WEBVTT - Whatever Floats Your Wind Turbine 0:00:00.160 --> 0:00:02.960 Hi, I'm Dana Perkins and you're listening to Switched On, 0:00:03.240 --> 0:00:05.800 the b n OF podcast. So a few years ago, 0:00:06.040 --> 0:00:09.000 offshore wind was in the same camp as other conceptual 0:00:09.119 --> 0:00:13.480 renewable energy technologies like aerial turbines. In fact, we did 0:00:13.480 --> 0:00:16.280 a podcast episode on it back in July of twenty 0:00:16.400 --> 0:00:20.840 nineteen titled because why Not Floating an airborne Wind. This 0:00:20.920 --> 0:00:23.520 was actually one of the really early episodes of the podcast, 0:00:23.680 --> 0:00:26.160 and I was pretty new to the process back then. 0:00:26.720 --> 0:00:29.440 We did the whole podcast without me actually hitting the 0:00:29.520 --> 0:00:32.400 record button in the studio, So let me just tell you, 0:00:32.520 --> 0:00:34.400 it was not all that pleasant to go back to 0:00:34.440 --> 0:00:36.360 my guest and let them know that we had to 0:00:36.360 --> 0:00:39.639 have the entire conversation over again. And I don't think 0:00:39.640 --> 0:00:41.600 he laughed at any of my jokes orquips the second 0:00:41.600 --> 0:00:44.159 time around. But a lot has changed since then, and 0:00:44.200 --> 0:00:46.839 we are now over a hundred episodes into Switched On, 0:00:47.320 --> 0:00:50.480 and floating wind technology is now on track to commission 0:00:50.520 --> 0:00:53.720 giga watts of capacity this decade. Flying wind, on the 0:00:53.720 --> 0:00:56.240 other hand, has yet to take off. No pun intended, 0:00:56.760 --> 0:00:58.280 but we thought it might be the right time to 0:00:58.280 --> 0:01:01.520 talk about floating wind again, and that's because things like 0:01:01.640 --> 0:01:04.520 the scot Wind seabed auction. It surprised the world when 0:01:04.600 --> 0:01:07.839 it rewarded up to fifteen gigawatts of floating offshore wind 0:01:07.880 --> 0:01:12.160 sites earlier this year. That's more than the existing operating 0:01:12.240 --> 0:01:15.280 offshore wind capacity in the UK. And that's not all. 0:01:15.680 --> 0:01:18.200 France is set to announce the winner of the world's 0:01:18.280 --> 0:01:22.440 biggest subsidy tender yet this year, and California is looking 0:01:22.560 --> 0:01:26.480 too soon conduct its first floating seabed lease auction in 0:01:26.520 --> 0:01:31.080 the US. But questions remain, won't these projects cost a fortune? 0:01:31.520 --> 0:01:33.840 How big will the sector get and who will be 0:01:33.880 --> 0:01:38.080 the leaders? And what's enabling this growth? So to explore 0:01:38.160 --> 0:01:41.040 this topic, the b andF WIN team published a research 0:01:41.120 --> 0:01:45.360 note titled Tomorrow's Cost of Floating Wind and looked at 0:01:45.360 --> 0:01:48.320 a new model that helps users create the cost of 0:01:48.360 --> 0:01:53.000 building a floating wind project by turning over fifty different parameters. 0:01:53.520 --> 0:01:58.120 They also published their one h offshore wind Market Outlook. 0:01:58.640 --> 0:02:01.720 So from that team, I will be speaking with Louisa 0:02:02.120 --> 0:02:05.120 M Marin, who writes about offshore wind at b n 0:02:05.160 --> 0:02:08.760 EF and Oliver Metcalf, the head of Wind at b NF. 0:02:09.720 --> 0:02:11.840 All of these reports can be found at b enof 0:02:11.919 --> 0:02:14.760 Go on the Bloomberg terminal at BNF dot com or 0:02:14.880 --> 0:02:17.840 on BNFS mobile app. And as a quick reminder, we 0:02:17.919 --> 0:02:20.760 do not provide investment of strategy advice, and there is 0:02:20.800 --> 0:02:23.560 a complete disclaimer that is found at the very end 0:02:23.600 --> 0:02:26.160 of the show. But now let's speak with Ali and 0:02:26.240 --> 0:02:35.359 Louisa about floating offshore wind. Ali, thank you for joining us, 0:02:35.480 --> 0:02:38.000 Thanks very much for having us on. And Louisa, this 0:02:38.080 --> 0:02:41.320 is your first podcast with us, right, so we're here 0:02:41.360 --> 0:02:44.120 today to talk about floating wind. Now, those of you 0:02:44.120 --> 0:02:46.120 who have been listening to the podcast for a while 0:02:46.320 --> 0:02:48.639 or who are happy to flip back through the back 0:02:48.639 --> 0:02:52.600 catalog will realize that we did something on floating and 0:02:52.720 --> 0:02:56.320 flying wind in the early early days, which I referenced 0:02:56.400 --> 0:02:59.560 actually in the opener that you just heard. But I 0:02:59.600 --> 0:03:02.160 want to from you Ali and Louisa. Why is it 0:03:02.360 --> 0:03:05.519 the right time now for us to revisit this topic 0:03:05.560 --> 0:03:08.040 and why should everybody be interested in an update on 0:03:08.080 --> 0:03:10.799 the floating wind space. Well, when we first started looking 0:03:10.840 --> 0:03:13.160 at floating wind and published our first research on it, 0:03:13.240 --> 0:03:15.200 we kind of put the technology in the same bucket 0:03:15.760 --> 0:03:18.919 as pine the sky technologies, as you say, like airborne 0:03:18.960 --> 0:03:22.200 wind kites in the sky, whereas some of those other 0:03:22.240 --> 0:03:24.760 technologies have gone nowhere, floating wind has come on leaps 0:03:24.760 --> 0:03:28.520 and bounds. That's from a technology perspective, and the technologies 0:03:28.560 --> 0:03:30.919 are getting better and better, much faster than a lot 0:03:30.919 --> 0:03:34.320 of people predicted. But also governments are starting to get 0:03:34.360 --> 0:03:37.520 ambitious on this technology as well. So we're seeing governments 0:03:37.560 --> 0:03:40.280 around the world really start to show commitment to bring 0:03:40.320 --> 0:03:44.000 down the costs and to really make commercial scale projects 0:03:44.000 --> 0:03:47.080 of reality. So we're going to come to which governments 0:03:47.080 --> 0:03:49.720 in which locations. But before we even go there, can 0:03:49.760 --> 0:03:52.080 you create a picture for all of us who are 0:03:52.080 --> 0:03:55.760 listening today on what does a floating wind project actually 0:03:56.040 --> 0:03:59.200 look like. So a floating wind project is made up 0:03:59.280 --> 0:04:02.440 of winter and is obviously these similar ones to what 0:04:02.600 --> 0:04:05.680 you see on onshore and traditional offshore wind projects. These 0:04:05.680 --> 0:04:08.840 turbines are sitting on top of a floating structure that 0:04:09.000 --> 0:04:12.600 is kept stable using system of mooring lines which are 0:04:12.640 --> 0:04:16.479 anchored to the seabed and help limit the floater emotions. 0:04:16.720 --> 0:04:20.000 As any offshore wind project, the turbines are connected to 0:04:20.040 --> 0:04:24.320 each other through cables, but using floating substructures which are 0:04:24.600 --> 0:04:27.760 moved by waves and currents, requires a special type of 0:04:27.800 --> 0:04:31.640 cables dynamic cables, which are specially designed to stand this 0:04:31.839 --> 0:04:35.760 constant moving during the project's lifetime. The cables are their 0:04:35.880 --> 0:04:39.159 linked together in a substation which receives all the power 0:04:39.200 --> 0:04:43.200 produced by the wind bines and connects to the onshore 0:04:43.240 --> 0:04:46.760 grid via an export cable so that the electricity can 0:04:46.760 --> 0:04:50.160 reach all of us. So I've seen a ton of 0:04:50.160 --> 0:04:55.000 offshore wind, but that's the fixed offshore wind space. Actually, 0:04:55.040 --> 0:04:56.760 just the off the coast of England, we have the 0:04:56.800 --> 0:04:59.080 London Array and it is massive and you can see 0:04:59.120 --> 0:05:02.000 it as you fly onto the continent. And that seems 0:05:02.040 --> 0:05:05.520 to be working very well. So why this innovation and 0:05:05.520 --> 0:05:09.880 and really what's the incentive for floating wind to come 0:05:09.960 --> 0:05:12.320 to scale? Why all the household well, the ushore wind 0:05:12.320 --> 0:05:15.120 industry as a whole is progressed incredibly fast over the 0:05:15.160 --> 0:05:18.480 last couple of decades. So costs have dropped around six 0:05:19.560 --> 0:05:22.800 fourteen for those traditional bottom fixed projects you talk about. 0:05:23.520 --> 0:05:26.600 But offshore wind also allows us now to install renewable 0:05:26.680 --> 0:05:29.200 energy projects with the same generating capacity as some of 0:05:29.200 --> 0:05:32.520 the biggest conventional power plants. But these are so far 0:05:32.520 --> 0:05:35.240 out at sea they're almost invisible from shore. And all 0:05:35.360 --> 0:05:38.159 that comes while delivering a new green industry that brings 0:05:38.240 --> 0:05:41.279 jobs and all the economic benefits with that. But the 0:05:41.320 --> 0:05:44.880 problem is you can only install those traditional projects in 0:05:44.920 --> 0:05:49.080 waters of around deep, whereas you can install floating projects 0:05:49.080 --> 0:05:51.880 in waters up to a thousand meters deep or even more. 0:05:52.240 --> 0:05:54.400 So that means you can search more areas to find 0:05:54.520 --> 0:05:57.840 the windiest spots with the most consistent wind speeds, so 0:05:57.880 --> 0:06:01.159 the turbines generate more electricity. But it also means in 0:06:01.200 --> 0:06:04.599 places that have really steep continental shells, so places like 0:06:04.680 --> 0:06:07.480 California or the Mediterranean Sea where the sea gets deep 0:06:07.560 --> 0:06:10.400 really quick, you can take advantage of some of those 0:06:10.440 --> 0:06:13.760 benefits of bottom fixed offshore wind that I mentioned before, 0:06:13.839 --> 0:06:16.560 but pretty much in any country that has a coastline. 0:06:16.880 --> 0:06:18.440 So what if I want to see one, Are there 0:06:18.480 --> 0:06:20.400 any of these projects that have already been built or 0:06:20.480 --> 0:06:23.000 is it still actually a bit pie in the sky. Well, yeah, 0:06:23.000 --> 0:06:25.640 the project exists, but the sector is still very much 0:06:25.640 --> 0:06:28.160 of the demonstration scale. So the first project of more 0:06:28.200 --> 0:06:31.800 than one turbine came online in off the coast of Scotland. 0:06:31.880 --> 0:06:34.440 It was built by a Norwegian oil company called Equanol. 0:06:34.560 --> 0:06:36.760 That was five turbines, but the sectors still needs to 0:06:36.760 --> 0:06:39.440 see a lot of consolidation before we start to see scale. 0:06:40.040 --> 0:06:42.000 So last time we did the analysis, there were over 0:06:42.080 --> 0:06:45.560 forty different floating platform design so the designs for these 0:06:45.600 --> 0:06:48.359 platforms that turbine sit on top of. Now we'd expect 0:06:48.440 --> 0:06:50.520 to see a bit of consolidation and the industry to 0:06:50.560 --> 0:06:53.279 settle on on maybe just a few designs, and we 0:06:53.320 --> 0:06:56.280 haven't really nearly got there yet. The biggest operating project 0:06:56.440 --> 0:06:59.920 is the fifty megawat Kin Cardine, Scotland project, which has 0:07:00.160 --> 0:07:04.000 six turbines. It was commissioned last year. Now, just for comparison, 0:07:04.040 --> 0:07:06.960 the biggest cbed fixed offshore wind projects in the world 0:07:07.279 --> 0:07:09.960 is off the east coast of England. Now that's one thousand, 0:07:09.960 --> 0:07:13.480 two hundred megawats a hundred and seventy four turbines. So 0:07:13.520 --> 0:07:15.320 we've got a long way to go until we hit 0:07:15.360 --> 0:07:17.679 the kind of scale that we're seeing with traditional offshore 0:07:17.720 --> 0:07:20.920 wind projects. Six turbines does it sound anywhere close to 0:07:20.960 --> 0:07:23.960 commercial scale? So we don't have those in the water today. 0:07:24.120 --> 0:07:27.320 And we have, however, built a tool that will estimate 0:07:27.360 --> 0:07:30.640 the cost of different commercial scale projects. So how does 0:07:30.800 --> 0:07:36.040 this tool essentially work alongside the floating wind space and 0:07:36.160 --> 0:07:38.760 is it able to help us better understand what the 0:07:38.840 --> 0:07:41.640 costs will be for this in the future. So yeah, 0:07:41.720 --> 0:07:44.560 last week we released the tool that estimates the total 0:07:44.640 --> 0:07:48.720 cost of floating offshow wind projects from fabrication to transport 0:07:48.800 --> 0:07:51.880 and installation. So to build this tool with follow up 0:07:51.960 --> 0:07:54.600 bottom up approach where we forecast the price for each 0:07:54.640 --> 0:07:57.720 subsystem of a flotting inform in terms of material cost 0:07:57.800 --> 0:08:01.000 of intimerdial components, which then added up to a total 0:08:01.080 --> 0:08:04.600 capex value. So answering how did we think about these costs. 0:08:04.720 --> 0:08:08.280 Initially we asked the question of whether these solutions being 0:08:08.600 --> 0:08:11.360 used in each sub system have already been deployed in 0:08:11.440 --> 0:08:14.680 bottom fixed projects or even in other industries as oil 0:08:14.720 --> 0:08:18.160 and gas, and looked at how mature are these industries 0:08:18.200 --> 0:08:21.520 and how sensitive prices have been to the scale of deployment. 0:08:21.720 --> 0:08:25.360 I think a good example of this process is how 0:08:25.400 --> 0:08:29.160 we calculated win turbine costs. Most floating platform designs are 0:08:29.280 --> 0:08:32.600 turbine agnostic, meaning that they can use the same turbine 0:08:32.640 --> 0:08:36.560 models that are currently being developed and even deployed in 0:08:36.600 --> 0:08:39.520 fixed bottom project. This way, we looked at a more 0:08:39.640 --> 0:08:42.920 mature industry that fixed bottom industry, and we saw how 0:08:43.160 --> 0:08:46.120 turbine prices have been decreasing with the scale of deployment, 0:08:46.320 --> 0:08:48.679 and how this trend is looking into the future. A 0:08:48.720 --> 0:08:53.360 little bit different known approaches followed for floating substructures. As 0:08:53.400 --> 0:08:56.040 all they mentioned, there are numerous technology designs in the 0:08:56.080 --> 0:08:59.240 market at different development stage, and so we had to 0:08:59.440 --> 0:09:02.480 narrow down or research those that have already completed the 0:09:02.520 --> 0:09:07.320 testing and transition to a full scale demonstration project now 0:09:07.400 --> 0:09:14.560 for a very short break stay with us. So we've 0:09:14.600 --> 0:09:18.200 looked at the minutia around all of these different parts 0:09:18.240 --> 0:09:20.959 and how expensive this can be. We've kind of already 0:09:21.040 --> 0:09:23.920 established that. Unfortunately, your model is able to really get 0:09:23.920 --> 0:09:27.400 at the heart of it. How are we thinking about inflation, 0:09:27.600 --> 0:09:31.440 because that is definitely something that I think is affecting 0:09:31.440 --> 0:09:34.120 every industry. There's so many different things actually that are 0:09:34.200 --> 0:09:37.280 leading into this inflationary environment, and is that something that 0:09:37.320 --> 0:09:39.480 the model is able to handle. So that's a really 0:09:39.480 --> 0:09:41.760 interesting question and something that's right at the top of 0:09:41.800 --> 0:09:45.880 the minds of renewable energy developers. More generally, commodity prices, 0:09:46.000 --> 0:09:49.800 other input prices like labor costs, like logistics costs have 0:09:49.960 --> 0:09:52.880 shot up recently as countries have bounced back from pandemic 0:09:52.920 --> 0:09:56.720 injuced lockdowns, and so that makes the cost of building 0:09:56.760 --> 0:09:59.719 some of these projects much more expensive. Now, when we 0:09:59.760 --> 0:10:03.440 look specifically at floating wind, then some of those projects 0:10:03.440 --> 0:10:06.640 are really steel intense. A lot of floating platforms are 0:10:06.640 --> 0:10:09.880 built completely by steel, and so the cost of these 0:10:09.920 --> 0:10:13.880 projects can be pretty sensitive to fluctuations in the steel price. 0:10:14.440 --> 0:10:17.360 So what we did is within our model, we allow 0:10:17.640 --> 0:10:21.160 users to pull several different tickers from the Bloomberg terminal 0:10:21.480 --> 0:10:23.800 to choose which steel price from around the world they 0:10:23.800 --> 0:10:27.640 want to use to estimate project costs. Users can also 0:10:27.720 --> 0:10:30.360 input their own cost and so if they're thinking that 0:10:30.520 --> 0:10:32.440 a steel prices are different, or if they have different 0:10:32.600 --> 0:10:35.360 access to cheaper steel, then many can generate their own 0:10:35.360 --> 0:10:38.920 bespoke capex breakdown. I mean, that's how the whole system works, 0:10:38.920 --> 0:10:41.560 so it all inter relates, and that's really fascinating. So 0:10:41.600 --> 0:10:43.559 I guess that then just brings me to a question 0:10:43.679 --> 0:10:47.440 as we're talking about floating wind specifically within this you know, 0:10:47.559 --> 0:10:50.640 will it ever be cost competitive or at least as 0:10:50.679 --> 0:10:54.200 competitive as the bottom fixed offshore wind, which we already 0:10:54.200 --> 0:10:57.760 know is more expensive than onshore wind. Well cost is 0:10:57.800 --> 0:11:02.040 certainly significantly higher today so the early demonstration projects that 0:11:02.080 --> 0:11:04.120 I've been talking about, they come in around two to 0:11:04.240 --> 0:11:07.559 three times more expensive than the seabed fixed offshore wind 0:11:07.559 --> 0:11:11.120 projects that are getting installed today. So reaching commercial scale 0:11:11.160 --> 0:11:14.120 is going to be crucial to cutting costs. The sector 0:11:14.120 --> 0:11:16.240 needs to go from building one of these platforms at 0:11:16.240 --> 0:11:19.760 a time in a bespoke way to building twenty or 0:11:19.800 --> 0:11:21.560 even a hundred of these on a on a serial 0:11:21.559 --> 0:11:24.360 production line. So according to our latest calculations, we never 0:11:24.360 --> 0:11:27.160 really expect floating wind projects to reach that cost parity 0:11:27.440 --> 0:11:30.560 with bottom fixed projects, not at least before the horizon 0:11:30.600 --> 0:11:33.800 of our forecast out of But that isn't to say 0:11:33.800 --> 0:11:36.400 that the two technologies really need to compete. Different use 0:11:36.440 --> 0:11:40.839 cases right exactly. Cost very significantly depending on the project site. 0:11:40.880 --> 0:11:43.640 So in some cases there may be a floating project 0:11:43.679 --> 0:11:45.960 closer to shore that's cheaper than a bottom fixed one 0:11:46.400 --> 0:11:48.400 so far from shore that requires one of those really 0:11:48.400 --> 0:11:51.560 long and expensive export cables to bring the electricity to 0:11:51.600 --> 0:11:54.280 the consumer. Also, there are loads of countries with limited 0:11:54.320 --> 0:11:56.360 space or maybe no space at all where they can 0:11:56.360 --> 0:11:59.839 build one of these big, industrial scale seabed fixed off 0:12:00.080 --> 0:12:02.720 wind projects. So if they want to use offshore wind 0:12:02.760 --> 0:12:05.000 to support the net zero goals, they're going to have 0:12:05.040 --> 0:12:08.480 to use floating wind turbines, even if they are more expensive. Yeah, 0:12:08.480 --> 0:12:11.920 because so much of the discussion around trying to electrify 0:12:12.000 --> 0:12:16.360 everything relies on us having a lot more installed renewable 0:12:16.440 --> 0:12:18.520 energy around the world. So I suppose this is one 0:12:18.520 --> 0:12:21.839 of those where there are some technical aspects that are 0:12:22.000 --> 0:12:24.320 standing in our way from a cost standpoint, But we 0:12:24.360 --> 0:12:27.720 do expect that they will get cheaper and not everything 0:12:27.800 --> 0:12:29.840 is going to be the lowest cost option because that 0:12:29.920 --> 0:12:33.160 will have been exhausted at a certain point. So thinking 0:12:33.200 --> 0:12:35.200 about these costs a little more, and Louisa, I know 0:12:35.280 --> 0:12:38.440 you've looked into this, what is the most expensive part 0:12:38.720 --> 0:12:41.600 of the projects? So as all they just mentioned, the 0:12:41.679 --> 0:12:45.360 costs for floating winto projects can vary significantly. This depend 0:12:45.480 --> 0:12:47.800 on how far we are from shore, what is the 0:12:47.800 --> 0:12:51.480 water depth in the project location, or even where platforms 0:12:51.480 --> 0:12:55.760 are manufactured, or the topic around commodities and logistic prices. 0:12:55.800 --> 0:12:58.320 There's being said. I think it is sometimes difficult to 0:12:58.360 --> 0:13:02.559 define a benchmark project. But looking at project located fifty 0:13:03.240 --> 0:13:06.480 offshore in a water depth of two hundred meters, for example, 0:13:07.040 --> 0:13:10.560 we predict that turbinds are the most expensive cost element. 0:13:10.800 --> 0:13:14.120 This account for around thirty percent of the total cost, 0:13:14.400 --> 0:13:18.319 and the second and third most expensive elements are export 0:13:18.400 --> 0:13:24.119 system and platforms, which vary between twenty and These turbines 0:13:24.160 --> 0:13:27.320 are dramatically different from the ones that we're seeing in 0:13:27.480 --> 0:13:30.200 other on and after our projects. I'm just trying to 0:13:30.360 --> 0:13:34.240 think about, like, are the cost essentially verily consistent, it's 0:13:34.320 --> 0:13:37.600 just all of the additional installation that's the problem, or 0:13:38.040 --> 0:13:40.880 they just fundamentally different pieces of kits pretty much the 0:13:40.960 --> 0:13:45.080 same kind of machines. Offshore wind turbines are hugely bigger 0:13:45.120 --> 0:13:47.280 than those you see on shore. Some of the latest 0:13:47.280 --> 0:13:49.880 models are almost as tall as the Eiffel towers. So 0:13:49.920 --> 0:13:52.400 when you're thinking of one of these commercial scale projects, 0:13:52.640 --> 0:13:56.040 think of a hundred Eiffel towers with spinning fans on 0:13:56.080 --> 0:13:59.200 the top, each sitting on a floating platform. They're the 0:13:59.240 --> 0:14:01.800 same kind of technology that sits on top of a 0:14:01.840 --> 0:14:05.640 typical bottom fixed offshore wind foundation. Although that that you 0:14:05.679 --> 0:14:07.599 do need to tune some of the some of the 0:14:07.679 --> 0:14:09.640 kit in the top of the turbine, some of the 0:14:09.679 --> 0:14:13.079 controller and so the turbine can handle and optimize its 0:14:13.080 --> 0:14:15.959 output on top of a moving structure instead of one 0:14:15.960 --> 0:14:18.560 that's fixed at the seabed. And just as a point 0:14:18.559 --> 0:14:21.520 of comparison, how tall is an onshore wind turbine, but 0:14:21.600 --> 0:14:25.000 they reach to around two high. For the taller ones, 0:14:25.160 --> 0:14:27.800 often they have to rise much higher above the above 0:14:27.840 --> 0:14:31.400 the trees, so you get much taller, slender onshore wind turbines. 0:14:31.640 --> 0:14:34.040 The offshore ones tend to be squat and still tall, 0:14:34.120 --> 0:14:37.120 but they have much longer blades and sit much lower 0:14:37.120 --> 0:14:40.160 above the sea. So given the casts and the head 0:14:40.160 --> 0:14:42.160 winds here, there's a lot of I guess, R and 0:14:42.280 --> 0:14:46.120 D that needs to go into it. Who's looking at 0:14:46.160 --> 0:14:47.960 this market and who do we think is kind of 0:14:48.320 --> 0:14:51.040 men in some respects leading the way. The market is 0:14:51.040 --> 0:14:56.120 currently dominated by renewable energy developers such as A Withdrawal 0:14:56.120 --> 0:14:58.960 of and and full We are looking into extend their 0:14:59.000 --> 0:15:02.880 offshore project in pipeline. But as we mentioned before, oil 0:15:02.960 --> 0:15:05.560 and gas players are starting to become more and more 0:15:05.600 --> 0:15:09.400 interested in the floating offshore wind and so companies as Equino, 0:15:09.600 --> 0:15:13.280 Totel and BP we're broadening. They're trying to broaden their 0:15:13.360 --> 0:15:17.400 portfolio and include more renewable energy projects are also becoming 0:15:17.600 --> 0:15:20.840 more interested in and investing in this type of projects, 0:15:21.160 --> 0:15:23.840 and some of these companies are getting really really ambitious 0:15:23.880 --> 0:15:27.360 of renewable energy in general. Now, floating off shore wind 0:15:27.440 --> 0:15:30.120 or offshore wind in general is a technology that allows 0:15:30.160 --> 0:15:35.120 them to contribute gigawatts towards their renewable energy targets with 0:15:35.320 --> 0:15:38.960 one single project. They're also big infrastructure projects similar to 0:15:39.360 --> 0:15:41.360 the kind of things that they're working on on their 0:15:41.680 --> 0:15:44.880 distant offshore oil and gas platform And so that's where 0:15:44.920 --> 0:15:46.800 we've seen many of the kind of oil and gas 0:15:46.920 --> 0:15:49.440 majors start to look seriously offshore wind over the last 0:15:49.440 --> 0:15:53.200 few years. How well do they perform in storms? So 0:15:53.320 --> 0:15:56.360 that's a really good question, and I think at the moment, 0:15:56.600 --> 0:15:58.960 a lot of the projects that we've seen have been 0:15:59.040 --> 0:16:02.760 installed in the North See now that's a pretty tough environment. 0:16:03.200 --> 0:16:05.560 Although not in the kind of environment that you see 0:16:05.760 --> 0:16:08.160 hurricanes like we see in the US in the America's 0:16:08.880 --> 0:16:12.560 or typhoons in the in the Asia Pacific. The turbine 0:16:12.560 --> 0:16:15.760 makers are already releasing turbines that are so called typhoon resistant, 0:16:16.040 --> 0:16:20.120 and while it may take some modifications to the floating platforms, 0:16:20.320 --> 0:16:23.480 the turbine technology is there, and so we've already seen 0:16:23.880 --> 0:16:28.120 some demonstrator scale floating wind projects in Japan. Those are 0:16:28.160 --> 0:16:30.240 the kind of markets we might have to see typhoon 0:16:30.360 --> 0:16:34.000 resistant turbines in the future, and slight changes to the 0:16:34.040 --> 0:16:36.920 floating wind platform that those turbines sit on top of. Yeah, 0:16:36.960 --> 0:16:40.040 because climate adaptation is coming up more and more frequently. 0:16:40.400 --> 0:16:42.200 I think out there in the world, and you know, 0:16:42.320 --> 0:16:44.400 when we go to conferences, we hear it come up. 0:16:45.360 --> 0:16:48.280 And I definitely think as we're looking at these things 0:16:48.320 --> 0:16:50.640 that are going to be in the ocean that may 0:16:50.720 --> 0:16:54.600 be subject to as you reference, you know, hurricanes or typhoons, 0:16:54.800 --> 0:16:57.960 I imagine those developing this technology will be looking at 0:16:58.040 --> 0:16:59.960 that in some details so that they don't have to 0:17:00.440 --> 0:17:03.200 go back and essentially fix it later. You mentioned the 0:17:03.280 --> 0:17:05.760 North Sea, and you mentioned Japan, and you mentioned the 0:17:05.800 --> 0:17:08.200 coast of California. Where do you think will be the 0:17:08.280 --> 0:17:14.000 leading countries where these will be utilized. Well, we've seen 0:17:14.040 --> 0:17:16.879 the early demonstration projects in countries that are willing to 0:17:16.960 --> 0:17:19.040 pay that premium in order to bring the cost of 0:17:19.080 --> 0:17:22.399 the technology down. Now many of the leading countries are 0:17:22.440 --> 0:17:24.960 already thinking about that scaling up that I said is 0:17:25.480 --> 0:17:28.080 really crucial to bringing costs down. So, for example, the 0:17:28.240 --> 0:17:32.000 UK held the first lease auction offering seabed sites that 0:17:32.359 --> 0:17:36.159 is capable of hosting gigawatt scale floating wind projects. So 0:17:36.280 --> 0:17:38.280 in that auction at the beginning of the year, sites 0:17:38.359 --> 0:17:41.280 that could host fifteen gigawats of floating wind one contract. 0:17:41.400 --> 0:17:43.760 Now the UK is planning two more of those lease 0:17:43.840 --> 0:17:46.920 auctions over the next couple of years, and so that's 0:17:46.960 --> 0:17:49.239 the market was really starting to think about scale at 0:17:49.240 --> 0:17:51.359 the moment, and we're expecting there will be more than 0:17:51.400 --> 0:17:55.440 seven gigawats are floating wind in the UK by other 0:17:55.560 --> 0:17:58.919 markets and markets that don't have sufficient space to install 0:17:58.960 --> 0:18:01.840 bottom fixed projects but are really looking at how to decarbonize. 0:18:02.320 --> 0:18:04.320 So the West coast of the US is another one 0:18:04.600 --> 0:18:09.280 markets like Oregon, California. The continental shelf drops off really 0:18:09.359 --> 0:18:12.080 quickly as you move off the coast, and so we're 0:18:12.119 --> 0:18:14.720 expecting the US to be the second largest floating wind 0:18:14.760 --> 0:18:18.480 market globally, driven by those states that have really ambitious 0:18:18.480 --> 0:18:21.240 for renewal energy targets are struggling to build on shore 0:18:21.240 --> 0:18:24.560 renewables because of local pushback and and other reasons, and 0:18:24.640 --> 0:18:27.560 so now a're seeing offshore wind and floating offshore wind 0:18:27.800 --> 0:18:29.959 as a crucial technology to help them get there. There 0:18:30.000 --> 0:18:32.960 are markets further afield. So in South Korea, offshore wind 0:18:33.000 --> 0:18:36.000 farms already received higher subsidies if they're built in deeper waters, 0:18:36.400 --> 0:18:39.240 if they're further from shore, and so that favors floating 0:18:39.280 --> 0:18:42.440 wind projects. So South Korea's limited space again to god 0:18:42.480 --> 0:18:45.639 bottom fixed projects, and so are expecting the market to 0:18:46.200 --> 0:18:48.840 have an explosion of floating wind over the next fifteen 0:18:48.880 --> 0:18:52.320 years or so and install three gigawats of capacity now 0:18:52.520 --> 0:18:59.200 for a very short break stay with us. So in 0:18:59.320 --> 0:19:02.680 addition to the costs, which we really have discussed and 0:19:02.800 --> 0:19:04.960 we know we can look out into the future and 0:19:05.000 --> 0:19:07.120 try and figure out how these cost of clients might work. 0:19:07.440 --> 0:19:10.840 What are some of the other bottlenecks that are limiting 0:19:10.920 --> 0:19:14.640 the expansion of floating wind that we mentioned, You know inflation, 0:19:14.720 --> 0:19:16.960 which again is tied to costs, but how about things 0:19:17.000 --> 0:19:20.720 associated with supply chains and delivery and even how the 0:19:20.800 --> 0:19:24.359 options are structured. I think the major question than that 0:19:24.520 --> 0:19:28.080 the floating wind industry has to answer right now is 0:19:28.240 --> 0:19:31.119 how to ramp up the supply chain in order to 0:19:31.280 --> 0:19:36.000 commit to such massive scale up and installations. So for 0:19:36.200 --> 0:19:38.720 most of the elements of the wind farms, like the 0:19:38.840 --> 0:19:42.760 turbines platforms in the Morning system. The question is no 0:19:43.000 --> 0:19:46.480 longer if those are technically feasible, but how can we 0:19:46.480 --> 0:19:50.040 reproduce them at a base that is fast enough to 0:19:50.200 --> 0:19:55.000 meet the developers downlines? Right So, for instance, when we 0:19:55.119 --> 0:19:59.479 look at more systems, the solutions used in the floating 0:19:59.480 --> 0:20:02.840 wind for objects have been deployed before in ryland gas, 0:20:03.520 --> 0:20:07.119 but the skill that we're looking right now is completely different. 0:20:07.240 --> 0:20:10.719 We're talking about commercial skill. Projects with dozens of units 0:20:11.160 --> 0:20:14.159 lead into hundreds of marine lines to be supplied all 0:20:14.240 --> 0:20:16.400 at once. I think another thing we need to look 0:20:16.440 --> 0:20:18.280 at is who is going to build these projects, but 0:20:18.320 --> 0:20:20.960 also where, so we need a drastic scale up of 0:20:21.040 --> 0:20:24.800 fabrication facilities. But equally important is the question of people. 0:20:25.000 --> 0:20:28.000 So each floating steel platform has as a load of 0:20:28.080 --> 0:20:30.520 joints that need welding. The industry needs to attract enough 0:20:30.560 --> 0:20:32.760 talent to make sure we've got enough welders to make 0:20:32.840 --> 0:20:35.639 those platforms, to make sure we've got enough engineers to 0:20:35.680 --> 0:20:39.240 design projects, or construction crews to man installation vessels. There's 0:20:39.240 --> 0:20:42.520 also a significant lack of suitable ports to support these 0:20:42.640 --> 0:20:46.160 projects today, So a big floating wind farm will require 0:20:46.359 --> 0:20:49.080 a port with deep waters with plenty of space for 0:20:49.400 --> 0:20:51.920 wet storage in the water and also dry storage somewhere 0:20:51.960 --> 0:20:55.359 in the port. So upgrading existing ports or building new 0:20:55.440 --> 0:20:58.200 ones is going to require a vast amount of government 0:20:58.280 --> 0:21:02.000 and private investment. And how about manufacturing the turbines, do 0:21:02.040 --> 0:21:04.720 you anticipate it will be the existing manufacturers and their 0:21:04.760 --> 0:21:07.720 existing locations or is there in this space And I 0:21:07.800 --> 0:21:11.760 suppose this extends beyond floating wind, but to all wind. 0:21:12.000 --> 0:21:15.240 Is there a drive for localization as there is in 0:21:15.440 --> 0:21:18.159 other industries. Well, that's a really good question because a 0:21:18.240 --> 0:21:20.359 lot of the turbine makers are struggling quite a lot. 0:21:20.480 --> 0:21:23.359 Now we mentioned before, but their input costs arising, so 0:21:23.560 --> 0:21:27.400 labor costs of their factories, logistics costs to deliver components 0:21:27.480 --> 0:21:29.720 to where they need to be, and then the materials 0:21:29.760 --> 0:21:32.520 themselves that make the turbines, all of those things have 0:21:32.600 --> 0:21:36.080