How Big Is Too Big for an Offshore Wind Turbine?
Offshore-wind farms, like this one in the Baltic Sea off the coast of Germany, need to become a lot more common for governments to hit their renewable-energy targets.
PHOTO: FRED TANNEAU/AFP/GETTY IMAGES
The offshore wind industry’s pursuit of scale could be storing up problems for the future, according to a study of insurance claims that found larger turbines are failing earlier.The blades of Vestas Wind Systems’ largest turbine, currently in testing, are nearly 380 feet long. Each turbine towers more than 900 feet and can generate up to 15 megawatts of electricity—enough for a town. Turbines that were state-of-the-art a decade ago had around a fourth of that capacity.Vestas’s rivals, General Electric and Siemens Gamesa, are introducing similarly large turbines, and Chinese suppliers are designing even larger models.
Analysts see these giant machines playing an important role in governments’ clean-energy plans.But GCube, a renewable-energy insurer owned by Japan’s Tokio Marine HCC, sees a downside. It found that component failures in turbines with 8-megawatt capacity or greater occur on average after just over a year. That compares with over five years for turbines of 4-to-8 megawatts.Vestas and Siemens Gamesa have been selling 8-megawatt models for several years.
GE doesn’t yet have turbines that large in commercial operation. The companies declined to comment.Christoph Zipf, a spokesman for industry organization WindEurope, pointed out that customers are ordering suppliers’ newest designs.”This clearly shows that developers continue to be interested in big turbines,” he said. The U.S. Department of Energy says the cost of offshore-wind power has fallen by more than 50% since 2014, thanks largely to increasing scale.
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GCube’s report was based on its claims data and information from other market participants. The company says it has insured more than 100 gigawatts of renewables assets since the 1980s. Fraser McLachlan, GCube’s chief executive officer, said the firm reduced its offshore-wind exposure in the last few years. That was because claims were rising, while new players in offshore-wind insurance were driving down pricing to what he described as unsustainable levels. He predicted that if losses mount, insurers will pull out, making projects harder to finance and slowing the energy transition. Some problems reflect the rapid introduction of new models. Losses from defective materials or workmanship, electrical failures and gearbox failures are rising, GCube said. Other issues show how larger turbines are testing the industry’s supply chain. Some 55% of claims involved turbines of 8 megawatts or more and occurred during the construction phase, reflecting the difficulty of handling them, GCube said. The average claim size has increased from 1 million pounds, worth approximately $1.25 million, in 2012, to over $7 million. GCube said that is down to the cost of parts and repairs on larger systems. Only a few of the vessels that install turbines can handle the largest ones, and diverting them for repair jobs is expensive. “We’re going to start to see the issue compound itself the larger these turbines get,” Mr. McLachlan predicted. Siemens Gamesa in January recorded a 472-million-euro charge, equivalent to roughly $521 million, after a review of its fleet uncovered component problems, pushing up warranty and maintenance provisions. Vestas’s net warranty provisions rose from €679 million in 2021 to €915 million last year. Manufacturers have been losing money on offshore turbines as they battle inflation while competing to produce new models. Meanwhile, progress is well behind governments’ ambitions. Europe has roughly 30 gigawatts of offshore capacity after adding 2.5 gigawatts last year. It wants to hit 150 gigawatts by 2030. “This huge increase in capacity is not achievable if we don’t use big turbines,” said Mr. Zipf at WindEurope. The case for scale is powerful. Turbine output depends on the area of the circle swept by the blades and wind speed, which is stronger higher up. That means fewer turbines, and less raw material, for the same amount of power. But the pace of change will test engineers’ expertise—and insurers’ risk appetite. |