Monday, July 25, 2005

Study predicts spending surge for offshore wind energy

Study predicts spending surge for offshore wind energy

By OGJ editors
HOUSTON, July 20 -- Offshore wind energy installations, mainly off Europe, will attract $13.6 billion in investment during the next 5 years, predicted analysts Douglas-Westwood Ltd. in a market study published in mid-July.

The report says the offshore wind energy industry is set for strong, government-backed growth. It forecasts installations totaling 7,700 Mw—about the energy equivalent of 7 nuclear power stations.

"Present proposals call for 2,333 turbines to be installed, a massive challenge for the installation contractors," said report author Adam Westwood, who said expenditures will rise rapidly to more than $4 billion/year by 2009.

"Although onshore projects currently are cheaper, the European wind-power sector is moving offshore where wind regimes are better but economic and technical challenges greater.

"Installations are set to peak in 2008, when 827 turbines are expected to be positioned offshore. Interestingly, annual capacity installed continues to grow past 2008 even though unit numbers fall, due to the use of larger capacity turbines, namely 5 Mw class machines rather than the 2-3 Mw units currently used," Westwood said

The UK will have the largest turbine market over the period, with 664 units forecast. Germany will start later and install 494 larger turbines. These forecasts are based on developers' current plans for turbine size, but the preferred larger turbines will be used, if available at installation time, to increase capacity.

Wave, tidal power
Wave and tidal current power systems also are evolving, according to the report. Because waves and tidal currents contain massive amounts of energy, "the prize awaiting a commercially successful technology is considerable," said Westwood.

Because most technologies are in the development phase, little operational capacity currently is in place. However, grid-connected prototypes are beginning to prove the efficacy of various technologies, enabling power purchase agreements from wave and tidal technology.

"The first orders for multiple-unit farms are now being placed with the developers of market-leading technologies," said Westwood.

By 2007, annual installations could exceed 10 Mw/year, he said.

"The UK is strong in the wave and tidal sectors, having both an excellent natural resource coupled with a portfolio of successful technologies," said Westwood. "Portugal and Spain are both important players, and government support is strong, with a 12-year, index-linked tariff available to developers. This market-leading incentive is attracting the interest of many developers who view the country as ideal for future projects."

Westwood added that Australia has "excellent wave energy technology."