Jun 13 | 2019
17 Percent Annual Growth Projected
Global operation and maintenance costs for offshore wind projects are expected to drive a market worth €11 billion by 2028, according to research consultancy Wood Mackenzie.
The firm predicts that maintenance optimization is playing a key role in maximizing revenue, especially for projects exposed to merchant risks as more than 80 percent of the installed base is expected to still be within the first half of it design live by 2028.
"Turbine O&M costs constitute the biggest portion of offshore wind OPEX spend. Uncertainty caused by key component failures is further pushing costs upwards. As such, a proactive approach is highly emphasised to replace key components to reduce turbine downtime and associated revenue losses,” said Shimeng Yang, senior offshore wind analyst at Wood Mackenzie.
Yang goes on to note that blade erosion and repair “remain a huge concern” in the offshore space, causing an estimated 5,000 days of cumulative downtime globally and resulting in €61 million of direct repair costs and lost revenue.
Europe, Asia Drive Growth
Growth in Europe and Asia Pacific is predicted to drive demand for O&M breakbulk services as Wood Mackenzie forecasts that the O&M market will grow by 17 percent per year. Larger rotor blades in newer models are additionally expected to more specialist project cargo handling and drive increased repaires due to higher tip speeds
“Both turbine design and harsh operating conditions are to blame for the erosion,” Yang comments, but goes on to note, “We expect average OPEX across Europe to drop by 57 percent between 2019 and 2028, mainly driven by larger turbine ratings, improved turbine reliability, economies of scale in service (due to larger-scale projects), new service practices and clustering opportunities.”
Installation Vessel Competition to Intensify
Demand for more-advanced installation vessels is also driving change for breakbulk operators as the need for major component replacement increases.
“Older vessels do not meet the specifications for installing larger turbine units,” said Søren Lassen, Wood Mackenzie senior offshore wind analyst. “This trend has been further fueled by an excess supply of installation vessels in the market, which is set to intensify in the mid-2020s when next generation turbines will start to be deployed.”
The use of condition monitoring systems may go some way to mitigate risks for operators as technology such as tower-top accelerometers and vibration sensors provide advance warning of maintenance defects. Subsea cable failures and foundation defects are also forecast to be amongst the highest risks to project development and operation despite 25-year design life of cables.
The firm predicts that maintenance optimization is playing a key role in maximizing revenue, especially for projects exposed to merchant risks as more than 80 percent of the installed base is expected to still be within the first half of it design live by 2028.
"Turbine O&M costs constitute the biggest portion of offshore wind OPEX spend. Uncertainty caused by key component failures is further pushing costs upwards. As such, a proactive approach is highly emphasised to replace key components to reduce turbine downtime and associated revenue losses,” said Shimeng Yang, senior offshore wind analyst at Wood Mackenzie.
Yang goes on to note that blade erosion and repair “remain a huge concern” in the offshore space, causing an estimated 5,000 days of cumulative downtime globally and resulting in €61 million of direct repair costs and lost revenue.
Europe, Asia Drive Growth
Growth in Europe and Asia Pacific is predicted to drive demand for O&M breakbulk services as Wood Mackenzie forecasts that the O&M market will grow by 17 percent per year. Larger rotor blades in newer models are additionally expected to more specialist project cargo handling and drive increased repaires due to higher tip speeds
“Both turbine design and harsh operating conditions are to blame for the erosion,” Yang comments, but goes on to note, “We expect average OPEX across Europe to drop by 57 percent between 2019 and 2028, mainly driven by larger turbine ratings, improved turbine reliability, economies of scale in service (due to larger-scale projects), new service practices and clustering opportunities.”
Installation Vessel Competition to Intensify
Demand for more-advanced installation vessels is also driving change for breakbulk operators as the need for major component replacement increases.
“Older vessels do not meet the specifications for installing larger turbine units,” said Søren Lassen, Wood Mackenzie senior offshore wind analyst. “This trend has been further fueled by an excess supply of installation vessels in the market, which is set to intensify in the mid-2020s when next generation turbines will start to be deployed.”
The use of condition monitoring systems may go some way to mitigate risks for operators as technology such as tower-top accelerometers and vibration sensors provide advance warning of maintenance defects. Subsea cable failures and foundation defects are also forecast to be amongst the highest risks to project development and operation despite 25-year design life of cables.
