Ørsted Exec: Offshore Wind Picking Up Speed, Despite Challenges

Innovation, repeatability, collaboration and other learnings have propelled the global offshore wind sector forward as it continues to evolve, according to an executive for one of the world’s biggest offshore wind producers.

However, “I think it’ll be a long time before you see gigawatts of floating offshore deploying,” Troy Patton, head of program execution for Ørsted Americas, said on May 8 at the Offshore Technology Conference in Houston. “And what does a long time mean? I’ve been doing this for three decades. Will it happen before I retire? I doubt it.”

Technology consolidation and more developed ports and harbors are needed to help the nascent floating wind sector move forward in the U.S., he said.

“Use the demo sites to demonstrate the technology, the reliability of it, and then consolidate technology so you can use economies of scale and get cost out, cost out, cost out,” Patton said after noting floating wind has potential. “Industrialize where it makes sense. … The Gulf’s a great place to industrialize technology for the industry.”

Ørsted is among the companies exploring floating wind development, having teamed up with Repsol about two years ago in Spain. However, challenging market conditions—inflation, supply chain difficulties and higher interest rates—for offshore wind prompted the Danish company to take a leaner approach to floating wind and exit some areas amid slower-than-expected development. The company booked billions of dollars in impairment charges and canceled some projects in the U.S.

The situation has turned around, with states offering wind project solicitations under better conditions. Inflation has eased, and interest rates have fallen.

“The industry [was] hugely challenged last year,” as some wind developers turned in their power purchase agreements due to economics. “Last year was a low point, and we really feel like we built a lot of momentum since then. We see our installation going in alongside Vineyard [wind farm]. They're doing great work there. We see a lot of the offshore oil and gas contractors rallying with new technologies and methods, work statements, safety so that everything can be done as cleanly and efficiently offshore as possible. … So, I'm excited about the future that that holds.”

Regaining momentum

Financial investment decisions have been taken on Ørsted and Eversource Energy’s Sunrise Wind development and Empire Wind. Dominion Energy is committed to moving forward with its projects.

“We’ve never had this much momentum,” Patton said. “We had seven turbines in the water off the United States a year ago. We’ll have 250 in three years, with projects that we know.”

However, he worries about losing that momentum in the late 2020s due to political uncertainty and not knowing how energy security will take shape in the northeastern U.S. in the coming years.

The Danish wind powerhouse has about 7.5 gigawatts (GW) of offshore wind projects under construction. In the U.S., it operated five of the seven turbines that were that were spinning in federal waters last year near Block Island, Rhode Island. Earlier this year, Ørsted powered up the 130-megawatt South Fork Wind farm off New York, the nation’s first commercial-scale offshore wind farm.

Its 704-MW Revolution Wind farm is under construction offshore Connecticut and Rhode Island, with Sunrise Wind following afterward alongside offshore wind projects being developed by Copenhagen Infrastructure Partners and Avangrid, Equinor and Dominion Energy.

“All of these will be under construction in the next three years. So, there’s an awful lot of activity going on,” he said.

Ørsted is also bringing to the U.S. lessons learned from longtime operations in Europe, including its Hornsea development. One of them is to start small and incorporate learnings while getting bigger, more efficient and lowering costs.

“We started the first installation that we did here [with] 12 turbines. We're going to add 65. We're going to add 82,” Patton said referring to South Fork, Revolution Wind and Sunrise Wind. “So, we’ll have 150 turbines in the water in the next two years.”

The company has also turned to the Gulf Coast, where manufacturing expertise is present in offshore oil and gas, to build up offshore wind.

Technology’s role

Developers are pursuing the projects as the Biden administration targets 30 GW of offshore wind capacity by 2030. Ambitions also include 15 GW of floating wind by 2035.

Ørsted has invested more than $2 billion in the U.S. offshore wind supply chain, according to Patton. This includes investments in the 260-ft ECO Edison, the first Jones Act-compliant service operations vessel for offshore wind. Louisiana-based Edison Chouest Offshore is building the vessel at LaShip in Houma, Louisiana. After delivery this year, the U.S.-flagged vessel will house operations and maintenance crews working at Ørsted Americas projects.

“This vessel should be in the water, floating up the coast, in the next six weeks,” Patton said.

Technology is playing a role as companies like Ørsted work through technology readiness levels.

“We’re pushing 2,500 metric ton foundations into the water now, which has never really been done. We’re pushing crane sizes on heavy lift vessels, which have never really been used outside the big offshore substations as they go in,” Patton said. “We, like a lot of companies, deal with technology readiness levels… before we’re willing to go in the water with an installation that needs to be there for up to three decades or so.”

Some technology can be proven sooner than others, such as electronics and new technology that controls how wind turbines react to storms, Patton said.

“I think we're ready to embrace certain parts of technology sooner,” Patton said. “When it comes to structural elements, that’s probably where we’re the most conservative in wanting to make sure that these turbines can be installed and safely operated for decades.”

Turbines, both onshore and offshore, continue to technologically leap forward, he added. But the big three turbine OEMs have struggled economically in the last three years.

“As a former turbine OEM guy myself, I do feel like you need to produce 1,000 of something at the scale before you really figure it out, and we haven’t really given offshore the chance to do that in the speed that the Brits, especially, were moving in the last decade or so,” he said. “I think we’re entering a safer period now for the industry. It’s safer economically, fiscally for the manufacturers and suppliers, and gives us a chance in the United States to allow the supply chain to catch up.”