RCG appoints Okahara to guide Japan’s offshore wind growth

Tokyo, Japan – The Renewables Consulting Group, an ERM Group company, has appointed offshore wind energy specialist Yoshinori Okahara as a Director in the firm’s Tokyo office.

The appointment will help support the firm’s in-country efforts as the Japanese offshore wind market is currently a hotbed of activity with offshore wind auctions being launched and projects and alliances moving forward. For example, Japan’s Ministry of Economy, Trade and Industry recently announced four offshore wind promising areas – and up to 10 potential areas that require further study – as part of the country’s carbon neutrality plan. Japan aims to build 10 GW of installed capacity by 2030 and 30 GW to 45 GW by 2040.

Okahara will play a central role in supporting RCG’s growth in Japan and internationally as well as developing new revenue opportunities for RCG within Japan and the wider Asia Pacific region. He is also expected to provide leadership with the emerging requirement for owner’s engineering and other renewable project life cycle services.

He has more than 30 years’ experience in civil engineering construction sector with project management, construction management, design, schedule control, risk management, and trouble-shooting roles for both international and Japan domestic projects. Before RCG, Okahara served as acting general manager at Taisei Corporation, where he oversaw the company’s offshore wind program among other duties.

Commenting on the appointment, Gareth Lewis, managing director for the Asia Pacific (APAC) region, said:

“He is joining RCG at an opportune moment as Japan’s offshore developers will be preparing for auctions, securing consents and designing and procuring equipment. With Okahara-san’s extensive offshore experience in other sectors, he brings a wealth of relevant knowledge to the offshore wind sector.” Gareth Lewis – Managing Director, APAC

RCG’s continued growth means the firm can deploy experienced local teams on any renewable energy engagement, backed up by a team of international experts, to deliver high-value market intelligence, management consulting and technical advisory services on any renewable energy assignment in the Asia-Pacific region.

Tokyo, Japan – The Renewables Consulting Group, an ERM Group company, has appointed offshore wind energy specialist Yoshinori Okahara as a Director in the firm’s Tokyo office.

The appointment will help support the firm’s in-country efforts as the Japanese offshore wind market is currently a hotbed of activity with offshore wind auctions being launched and projects and alliances moving forward. For example, Japan’s Ministry of Economy, Trade and Industry recently announced four offshore wind promising areas – and up to 10 potential areas that require further study – as part of the country’s carbon neutrality plan. Japan aims to build 10 GW of installed capacity by 2030 and 30 GW to 45 GW by 2040.

Okahara will play a central role in supporting RCG’s growth in Japan and internationally as well as developing new revenue opportunities for RCG within Japan and the wider Asia Pacific region. He is also expected to provide leadership with the emerging requirement for owner’s engineering and other renewable project life cycle services.

He has more than 30 years’ experience in civil engineering construction sector with project management, construction management, design, schedule control, risk management, and trouble-shooting roles for both international and Japan domestic projects. Before RCG, Okahara served as acting general manager at Taisei Corporation, where he oversaw the company’s offshore wind program among other duties.

Commenting on the appointment, Gareth Lewis, managing director for the Asia Pacific (APAC) region, said:

“He is joining RCG at an opportune moment as Japan’s offshore developers will be preparing for auctions, securing consents and designing and procuring equipment. With Okahara-san’s extensive offshore experience in other sectors, he brings a wealth of relevant knowledge to the offshore wind sector.” Gareth Lewis – Managing Director, APAC

RCG’s continued growth means the firm can deploy experienced local teams on any renewable energy engagement, backed up by a team of international experts, to deliver high-value market intelligence, management consulting and technical advisory services on any renewable energy assignment in the Asia-Pacific region.

London, England – The Renewables Consulting (RCG), an ERM Group company, is strengthening its capabilities and service offerings in the rapidly growing floating offshore wind sector.

As floating offshore wind continues to emerge as a utility-scale option for markets with deep-water seabed areas, the technology has rapidly expanded in the past two years as developers, offtakers and governments are embracing more innovative technology concepts at a large scale.

The first competitive tender for a commercial scale floating sites is currently underway in France, while more projects are set to be offered in competitive processes in Scotland and Norway later in 2021, with plans to lease projects in California also ongoing. Development of new projects of over 100 MW in capacity across at least eight different countries to date has shown floating technology to be a viable power generation option in a wide range of environments.

RCG is active with several key floating wind initiatives:

• In collaboration with European Marine Energy Centre and Innosea, RCG explored opportunities for the Scottish Government for the floating offshore wind and hydrogen supply chains in Scotland and France.
• The Global Offshore Wind Health and Safety Organisation has tasked RCG and its partner companies Tadek and EMEC, in supporting G+ in assessing the health and safety risks associated with future global commercial floating developments.

In response to rapidly expanding market conditions and client requests, RCG has added to its professionals ranks. Yiwen Lu joins RCG as Senior Associate bringing with her a track record of floating offshore wind due diligence and project development. She has been involved in a range of international onshore, offshore and floating wind projects from UK, Europe, Asia Pacific and North America. Our newest Associate, Max Peel, has a background including research into the levelised cost of hydrogen and offshore wind cost modelling.

RCG’s latest floating wind hires – Yiwen Lu and Max Peel.

Dan Kyle-Spearman, Associate Director and RCG’s Floating Offshore Wind Lead, said:

“Floating wind technology has proven itself to be a viable power generation option in a wide range of environments. It is a technology with huge potential and is about to boom. Yiwen and Max joining the team will further add strength to our growing offshore wind team. RCG is well-positioned to support clients to realise commercial opportunities in the floating wind market.” – Dan Kyle-Spearman, Floating Offshore Wind Lead.

RCG is a leading full-service provider of floating offshore wind advisory services globally. Our expertise covers the full floating offshore wind value chain, from development, through construction, to asset management and decommissioning. We think of floating offshore wind as power at scale – technology with the potential to deliver a global energy transition.

ERM has developed the award-winning ERM Dolphyn concept, a first of a kind technology combining electrolysis, desalination and hydrogen production on a floating wind platform – with the hydrogen transported to shore via pipeline. It is an economic and scalable solution, which produces green hydrogen with no carbon emissions at the point of use.

ERM’s Dolphyn concept, combining electrolysis, desalination and hydrogen production on a floating wind platform.

 

Offshore wind has seen a remarkable cost reduction and growth over the last 30 years since the commissioning of Orsted’s 4.95 MW Vindeby Offshore Wind Farm, the first offshore wind project. Floating offshore wind, the next evolution of offshore wind technology, consists of wind turbines installed on floating platforms, held in position with mooring systems attached to the seabed. Floating offshore wind will enable projects to be installed in deeper waters, further offshore.

The offshore wind industry is at an exciting phase, a technology that is now enabling low-cost energy to be supplied at a utility scale anywhere with access to an ocean or lake. Offshore wind is increasingly seen as the powerhouse behind the transition to low-carbon generation and one of the key technologies to replace fossil fuel supply. According to RCG’s Global Renewable Infrastructure Projects (GRIP) database, offshore wind has grown at a CAGR of 35% from 2000 to 2021, therefore doubling in capacity every 30 months.

Exhibit 1 – GRIP plot of global offshore wind growth, in MW

As the industry looks to increase energy generated from offshore wind, there are few shallow water seabed sites suitable for current offshore wind technology. Currently, nearly all offshore wind turbines are installed on monopiles or jackets that are fixed to the seabed. Fixed-bottom offshore wind requires shallow sites of up to 70 m — going deeper makes the size and weight of the foundation structures uneconomical. In the United States, more than 58% of offshore wind resource is in waters deeper than 60 m; it’s 80% for Europe. Clearly a new approach is required to harvest this energy.

The solution is to install wind turbines on floating platforms with sufficient stability, buoyance and damping of wave motions — called floating offshore wind. Floating offshore wind technology is an evolution of platforms developed four decades ago in the oil and gas industries for their deep-water operations. The platforms have been adapted and re-designed to consider the different loads and stability demands required for wind turbines, as well as a significant focus on cost reduction and serial production. Generally speaking, suitable floating offshore wind sites require depths of at least 60 m, but minimum water depths are driven by local conditions.

The main reasons why large floating offshore wind projects aren’t being built today are that current costs are too high and there is insufficient track record for project developers and financial institutions to be willing to take the risk in developing and investing in these projects.

However, there is good news. Analysis conducted by The Renewables Consulting Group shows that floating offshore wind costs will come down significantly over time. However, the rationale may be somewhat and perhaps counter-intuitive.

The analysis shows that the number of turbines installed or deployment is a major, if not the main, cost reduction driver for offshore wind. This same principle also applies to floating offshore wind.

Floating offshore wind is expected to follow similar cost reduction pathways as was seen moving from onshore to fixed-bottom offshore wind — onshore wind created a stepping-stone to support learning, development of supply chain and transferable skills.

Floating costs are currently at a premium compared to fixed-bottom projects at over $200/MWh, however costs are reducing as projects increase in size and lessons are learned. The upcoming 250-MW project in Brittany, France, will have a maximum price of $141/MWh and, considering this will be a competitive auction process, the award price is expected to be well south of $120/MWh. With further deployment, floating wind will become a cost-competitive renewable technology. Floating wind deployment is gradually increasing over time with the largest floating wind project, the 50-MW Kincardine farm, being commissioned this year in Scotland and soon to be overtaken by the 88-MW Hywind Tampen farm currently under construction in Norway. This gradual build-out bolsters confidence in the technology and demonstrates cost reductions.

Exhibit 2 – Plot of LCOE reduction against time

The move to offshore has had challenges, and similarly, floating will have new challenges that need to be considered. Moving from onshore to offshore required installing turbines offshore from either a floating vessel or a self-elevating platform (jack-up vessel), required marinization to protect turbines from the elements and accessing the turbines for maintenance and repair.

Levelized Cost of Energy (LCoE) – the average net present cost of electricity generation over a plant’s lifetime – enables developers, investors and governments to assess and compare costs of energy from different generation sources. RCG has undertaken analysis utilizing IRENA’s Renewable Power Generation Costs in 2020 to assess the trends of costs against time and deployment. Figure 2 shows the LCoE of fixed-bottom offshore wind against time and Figure 3 against deployment. As the figures outline, there is a clear trend showing deployment as a clearer driver of cost reduction than against time. Note that the trend shows an often-neglected rise before reduction, partly driven by moving to sites further offshore, but does show initial challenges in scaling from small-scale demonstration projects to large commercial-scale projects. However, the deployment figure shows that the hump in costs is much shorter in the deployment scale.

Exhibit 3 – Plot of LCOE reduction against deployment

This analysis shows that the expectation that costs fall naturally with time is flawed. If the objective is to reduce costs to compete with mainstream generation, the focus should be on how to facilitate increased deployment. Of course, increasing deployment needs to be combined with ambitious cost reduction pathways together with a considerable effort and investment into R&D and supply chains.

Over the past 20 years, increased deployment has facilitated the following key cost reduction forces for fixed-bottom offshore wind and will again drive costs down for floating wind:

• Learning rate — “learn by doing” in the design, installation and operational phases of projects and applied to future projects, within the project but also learnings from all involved companies.
• Supply chain — simply making more items enables companies to supply at a lower cost (economies of scale), and additionally, a strong pipeline of projects enables investment into production, such as automation, making “step changes” in cost reduction.
• Cost of finance — institutional investors are interested in large projects with low risk. This enables more financing options, increased competition and reduced transactional costs.
• Competition — multiple large-scale projects enables competitive bids which challenges project developers and their suppliers to construct projects in the most efficient and cost effective manner.
• Efficiency in scaling — larger-scale projects dilute fixed costs, leading to supply and installation process efficiencies. Further, increasing turbine sizes reduces the number of platforms required for a given project size.
• Serial production — when there is sufficient scale and technology maturity, serial projection will make individual components and processes more routine and commoditized.

Floating wind will utilize the supply chain fixed-bottom offshore wind has created for turbines, towers and vessels, however the approach to installing wind turbines on floating foundations requires some new approaches. The key cost drivers specific for floating wind and beyond those benefiting from offshore wind experience broadly are:

• Fabrication, manufacturability and serial production of floating platforms — Considering the size of the floating foundations, there is a higher cost compared to fixed-bottom foundations. Optimization to consider the efficient fabrication of large structures, while also designing platform solutions for ease of fabrication. Increased deployment (and refinement of designs) will drive supply chains to serial production of foundation fabrications, which may be one of the biggest ways to reduce CapEx.
• Logistics, both onshore and offshore — Logistics solutions will not be driven by single projects but many projects constructed and installed globally and simultaneously. The global supply chain will need to accommodate the cradle to grave of projects with massive and heavy components sourced and shipped from around the world. There will likely be multiple global hubs, but also local staging areas to ensure effective and efficient movement of goods.
• Reducing project risks and improving bankability — There is a strong appetite from investors and project developers for floating wind, however they require a track record of projects to provide competitive financing and to enable the creation of an investor-friendly asset class. This track record will demonstrate actual project availabilities, turbine performance, liabilities and warranties are achieved once in operation.
• Platform consolidation — There are a significant number of floating platform designs being developed. The cost of fully commercializing a platform is significant, therefore the more platforms are being developed independently, the larger the cost to mature floating wind as a whole to 500+ MW-scale projects. Consolidation to a small number of platforms will enable the market, especially the supply chain, to understand the technology design and fabrication requirements and invest themselves in suitable infrastructure.
• Design optimization — Floating wind projects are being designed to reduce fabrication, installation and operational costs. A holistic approach should consider not only the design of the floater, but also all elements required for a floating projects, from the seabed to the top of the turbine blade, including mooring systems and electrical systems. Operational lives are expected to be over 30 years, therefore ensuring and monitoring asset integrity is critical as well as not selecting the lowest cost option in construction and assessing rather the whole life costs.
• Heavy maintenance — Technician access to turbines for routine maintenance is not expected to be significantly different from fixed-bottom projects; however, replacement of large components on floating platforms poses both new risks and opportunities. There are two main options: undertaking the replacement offshore or towing the units for repair in a port or in sheltered waters. The risk is the lack of track record with these operations for floating wind, the upside is not requiring expensive jack-up vessels.
• Contracting strategies — A different approach is required compared to fixed-bottom wind. Contracts must account for the fact that turbine and floater behavior is much more coupled, affecting installation, performance and operations. Additionally, the key installation contracts will be sourced from different supply chains, where jack-up vessels are no longer needed, but fabrication, mooring and handling vessels are required.

In understanding that deployment is a main cost driver, how can cost reduction be further accelerated? Policy makers and industry can provide the necessary levers and shift their focus from R&D to commercialization, enabling larger floating wind projects and faster buildout to drive down costs quickly. The focus should be on offtake markets, supply chain investments and de-risking finance rather than supporting new floater designs. There will be higher costs for first-mover projects, but these should be viewed as investments into the local supply chain and economy, increasing the local content of local projects and reducing the costs for future projects. Direct investments in supply chain are an alternative mechanism to enhance local industry capacity and capability, and ensure projects are built using local companies.

Glasgow, Scotland – Following a competitive tender, The Scottish Government has awarded the European Marine Energy Centre (EMEC) a contract to explore opportunities for floating offshore wind and hydrogen supply chains in Scotland and France.

EMEC will partner with French engineering firm INNOSEA and London-based Renewables Consulting Group (RCG) to carry out research to understand the technical status of floating wind and hydrogen in Scotland and France and identify ways that collaboration can be encouraged to address challenges of mutual interest.

Floating wind and hydrogen technologies are central to energy decarbonisation strategies in both countries and internationally, collaborative research and development activity can identify new engineering solutions to increase the competitiveness of these technologies.

Towards this aim, the project consortium will evaluate the technical status of the floating wind and hydrogen production components and systems under development, accounting for the impacts of the policy context and innovation programme landscape in the two nations.

The consortium is also tasked with engaging directly with floating wind and hydrogen supply chain companies to seek feedback on existing collaboration successes as well as identify opportunities to facilitate further joined up thinking and cross-border activity.

This spring, the consortium will hold four virtual reflective workshops with French and Scottish industry stakeholders to understand their experiences of international collaboration as well as gather feedback on how future Franco-Scottish collaborative activities can be best supported.

The consortium is especially keen to hear from equipment manufacturers (OEMs), installers, project developers, project designers, trade associations and regional development agencies. Interested parties are encouraged to contact EMEC’s Hydrogen Development Manager, Dr James Walker (james.walker@emec.org.uk), to state their interest in being involved.

The findings of this project will be published in a final report in summer 2021 ahead of COP26 which is set to take place in Glasgow in November 2021.

Paul Wheelhouse, Scotland’s Energy Minister said:

“Scotland’s Energy Strategy recognises the importance of working with international partners to better understand our transition to a net zero economy and energy system. In the run-up to United Nations Framework Convention on Climate Change conference (COP26) in Glasgow later this year, we have an opportunity to increase public awareness around the climate emergency we all face.

“This project, which sees collaboration between Scotland and our friends in France, is in line with our international energy engagement priorities for both hydrogen and offshore wind and will help to support our efforts to develop new renewable energy solutions. I very much look forward to seeing its outcomes and to utilising its findings to inform further evolution of our energy policy as we ramp up our ambition and seek to harness exciting new opportunities as we expand offshore wind in Scotland.”

Within the project consortium, EMEC bring extensive marine energy and hydrogen expertise and are well connected in the relevant Scottish supply chains. INNOSEA bring a strong French perspective to this research project and have worked with EMEC previously to support marine energy developers in Scotland, France and further afield to identify new opportunities, especially in hydrogen. RCG are leaders in floating wind and will lead in this project on the stakeholder engagement aspects, working to collate feedback from industry partners.

Dr James Walker, Hydrogen Development Manager at EMEC, said:

“International collaboration and dissemination of lessons learned in innovation are integral to seeing progress in the development of floating wind and hydrogen production technologies. Both are also key aspects of EMEC’s work in testing and demonstrating the energy system of the future and we are delighted to be bringing this experience to support delivering this project.

“We look forward to working with INNOSEA and RCG, and to engaging with a broad range of industry stakeholders in Scotland and France to develop recommendations for the Scottish Government on means of best supporting collaborative innovation in these sectors.”

Hakim Mouslim, Chief Executive Officer at INNOSEA, said:

“Working with international partners in the transfer and integration of expertise in different marine renewable sources is very much at the heart of our work at INNOSEA. We understand that achieving our shared goals on climate change goes far beyond traditional thinking on renewable energy. Achieving net zero is a global endeavour, and we are really honoured to join EMEC and the RCG to accelerate learning and innovation in floating wind for green hydrogen production.”

Dan Kyle Spearman, Associate Director and Floating Wind Lead at RCG, said:

“Exploring new engineering solutions for floating wind linked to green hydrogen production is going to be an important innovation for the energy transition. I look forward to working with EMEC and INNOSEA to identify opportunities and challenges. I’m excited to work in this collaboration between industry and government and in particular working with the Scottish and French supply chains to accelerate these promising technologies.”

 

Notes:

EMEC

Further information on EMEC can be found here:

http://www.emec.org.uk/press-release-emec-to-explore-franco-scottish-windhydrogen-collaboration/

http://www.emec.org.uk/facilities/hydrogen/

 

The Scottish Government

Further information on the project and the call for tender is available here:

https://www.publiccontractsscotland.gov.uk/search/show/search_view.aspx?ID=NOV400170

The Scottish Government Office in Paris is part of a network of Scottish Government Offices abroad, whose objectives are to promote innovation and investment and to strengthen cultural and economic links between Scotland and France. Further information here:

https://www.gov.scot/policies/international-relations/international-offices-paris/

The 26th UN Climate Change Conference will take place in November 2021, at the Scottish Event Campus (SEC) in Glasgow.

More information on Scotland’s Energy Strategy can be found here:

https://www.gov.scot/publications/scottish-energy-strategy-future-energy-scotland-9781788515276/