A view on steel demand for offshore wind power. Platts 9 th Steel Markets Europe London,

Transcription

1 A view on steel demand for offshore wind power Platts 9 th Steel Markets Europe London,

2 Speaker introduction Speaker Nikolaj Ager Hamann Direct line: Business Analyst, Group Procurement DONG Energy Nesa Allé Gentofte Denmark 2

3 Agenda 1. Introduction to DONG Energy 2. The opportunities in the offshore wind market from a steel perspective 3. The challenge to be overcome to unlock the potential 3

4 DONG Energy at a glance 4

5 DONG Energy is market leading in offshore wind Installed capacity in 2011 MW operated 995 Future trend All of the major players have a pipeline of projects. Many of which have first power in the foreseeable future. 802 DONG Energy reached 1,7 GW in DONG Energy expects to reach 6,5 GW of offshore wind power by Source: DONG Energy and 4COffshore 5

6 Agenda 1. Introduction to DONG Energy 2. The opportunities in the offshore wind market from a steel perspective 3. The challenge to be overcome to unlock the potential 6

7 The role of steel in offshore wind power Port Offshore substation Substructure WTG Steel required per wind farm element for Anholt wind farm Tons Substations Foundations WTG towers Total Source: DONG Energy 7

8 Steel makes up a substantial part of the foundation cost Steel 50% Fabrication 50% Source: DONG Energy 8

9 Foundation design and DONG Energy's expertise Jackets The jacket designs are believed to be the preferred foundation designs for new projects at deeper water depths. The technology still has to be proven for offshore wind energy. DONG Energy are working intensely with optimizing the jacket design with suppliers and partners. Monopiles DONG Energy has extensive experience with the design and performance of Monopiles. The experience is an advantage when we work with our suppliers on optimizing the design further. But it also means that it takes a very convincing business case for a switch to jacket foundations. Monopiles are believed to be uneconomical when water depths increase, but as monopile designs are improved the shifting point is pushed. Source: DONG Energy 9

10 0,06 0,064 0,067 0,07 0,073 0,076 0,079 0,082 0,085 0,088 0,091 0,094 0,097 0,1 0,103 0,107 0,11 The latest generation of monopiles requires large plates Larger monopiles means larger steel plates Accumulated MP mass included in thickness limit Thickness in mm 100% 80% 60% 40% 20% 0% For one of our later projects the plate dimensions reached: Thickness: 110 mm Width 3,9 meters Pile diameter: 7,5 meters length 23,6 meters Total plate weight: 32 tons 10

11 The amount of steel required per MW offshore wind capacity Weighted average DONG Energy offshore foundations Ton of steel plates per MW installed Key observations For the most proximate part of the DONG Energy offshore wind pipeline 181 tons of steel have been required for each MW of turbine capacity installed. The foundation weight depends heavily on the soil conditions, water depth and sea conditions of the specific site. We do not see that the foundations get lighter in the future as there is a trend for turbines to get bigger and water depths to get deeper Source: DONG Energy 11

12 MW and steel potential by 2025 European offshore wind capacity added: Giga Watt Estimated steel orders for offshore wind foundations: Million tons 5,8 6,6 5,8 6,2 7,4 7,7 7,1 1,0 1,2 1,0 1,1 1,3 1,4 1,3 5,0 0,9 2,9 2,8 3,1 3,5 0,5 0,5 0,6 0, Source: IHS Emerging Energy Research and DONG Energy 12

13 Agenda 1. Introduction to DONG Energy 2. The opportunities in the offshore wind market from a steel perspective 3. The challenge to be overcome to unlock the potential 13

14 The cost of energy challenge Bloomberg New Energy Finance Levelised Cost Of Energy USD/MWh Marine wave Marine tidal STEG LFR STEG tower & heliostat STEG parabolic trough + storage Fuel cells Wind offshore STEG parabolic trough STEG tower & heliostat w/storage PV csi Biomass anaerobic digestion PV thin film PV csi tracking Biomass gasification Geothermal binary plant Biomass incineration Landfill gas Municipal solid waste Wind onshore Geothermal flash plant Large hydro Small hydro Nuclear Natural gas CCGT Coal fired CHP DONG Energy 2020 target 2% LCOE BNEF EU Carbon Forecast Q Central Scenario Q Central Scenario 7% 14% 17% $1,058/MWh, $861 /MWh, Source: Bloomberg New Energy Finance 14

15 DONG Energy's business model and long term pricing The new model and the implication on the steel industry On a range of the newer offshore wind projects DONG Energy has formed Joint Ventures with institutional investors. This development has been a key enabler of the recent growth in the market, and will continue to be a very important source for funding. The partner are involved at an early stage of the project and the firmer the business case is the easier it is to attract them. This in turn means that DONG Energy requests price certainty ever further into the future. The steel industry can support the offshore wind power growth by offering fixed prices for longer periods of time. Source: DONG Energy 15

16 Thank you for your attention By: Nikolaj Ager Hamann, or