wind market as a natural evolution of the world’s energy supplies.
We don’t oversell the potential of offshore wind. It may not work everywhere because of limitations in offshore topography, and it’s best suited to populations living close to shorelines. But it can be an essential component of a portfolio of energy sources that will help the world fight global warming and develop cleaner, more diverse energy sources.