The global market for offshore wind operation and maintenance (O&M) is expected to grow by 17% annually to €11 billion ($12.4 billion) by 2028, according to new research from Wood Mackenzie Power and Renewables.
The largest contributor is Europe, with €6.7 billion ($7.6 billion) in value, while the Asia Pacific region is keeping up the pace in O&M market size and spend.
Operational offshore wind farms in Europe are relatively young; by 2028, 80% of the installed base will still be within the first half of their design lives. And while subsidy-free projects are commonly seen in established markets, more than 27 gigawatts (GW) of capacity are expected to come out of subsidy in the 2030s. That said, maintenance optimization is playing a key role in maximizing revenue, especially for projects exposed to merchant risks.
"We expect average opex across Europe to drop by 57% between 2019 and 2028, mainly driven by larger turbine ratings, improved turbine reliability, economies of scale in service (due to larger-scale projects), new service practices and clustering opportunities," said Shimeng Yang, report lead and Wood Mackenzie senior offshore wind analyst.
Turbine O&M costs constitute the biggest portion of around 60% of offshore wind opex costs, and Yang said, "Uncertainty caused by key component failures is further pushing costs upwards."
"As such, a proactive approach is highly emphasized to replace key components to reduce turbine downtime and associated revenue losses," Yang said.
Blade erosion and repair cause an estimated 5,000 days cumulative downtime globally and resulting in €61 million ($68.8 million) of direct repair costs and lost revenue, according to Wood Mackenzie.
Daniel Liu, Wood Mackenzie principal analyst, said, “Both turbine design and harsh operating conditions are to blame for the erosion. Newer models have larger rotors for more energy output while leading to higher tip speeds.”
In terms of Balance of Plant (BOP), subsea cable failures pose the highest risks to project development and operation despite 25-year design life of cables. Foundation defects can also be costly but are unlikely to extend immediate impact on operations.
Demand for more-advanced installation vessels in the major component replacement segments is growing, as older vessels do not meet the specifications for installing larger turbine units. Commenting on this, Søren Lassen, Wood Mackenzie senior offshore wind analyst, said, “This trend has been further fueled by an excess supply of installation vessels in the market, which is set to intensify in the mid-2020s when next generation turbines will start to be deployed.”
Almost all offshore wind turbines use condition monitoring systems (CMS), though usage differs by turbine OEMs, such as Siemens Gamesa and MHI Vestas. Tower-top accelerometers and vibration sensors are two of the most technically and commercially mature systems.
Wood Mackenzie’s report recommends that operators analyze the accessibility of offshore wind farms according to project characteristics. From energy production of wind farm, to logistics specifications, from metocean conditions to costs of operation, the result from the accessibility analysis will allow the operator to perform in a cost-effective way to ascertain the competitiveness of the selected logistic concept.
Traditionally, vessels have dominated offshore wind logistics projects – with helicopters barely used. However, more operators are starting to recognize helicopters are highly complementary to vessels and deploying them earlier in the planning process.