Offshore wind projects see least overruns in energy sector; Three manufacturers dominate US wind
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Offshore wind projects see least overruns in energy sector
Offshore wind projects suffer significantly less delays and cost overruns than other power and utility megaprojects, according to a new report from EY.
Megaprojects from across the power and utility sectors typically run 35% (about $2 billion) over budget and finish about two years behind schedule, the report found.
EY analyzed 100 of the world’s largest firms by capital expenditure on power generation, transmission and distribution and water projects across all asset life cycle stages — from pre-financing through to decommissioning. It found that 64% of these projects experienced delays and 57% were over budget.
Almost three-quarters of hydropower, water, coal and nuclear infrastructure projects were over budget by 49% on average, with hydropower and nuclear projects typically suffering the greatest cost overruns at $4.6b and $4b, respectively. Project delays were longest for coal and hydropower technologies, at nearly three years on average. Offshore wind and gas-powered generation projects saw “significantly less delays and cost overruns”, the report concluded.
Offshore wind projects see less overruns than other large energy projects (Image credit: EY)
Three manufacturers account for three-quarters of US wind capacity
General Electric, Vestas and Siemens accounted for 76% (or 55 GW) of installed wind-generating capacity in the United States as of the end of 2015, according to the US Energy Information Administration (EIA).
The EIA recently started collecting data on wind-turbine manufacturers. It also found that those same three companies accounted for more than 92% of the 8.2 GW of total wind capacity installed in 2015.
Gamesa and Mitsubishi accounted for 6% and 5% respectively of installed capacity as of the end of 2015, although they were less active proportionately during the 2015 calendar. After GE, Vestas and Siemens, the next largest share of new wind capacity during 2015 went to Acciona and Nordex, at 6% and 2% respectively.
First US offshore wind farm about to come online
The first commercial offshore wind farm in the United States will come online this month, according to the EIA.
Located three miles off the southeastern coast of Rhode Island, the wind farm consists of five turbines that will produce 30 MW of electricity for the approximately 1,000-strong population of Block Island adjacent to the farm.
Deepwater Wind began construction on the project in July 2015 and holds two additional leases off the coasts of Rhode Island and Massachusetts for future developments. Although the Block Island wind farm was constructed in Rhose Island state waters, these two additional leases are farther from shore in federal waters.
State waters typically extend out to three nautical miles, and federal waters extend out to 200 nautical miles, forming a much larger area known as an exclusive economic zone, according to the EIA. The National Renewable Energy Laboratory estimates the U.S. has 4,200 gigawatts of potential offshore wind energy, the majority of which is situated in federal waters.
The Bureau of Ocean Energy Management held the first competitive federal offshore commercial wind lease sale in 2013 and auctioned off nearly 165,000 acres for wind-energy development off the coasts of Massachusetts and Rhode Island. It has held four additional auctions in the Atlantic Region since then, and will hold a lease for offshore New York for nearly 80,000 acres on December 15 and for additional areas off the coast of North Carolina in 2017.
BOEM has held five auctions for offshore commercial wind leases since 2013 (Source: EIA)
Deal signed for Russia’s first offshore wind farm
Plans are underway for Russia’s first offshore wind farm, with Karelian Governor Alexsandr Khudilainen and the vice president of Chinese energy company Sinomec signing a 9 billion rubles ($141 million) investment deal.
The White Sea park will have a capacity of 60 MW and is planned for construction between 2017 and 2020, according to the Karelia regional government. The White Sea is an inlet of the Barents Sea in the far northwest of Russia.
The Republic of Karelia is currently dependent on hydro-power generation and on energy imports from the neighboring Murmansk oblast to the north and Leningrad oblast to the south. More than 65 percent of the project equipment will be provided by Russian companies and 200 jobs will be created in the construction phase.
Russia currently has only a handful of wind power projects, none of which are offshore, according to the Norwegian-based Barents Observer.