What Will It Take to Build Offshore Wind in Oregon?

Source: By Justin Gerdes, Green Tech Media • Posted: Tuesday, October 22, 2019

The pace of technology advancement in offshore wind is rendering even recent cost projections out of date.

The study, published this month by the National Renewable Energy Laboratory (NREL), modeled the potential cost of power from floating offshore wind farms sited at five zones equally spaced along a north-south axis at least 10 nautical miles from Oregon’s coast.

The levelized cost of energy (LCOE) for the hypothetical projects — 600 megawatts each, outfitted with 15-megawatt turbines, and developed by 2032 — ranged from $74 per megawatt-hour in the north to $53 per megawatt-hour in the south, near the California border and that state’s own potential offshore wind bounty.

“Overall, the prospects for offshore wind in Oregon look promising for large-scale electricity generation,” the authors conclude.

“Floating technology is maturing rapidly, and offshore wind can provide a carbon-free alternative electricity source in coastal regions, especially in the southern region where offshore annual average wind speeds are near 10 m/s [meters per second] and among the highest in the United States,” the authors added.

One of the five sites included in the study is located offshore Coos Bay, where Principle Power submitted an unsolicited lease request for the WindFloat Pacific demonstration project in May 2013. Principle Power withdrew its lease request for the project, which had been slated to comprise up to five 6-megawatt turbines, in September 2016.

According to NREL, the LCOE for that project was $197 per megawatt-hour, compared to $63 per megawatt-hour for a 600-megawatt commercial-scale project as modeled in the new study.

Previous cost estimates obsolete

The pace of technology advancement in the offshore wind industry is rendering even recent cost projections out of date.

During a presentation earlier this month at a workshop convened by the California Energy Commission, Walter Musial, co-author of the new Oregon study and the lead for offshore wind research at NREL, said a 2016 NREL study he co-authored on offshore wind costs in California is now “obsolete.”

The California study estimated the LCOE for floating offshore wind in the state at around $100 per megawatt-hour by 2030, with wind turbine capacity maxing out at 10 megawatts. A key assumption in the Oregon study is the commercial availability of 15-megawatt turbines.

In an interview with Greentech Media, Musial said, “Based on the past 35, 40 years of wind energy development, we can extrapolate to a reasonable development scenario in which, say, a 15-megawatt turbine could be available on the market by 2030 — real 15-megawatt turbines, not just ones that they’ve put bigger generators on.”

Other factors contributing to the steep decline in the estimated cost for the floating offshore wind projects include lower expected financing costs and economies of scale that are driving project developers to install ever-larger turbines.

According to Musial, the Oregon study assumed fixed-charge interest rates at 7.1 percent, while the California study assumed that floating offshore wind’s then-higher risk profile would require fixed-charge interest rates greater than 10 percent.

The NREL team also found that a prevailing industry scaling assumption — that turbine size and costs go up in lockstep — no longer holds true.

“We’re not seeing that,” said Musial. “We’re seeing that the cost of turbines, as the project scales, it doesn’t necessitate a higher turbine cost per kilowatt-hour.”

The challenge of deeper depths

For now, wind industry activity off the shores of Oregon is quiet. But government stakeholders know the interest is there; the wind resource is too good for project developers to stay away indefinitely.

Last month, in Portland, the Oregon Intergovernmental Renewable Energy Task Force, which is led by the Bureau of Ocean Energy Management, met for the first time in five years. The two dozen local, state and federal officials who spoke at the meeting were clear that another unsolicited lease request could come at any time, and this time the state should be ready.

Musial noted that the NREL Oregon cost study is just that, and not an exhaustive analysis of the suitability of the five sites studied.

“All the sites would need a thorough vetting, and they have not been through any of that from the standpoint of conflicting use or environmental impacts,” he said.

Deep water could be a complicating factor, for instance, as mooring lines for floating turbines must still be anchored to the seafloor. The five sites studied were limited to waters no more than 1,000 meters deep. Musial said that in the south, where wind speeds are the strongest, water depths increase so quickly off the continental shelf that developers could encounter depths greater than 1,000 meters at the best sites.

“There’s no hard limit on depth for the technology, but it does get pretty expensive, and there haven’t been…enough studies done to assess what might be the implications of really deep water,” he said.

Despite the challenges, cost estimates in the study could prove to be conservative.

“It will probably even be lower than [$53 per megawatt-hour] if we wanted to site the turbines on the highest possible wind speed site we can get to,” said Musial. According to Wood Mackenzie, the levelized cost of electricity from floating offshore wind farms could hit $44 per megawatt-hour by 2030.

Given time and a robust project pipeline, manufacturers will develop equipment customized for floating offshore wind projects.

“Every turbine that has been deployed on a floating platform was not designed to be on that floating platform — it was designed to be on a fixed platform,” said Musial.

“There’s an optimization [for floating turbines] that could take place and hasn’t yet, and it won’t take place until there’s a visible pipeline with enough deployment capacity in it to justify the OEMs designing a fit-for-purpose floating offshore wind turbine.”