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The race is hotting up for offshore wind

Oilfield Technology,

Interest in the construction of offshore wind farms is rapidly gaining momentum with countries around the globe beginning to make serious investment in the technology.

The EIC recently reported in its quarterly roundup of the energy industry, the EIC Monitor, that the number of new projects in the renewables sector has risen by 200% in value, quarter on quarter, during the first three months of 2010. While some of these projects may not come to fruition due to planning consents or financing issues, it is certainly encouraging to see so many potential projects on the horizon.

The growth of new projects in the renewables sector in Q1 2010 has been largely driven by the recently announced US$ 150 billion UK Round 3 Offshore Wind project. This project comes about as the UK hits the 1 GW milestone of installed offshore wind turbine power generation, with 336 installed turbines distributed across 11 wind farms in UK waters. The UK currently has over 40 GW of offshore wind projects at various stages of development, which are expected to be installed by 2020.

Within Europe, too, other countries are stepping forward with offshore wind power. The blades have begun turning on Germany’s first offshore wind farm, Alpha Ventus, placed in the North Sea. This project will produce 12 MW of electricity in a pilot project to test the impact to the local environment. The German Environment Minister is quoted as saying they aim to produce 25 GW in offshore wind energy by 2030. This adds to Germany’s currently installed land based wind farm capacity of nearly 26 GW.

France is also aiming to begin construction of offshore wind farms. Later this month, the French Environment Minister, Jean-Louis Borloo, will announce the location of 10 proposed offshore sites for the installation of turbines, with tenders going out for the first 3 GW of capacity by the end of the year.

Further afield, offshore wind is making headlines in other countries that are aiming at reducing their dependence on fossil fuels. China continues to develop offshore wind farms with the recent announcement of the 1.25 GW project off the coast of Lufeng, in the southern Guangdong province. Other projects include a 100 MW farm near Shanghai (now operational), a floating wind farm with 20 MW capacity in Hainan province (part of plans to install 1 GW of floating wind farms by 2015) and a further 200 MW near Hong Kong.

Big headlines are also being made in the USA. After a nine year battle through the courts, Cape Wind Associates has finally gained approval by the U.S. Department of the Interior for a 468 MW wind farm near Cape Cod. However, while this gives the company approval at the federal level, it still faces potentially lengthy opposition at court, with local pressure groups raising many objections.

On the other hand, the outlook in another state, Texas, is significantly smoother. Texas has unique coastal sovereignty in the USA, with its territorial boundary extending over 10 miles from the coast – in contrast with 3 miles for the other states. This means that wind companies wishing to build projects within this area need only lease the land from the Texas General Land Office. Additionally, Texas has a history of offshore construction, and so local objections are fewer.

EICDataStream which tracks more than 7800 global energy supply chain projects reveals that there are currently 65 active offshore wind farms with a value in the region of US$ 90 billion which will generate 25 GW of power. In addition, there are 83 proposed projects on the table totalling US$ 330 billion which would provide an additional 68 GW of power.

While the UK is currently the main area of activity, significant investment is also being sought in other countries such as Germany, Sweden, Canada, the Netherlands and Norway. The future certainly looks bright for offshore wind.

Author: Mike Major, CEO, The EIC

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