Siemens reveals plan to mass produce offshore wind farms

Plans to dramatically cut the cost of offshore wind energy and ensure that the UK retains its market leading position could be given a major boost if manufacturers mass produce components such as substations and cables.

That is the message from offshore wind energy guru Matthew Knight, who is head of business development at Siemens' Transmission and Distribution division.

Speaking to BusinessGreen, Knight said that the engineering company is seeking to "standardise" offshore wind farm components as part of efforts to boost competition and drive down costs across the fast-expanding offshore wind industry.

Specifically, Siemens wants to mass produce substations at a set size, which Knight argued could cut the cost of transmission by a third.

"The Crown Estate is steering developers to think in similar block sizes. That would help quite a lot," he explained.

"Up to now, if you look at projects that have been built recently - Sheringham Shoal which is 315MW, Thanet which is 300MW, and Lincs which is 275MW - that's three projects for three different customers all plus or minus 300MW.

Knight said that larger Round 3 projects should be built in standard blocks, enabling the supply chain to better predict demand and improve the efficiency of transmission technologies.

"If future projects were building in 300MW blocks or 500MW blocks, that would allow people like Siemens and ABB and Alstom Grid, all under commercial pressure, to optimise the best 500MW substation they could, and that would lead to overall savings," he explained.

"So we're not looking for any kind of collusion in the industry, we're just looking for a degree of uniformity that allows competition to result in better solutions."

Knight added that submitting Round 3 projects to a degree of standardisation could enable the UK to retain its leading market position.

"The UK is actually in quite a unique position here because we've got plans for about half of the offshore wind in Europe," he said. "Germany's got plans for about 25 per cent ... but is building relatively small wind farms. So the UK is actually in an unusual position to set the default size."

Offshore wind energy is being touted by the government as a key technology to help the UK meet its green goals and drive economic growth.

However, the industry is under pressure to cut the high cost of energy to levels similar to that of natural gas to prevent customers facing rising energy bills.

Greater levels of standardisation and co-operation between developers is fast emerging as a potential means of bringing down capital and operating costs.

For example, National Grid, Ofgem and a number of developers are already working on plans to redesign the offshore grid regime so that adjacent Round 3 and Scottish Territorial offshore wind farms can share cables and substations. A study by National Grid last year found that this approach could slash the capital cost of grid connections by up to 25 per cent.

However, there are concerns within the industry that such an approach will also put early wind developers at risk of building expensive infrastructure to help support future projects that could be left stranded if these later wind farms never come to fruition.

National Grid has also already awarded connection agreements for Round 3 wind farms which will allow the sharing of transmission links. But it remains unclear whether customers will be required to bear the risk of offshore wind farm developers building transmission assets that end up not being used to their full capacity.

Knight predicted a decision on the new regime by early next year.