A view on steel demand for offshore wind power
Platts 9th Steel Markets Europe London, 24.05.2013
Speaker introduction Speaker •
Nikolaj Ager Hamann Email:
[email protected] Direct line: +45 9951 6236
•
Business Analyst, Group Procurement DONG Energy Nesa Allé 1 2820 Gentofte Denmark
2
Agenda 1.
Introduction to DONG Energy
2.
The opportunities in the offshore wind market from a steel perspective
3.
The challenge to be overcome to unlock the potential
3
DONG Energy at a glance
4
DONG Energy is market leading in offshore wind
Installed capacity in 2011 MW operated
Future trend
995
802
• All of the major players have a pipeline of projects. Many of which have first power in the foreseeable future. • DONG Energy reached 1,7 GW in 2012. • DONG Energy expects to reach 6,5 GW of offshore wind power by 2020.
466
150
Source: DONG Energy and 4COffshore
5
Agenda 1.
Introduction to DONG Energy
2.
The opportunities in the offshore wind market from a steel perspective
3.
The challenge to be overcome to unlock the potential
6
The role of steel in offshore wind power
Port
Offshore substation
Substructure
WTG
Steel required per wind farm element for Anholt wind farm Tons
73.700
22.200
49.500
2.000
Substations
Foundations
Source: DONG Energy 7
WTG towers
Total
Steel makes up a substantial part of the foundation cost
Steel 50%
Fabrication 50%
Source: DONG Energy 8
Foundation design and DONG Energy's expertise
Jackets
Monopiles
• The jacket designs are believed to be the preferred foundation designs for new projects at deeper water depths.
• DONG Energy has extensive experience with the design and performance of Monopiles.
• The experience is an advantage when we work with our suppliers on optimizing the design further. • But it also means that it takes a very convincing business case for a switch to jacket foundations.
• The technology still has to be proven for offshore wind energy. • DONG Energy are working intensely with optimizing the jacket design with suppliers and partners.
• Monopiles are believed to be uneconomical when water depths increase, but as monopile designs are improved the shifting point is pushed.
Source: DONG Energy
9
The latest generation of monopiles requires large plates Larger monopiles means larger steel plates Accumulated MP mass included in thickness limit Thickness in mm 100% 80% 60% 40% 20% 0,06 0,064 0,067 0,07 0,073 0,076 0,079 0,082 0,085 0,088 0,091 0,094 0,097 0,1 0,103 0,107 0,11
0%
• For one of our later projects the plate dimensions reached: • Thickness: 110 mm • Width 3,9 meters • Pile diameter: 7,5 meters – length 23,6 meters • Total plate weight: 32 tons
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The amount of steel required per MW offshore wind capacity
DONG Energy offshore foundations Ton of steel plates per MW installed
Key observations • For the most proximate part of the DONG Energy offshore wind pipeline 181 tons of steel have been required for each MW of turbine capacity installed.
250 215
205
Weighted average
181
165 125
• The foundation weight depends heavily on the soil conditions, water depth and sea conditions of the specific site. • We do not see that the foundations get lighter in the future as there is a trend for turbines to get bigger and water depths to get deeper.
2012
2013
2014
2015
2016
Source: DONG Energy
11
MW and steel potential by 2025
European offshore wind capacity added: 2014-2025 Giga Watt
7,4
Estimated steel orders for offshore wind foundations: 2012-2023 Million tons 7,7
1,3
7,1
6,2
1,0
5,8
0,6
3,5 2,8
1,1 1,0
0,9
5,0
2,9
1,3
1,2
6,6 5,8
1,4
3,1
0,5
0,5
0,6
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Source: IHS Emerging Energy Research and DONG Energy
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Agenda 1.
Introduction to DONG Energy
2.
The opportunities in the offshore wind market from a steel perspective
3.
The challenge to be overcome to unlock the potential
13
The cost of energy challenge Bloomberg New Energy Finance – Levelised Cost Of Energy USD/MWh Marine - wave Marine - tidal STEG - LFR STEG - tower & heliostat STEG - parabolic trough + storage Fuel cells Wind - offshore STEG - parabolic trough STEG - tower & heliostat w/storage PV - c-Si Biomass - anaerobic digestion PV - thin film PV - c-Si tracking Biomass - gasification Geothermal - binary plant Biomass - incineration Landfill gas Municipal solid waste Wind - onshore Geothermal - flash plant Large hydro Small hydro Nuclear Natural gas CCGT Coal fired CHP
DONG Energy 2020 target
-17% -
-14% -7% -2% -
0 LCOE
$1,058/MWh, $861 /MWh, -
100 BNEF EU Carbon Forecast
200 Q1 2013 Central Scenario
Source: Bloomberg New Energy Finance
14
300
400 Q4 2012 Central Scenario
500
DONG Energy's business model and long term pricing
The new model and the implication on the steel industry On a range of the newer offshore wind projects DONG Energy has formed Joint Ventures with institutional investors. This development has been a key enabler of the recent growth in the market, and will continue to be a very important source for funding. The partner are involved at an early stage of the project and the firmer the business case is the easier it is to attract them.
This in turn means that DONG Energy requests price certainty ever further into the future. The steel industry can support the offshore wind power growth by offering fixed prices for longer periods of time.
Source: DONG Energy
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Thank you for your attention
By: Nikolaj Ager Hamann,
[email protected] or +45 9951 6236
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