The development method of offshore wind farms is changing drastically and is being copied globally. The fierce competition and reduced subsidy levels have further increased the need for lower Levelized Costs of Energy (LCoE) and careful spending of development expenditures.
Europe is the main stage of offshore wind development. In the Netherlands and Denmark a new successful concession tender system has emerged, bringing LCoE down rapidly. In the last ‘Hollandse Kust (zuid)’ tender in the Netherlands no subsidy was required by the winner Vattenfall. Offshore wind has reached parity with fossil fuels there.
This successful tender system, whereby permitted sites with site data and a secured grid connection are being tendered, is now being copied by other countries around the North Sea and globally. BLIX Consultancy founders and directors Albert van der Hem and Maarten Timmerman have been active in offshore wind development since 1997. They have helped making the sector successful by supporting the Netherlands Enterprise Agency collecting soil, wind and wave site data for all of its tenders and helping international developers prepare bids in The Netherlands, Belgium, Germany, UK, France and Taiwan, with a focus on new tenders in the US, India and Vietnam.
Van der Hem: “Our first projects were all around the North Sea and were heavily subsidized. The first project that I was project director of, and which won a concession in the UK in 2003, was the 315 Megawatt Sheringham Shoal project, now operated by Equinor. It had a LCoE of over 170 euro/MWh, currently we LCoEs as low as 60 euro/MWh”. Timmerman adds: “Clearly these low cost prices attract new developers and investors, and BLIX has decided to further expand its business into Asia and North America. In the second round of Taiwanese projects we helped the Canadian IPP Northland Power and its Taiwanese project partner Yushan Energy win a bid for the Hai Long 2 & 3 concessions totalling 744 Megawatt.
Future of energy transition
Later Yushan Energy sold part of its shares to Mitsui from Japan. BLIX had key positions in the bidding team in the field of planning, risk & interface management, pricing of balance of plant components and project integration. Van der Hem states: “It is our mission to accelerate the energy transition and it is thus great to be part of this growing business and be part of projects that produce such affordable and large quantities of renewable energy.
We are not only able to collect the info and numbers to establish costs and the LCoE of any offshore wind farm, but also find and predict the optimisations that will lead to lower LCoE’s in the future. Further, it is the first time we support a client in Asia winning a tender”. “That feels great”, says Timmerman, “and it is an excellent example of our approach.
We build a core team of experienced BLIX consultants and add a number of specific experts, such as senior academics in soil dynamics and wind & wave expertise, or experts in grid infrastructure, electrical markets and financial analysts. We not only help winning tenders, but also support governments and developers in scoping, procurement and management of site investigations, create their design bases and project & site descriptions.
BLIX is then the managing consultant involving per project the best specialist service providers in e.g. engineering, soils, wind, wave, energy yield, under the flag ‘LCoE team’. Once all site data are collected we provide management expertise, risk managers and contracts managers to bring projects to Financial Close, package managers in the construction phase and procurement managers for O&M contracts”. “We are looking forward to what the future brings”, adds Van der Hem. “Next to floating wind and offshore hydrogen production, we expect floating solar projects to become mainstream. In order to be prepared we ventured into large scale solar too and have recently secured a development and contracting job for a 45 Megawatt solar plant”.