The Netherlands: Cooperation Crucial for Offshore Wind Energy Industry

The European Wind Energy Association (EWEA) has set its targets for installing 40 gigawatts of offshore wind capacity by 2020. Offshore wind is still too expensive, concludes Roland Berger Strategy Consultants.

Offshore wind costs are much higher than for other renewable energy sources, twice as high as onshore wind. The costs can only be reduced by means of a close cooperation throughout the supply chain, advocates a strategic consulting firm.

By June 2011, 3.3 gigawatts of offshore wind capacity were installed in European waters, what was enough to power between 700,000 and 1.3 million homes. The Dutch government welcomes ambitions for the costs reduction. Maarten de Vries, an associate at Roland Berger in The Netherlands, said that this is a great opportunity for Dutch companies, because they are well advanced in offshore technology.

 Teamwork

Installing an offshore wind turbines is a very complex project that depends on many different players. Arnoud van der Slot said that due to this complexity the design and operation of wind farms has hardly been optimized for the heavy demands at sea. He said that the solution lies within the industry itself, therefore there should be a much better collaboration in the supply chain.

Measures to reduce costs and risks

A crucial point is to reduce the interfaces. This requires a contractor who will take overall responsibility for the wind farm designing, the purchase of parts and construction. Parts of the project are then outsourced to subcontractors. In this way, one company has to work with one contact. Risks of budget overruns are also reduced. Another option is entering into strategic alliances, in which several firms of different technological expertise will work together.

De Vries and Van der Slot said that the offshore wind energy companies have come to realize that they can strengthen their competitive advantage just by working together and sharing their expertise. The big players need to open up to cooperation and integration. The smaller, more specialized companies, will have to choose who they want and how far they are willing to go in sharing their expertise and technology. They said that only then the offshore wind industry will be strong enough to meet the high requirements.

[mappress]

Offshore WIND staff, November 29, 2011