TITLE: Cable Manufacturing Capability Study REPORT No: ER519 Rev 3 CUSTOMER: The Crown Estate AUTHOR: David Notman BSc, CEng, MIET DATE: Executive Summary In January 2012, Cable Consulting International (CCI) was engaged by The Crown Estate (TCE) to study the supply chain for offshore windfarm power export cables with particular emphasis on the requirements of the UK s developers. It was felt that available cable manufacturing capacity was short of that required to meet the needs of the developers and other developers outside the UK. The main thrust of the study was to determine whether this was indeed the case and, if so, to identify the size of the gap. Supply capacity was identified by means of responses to questionnaires sent to manufacturers, public domain information and CCI s existing knowledge. Demand was identified by similar means. Worldwide, 1,095 offshore windfarm projects or projects competing for similar cables were identified. After a critical review the total was reduced to 522 projects with 1,652 individual cable lengths being required. Each project was ranked as having a high, medium or low certainty of proceeding. The key conclusion of this report is that global demand for extruded windfarm export cables and competing requirements, such as interconnector cables, is in excess of global supply and that a significant supply chain gap exists. Opportunities to reduce the gap have been identified and early implementation will yield the greatest benefits. Distribution: The Crown Estate Page 1 of 62 Cable Consulting International Ltd Registered in England and Wales No. 4234974 Registered office: 74 College Road, Maidstone, Kent, ME15 6SL,
Contents 1 Introduction... 5 2 Cable System Technology... 6 2.1 Extruded systems... 7 2.2 Mass impregnated systems... 9 2.3 Manufacturing... 11 3 Cable Supply Capacity... 13 3.1 Existing capacity... 13 3.2 Future capacity... 16 3.2.1 Manufacturing... 16 3.2.2 Increased capacity estimates... 19 4 Cable Demand... 21 4.1 Overview... 21 4.2 Future demand... 22 4.3 Demand estimate methodology... 23 4.4 Demand estimates... 25 4.4.1 Extruded demand... 25 4.4.2 Mass impregnated demand... 28 4.4.3 UK grid connections... 31 5 Issues Affecting Lead Time to Supply... 36 5.1 Manufacturing... 36 5.2 Testing... 36 5.3 External events... 37 6 Other Issues... 38 6.1 Cable design and manufacture... 38 6.2 Extrusion compounds... 38 6.3 Cable installation... 38 6.4 Other plant... 39 6.4.1 Inter turbine and collector cables... 39 6.4.2 Converter stations... 40 6.4.3 Transformers and switchgear... 41 6.5 Offshore networks... 41 7 Reducing the Demand/Supply Gap... 42 7.1 Encourage new manufacturers... 42 7.2 Increase supply capacity... 43 7.3 Increase system voltage... 43 7.4 Cable rating... 44 7.5 Offshore networks... 46 7.6 Reduced frequency transmission... 47 7.7 Common technical specifications... 47 7.8 Common commercial specifications and buying alliances... 47 Page 2 of 62
7.9 Improve UK market conditions... 48 8 Conclusions... 49 Tables Table 1 MI HVDC interconnectors... 10 Table 2 Example manufacturing times... 12 Table 3 Cable manufacturers... 13 Table 4 Manufacturer existing capabilities... 14 Table 5 Manufacturer responses... 14 Table 6 Project certainty... 24 Table 7 Windfarm commissioning... 31 Table 8 TEC register connection dates... 32 Table 9 Commissioning comparison... 32 Table 10 Cable system testing... 36 Table 11 Demand variation with strategy... 46 Figures Figure 1 Technology capabilities... 6 Figure 2 Typical 3 core ac cable... 7 Figure 3 DC land cable... 9 Figure 4 MI cable... 10 Figure 5 Manufacturing flow... 11 Figure 6 Typical manufacturing programme... 12 Figure 7 Base supply capacity... 15 Figure 8 New manufacturing facility... 16 Figure 9 Extrusion towers... 17 Figure 10 Small laying up machine... 18 Figure 11 Turntable... 18 Figure 12 Lapping machine... 19 Figure 13 Increased supply capacity... 20 Figure 14 Worldwide all certainties extruded demand... 21 Figure 15 Worldwide all certainties MI demand... 22 Figure 16 UK high certainty extruded demand... 25 Figure 17 UK all certainties extruded demand... 26 Figure 18 ROW high certainty extruded demand... 26 Figure 19 Global high certainty extruded demand... 27 Figure 20 Worldwide all certainties extruded demand... 28 Figure 21 UK high certainty MI demand... 29 Figure 22 UK all certainties MI demand... 29 Figure 23 Worldwide high certainty MI demand... 30 Figure 24 Worldwide all certainties MI demand... 30 Page 3 of 62
Figure 25 National Grid offshore wind scenarios... 33 Figure 26 Comparison of scenarios... 34 Figure 27 Comparison of scenarios and TEC register... 35 Figure 28 Worldwide all certainties extruded demand... 35 Figure 29 Worldwide all certainties extruded demand... 44 Figure 30 Practical windfarm output... 45 Figure 31 Heating time for 132kV export cable... 45 Appendices Appendix A Three Core Extruded AC Cable Key Components... 50 Appendix B Single Core Extruded DC Cable Key Components... 53 Appendix C Single Core Mass Impregnated DC Cable Key Components... 55 Appendix D Manufacturer Questionnaire and Crown Estate Letter... 57 Appendix E Developer Questionnaire and Crown Estate Letter... 59 Page 4 of 62
1 Introduction In January 2012, Cable Consulting International (CCI) was engaged by The Crown Estate (TCE) to study the supply chain for offshore windfarm power export cables with particular emphasis on the requirements for the UK s Round 2, Round 1 and 2 extension, Round 3 and Scottish Territorial Waters windfarms. In this report, export cables are taken to be cables with a system voltage of 110kV and above for ac applications and 150kV and above for dc applications. Lower voltage cables, such as inter-array cables which typically operate at 33kV, are not considered. It was felt that available cable manufacturing capacity was short of that required to meet the needs of the UK windfarm developers and other developers outside the UK. The main thrust of the study was to determine whether this was indeed the case and, if so, to identify the size of the gap. The scope of the study is as follows: Cable system technology overview Estimate cable demand - Including demand for cables that compete for manufacturing space with windfarm cables Estimate cable supply capacity - Existing capacity and future capacity Factors affecting lead time to supply - Demand and supply factors Other key issues The work described in this report was completed by CCI. Any opinions expressed are those of CCI and do not necessarily reflect the views of TCE. Page 5 of 62
2 Cable System Technology In the UK, Round 2 windfarms and windfarm extensions have typical power outputs in the range 200-600MW and have export cable lengths up to around 80km. Three core alternating current (ac) cables are suitable for these applications and, to date, a transmission voltage up to 150kV has been used. The useful power that can be transmitted over ac cables diminishes with distance and for some of the Round 3 and Scottish Territorial Waters (STW) windfarms, dc cables will be required. To give an indication of the limits of ac transmission and when dc should be considered, a comparison chart produced by one cable manufacturer, Prysmian, is shown in Figure 1. Figure 1 Technology capabilities The chart is only a guide and each windfarm should be assessed on a case by case basis. The assessment should be engineering and economic based and take into account other key items of plant such as substations and, in the case of dc connections, converter stations. In Figure 1 reference is made to fluid filled cable systems. These are filled with a very low viscosity (lower viscosity than water) synthetic hydrocarbon oil and, nowadays, Page 6 of 62
are rarely used for subsea cable systems. If the oil leaks out from the cable, there could be a significant environmental impact. Fluid filled systems were not considered in the study. 2.1 Extruded systems AC applications Extruded systems are used for ac land cable applications up to 500kV. These are usually single core constructions with three separate cables being necessary for a 3 phase system compatible with the UK electricity transmission and distribution network. For subsea ac applications, cables are normally three core constructions with all three phases being bound together and armoured as a single cable. The three core build minimises system losses and is usually more economical than the alternative of three single cores, particularly after installation costs have been taken into account. A typical three core cable build is shown in Figure 2. Figure 2 Typical 3 core ac cable The cable build shown in Figure 2 is used for several UK windfarms up to 150kV. The key components in the cable and their functions are described in Appendix A. If Page 7 of 62
additional protection is required, the cable has to be laid into deep water or it has to be pulled through a long directional drill, a second layer of armour wires can be added. ABB, Nexans, NKT, NSW and Prysmian all have a manufacturing capability for three core designs in the range 110kV to 150kV with Nexans and Prysmian having the greatest service experience. We do not believe that any manufacturers outside Europe have any service experience. At voltages above 150kV, three core ac service experience is extremely limited. However, recently orders have been placed for a 100km long 220kV connection between Malta and Sicily [1] and a 15km long 420kV connection across the Little Belt Strait in Denmark [2]. We are also aware that a 40km long 220kV connection for a non windfarm application in the UK is currently out to tender. It is usual for long length subsea cables to contain a number of factory made joints. The joints are used to connect individual lengths of cable core together and typically are necessary every 10km or so. The joints are required as a result of extrusion limitations or limitations in subsequent processes such as laying up machine weight restrictions. Factory made joints are difficult and time consuming to manufacture and can lead to reduced cable reliability. DC applications Extruded dc cable systems are usually operated as part of a bipole or balanced monopole system whereby two cables are required per circuit; one operating with a positive polarity and the other with a negative polarity. Extruded dc systems were first introduced commercially just over 10 years ago. Up until 2010 all systems have been provided by ABB with the maximum in service voltage being 150kV. In 2010, Prysmian entered the market with a 200kV project [3] and recently orders have been placed with ABB, J-Power (a joint venture between Hitachi and Sumitomo), Prysmian and Viscas (a joint venture between Furukawa and Fujikura) in the voltage range 200 320kV. Whilst the two Japanese manufacturers, J-Power and Viscas, do not yet have any extruded dc service experience, they have both tested systems at 500kV and have published their test results [4]. Page 8 of 62
The East-West [5] Interconnector, which is between Wales and the Republic of Ireland, uses 200kV cables and is due for commissioning later this year. Recent orders placed for a number of far offshore German windfarms are for 320kV extruded cables. Figure 3 shows a typical dc cable for a land application. Figure 3 DC land cable The key components in a subsea cable and their functions are described in Appendix B. As for extruded ac cables, factory made joints are required. These are also difficult and time consuming to manufacture. 2.2 Mass impregnated systems Mass Impregnated, MI, submarine cable designs are available up to 600kV and significant quantities are in service up to 450kV. They are highly reliable and ABB, Nexans and Prysmian all have long established track records. MI systems normally operate in a bipole (two cables per circuit) configuration but there are also a number of examples of operation in a monopole configuration (one cable per circuit). Some notable projects are listed in Table 1. Page 9 of 62
Interconnector Voltage Route Length Date Gotland 1 100kV 100km 1956 Italy Sardinia 200kV 118km 1965 Fenno-Skan 400kV 200km 1989 SwePol 450kV 253km 1999 Basslink 400kV 290km 2005 Long Island 500kV 84km 2007 NorNed 450kV 580km 2008 Italy Sardinia 500kV 420km 2013 Table 1 MI HVDC interconnectors Prysmian have just announced receipt of an order for the supply and installation of a 600kV system [6] for the Western HVDC Link between Hunterston and Deeside with around 800km of cable to be supplied. Figure 4 shows a typical MI cable. Figure 4 MI cable The key components in the cable and their functions are described in Appendix C. As for extruded cables, factory made joints are required. However, these are more straight forward to manufacture and are required less frequently than joints in extruded cables. To our knowledge, no MI cables have been used for windfarm applications to date. There is no reason why they should not be used but it should be noted that most designs of MI cable operate at lower temperatures than extruded designs and, for any given current rating, a larger conductor size will be required. Page 10 of 62
2.3 Manufacturing Figure 5 shows a typical manufacturing flow through a factory capable of producing both extruded and mass impregnated subsea cables. Figure 5 Manufacturing flow Each factory is different; for example, some share plant between processes (extruded cable degassing can take place in a MI cable impregnation vessel), some insert extruded factory made joints in three core cables after laying up and some have separate ac and dc test areas. There are several common processes and often factory personnel are skilled in more than one process and move around as required. Each factory has its own pinch points or bottlenecks with extrusion capability, laying up machine capacity and loadout berth water depth being three examples. Some manufacturers also manufacture ac and dc cables for land applications. The factory planner must optimise the flow in order to ensure waiting times between operations are minimised. Figure 6 shows a 27 week manufacturing programme for a 50km long 132kV three core ac cable for a Round 2 windfarm. Page 11 of 62
Conductor Stranding Extrusion Degassing Lead and Pe Sheathing Intermediate Testing Laying up and Bedding Factory Made Joints Armouring Factory Acceptance Testing Loadout onto Vessel Week 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Continuous Continuous Continuous Continuous Approximately 24 days required Approximately 20 days required Approximately 24 days required Continuous 1 day 5 days Figure 6 Typical manufacturing programme The programme does not have any waiting times for plant or personnel to come available and is the minimum time for manufacture. It is not uncommon for manufacture to take longer. Table 2 shows some typical manufacturing times (i.e. from start of manufacture to completion of manufacture and ignoring any manufacturing lead time) recently quoted by different manufacturers. Factory Cable Type Cable Core Manufacturing Length Length Time A Three core 220kV ac extruded 80km 240km 8 months B Three core 220kV ac extruded 80km 240km 12 months C Three core 220kV ac extruded 80km 240km 18 months D Single core 320kV dc extruded 70km 70km 10 months E Single core 320kV dc extruded 70km 70km 12 months F Single core 320kV dc MI 70km 70km 9 months G Single core 320kV dc MI 600km 600km 24 months Table 2 Example manufacturing times It can be seen from Table 2 that there can be considerable variations in manufacturing time for the same cable. The time from placement of order to the commencement of manufacture is typically 2 years but varies from manufacturer to manufacturer. The award of an order for a long length connection can suddenly result in the successful manufacturer having to add several months onto their quoted lead times. Page 12 of 62
3 Cable Supply Capacity 3.1 Existing capacity In order to estimate existing cable supply capacity, a questionnaire was sent to the 12 subsea cable manufactures listed in Table 3. Manufacturer Main Location Market Activity ABB Sweden An established supplier into the UK market. Exsym Japan Very little, if any, market activity in the UK. JDR UK An established supplier into the UK market. J-Power Japan Have recently supplied a 33kV subsea cable into the UK market and are showing interest at the higher subsea voltages. LS Cable South Korea Have supplied some land cable into the UK and showed some interest in a >200kV dc subsea project a few years ago. Nexans Norway An established supplier into the UK market. Nexans/Viscas JV Japan We believe the JV specifically targets the Asian market. NKT Germany An established supplier into the UK market. NSW Germany Not particularly active in the UK but are active in continental Europe. Parker Scanrope Norway Not particularly active in the UK but are active in continental Europe. Prysmian Italy An established supplier into the UK market. Viscas Japan Are showing interest in the UK at the higher subsea voltages. Table 3 Cable manufacturers The manufacturers in Table 3 were selected on the following basis: Those who have an existing capability to manufacture windfarm export cables. Those who have announced an intention to manufacture export cables. Those who have an inter array cable manufacturing capability and who we thought may have an, as yet, unannounced intention to move up the voltage range. The questionnaire and covering letter from TCE are shown in Appendix D. The notes accompanying the questionnaire defined the manufacturing range of interest; windfarm export cables and high voltage interconnectors with lower voltage cables, such as inter turbine cables, being excluded. Page 13 of 62
Manufacturer confidentiality was of the highest importance and it was made clear to each manufacturer that any information they provided would be aggregated together with other information such that their own capacity could not be identified. One manufacturer required that we enter into a confidentiality agreement. Using public domain information and the general view within the industry, as opposed to any information provided in confidence by a manufacturer, existing export cable manufacturing capabilities are summarised in Table 4. A manufacturer has only been given a tick if their products are considered to be commercially available (awarded an order, published technical papers, product offered in a catalogue, etc). Company 3 Core AC DC DC Extruded Extruded MI ABB Exsym JDR J-Power LS Cable Nexans Nexans/Viscas JV NKT NSW Parker Scanrope Prysmian Viscas Table 4 Manufacturer existing capabilities The responses to the questionnaires sent to the manufacturers are summarised in Table 5. Response No. of Manufacturers 3 Complete questionnaire returned (present and future capacity) Partial questionnaire returned (present capacity 2 only) No current capacity and no intention to enter 1 the market No response (despite reminders) 6 Table 5 Manufacturer responses In order that an as accurate as possible estimate of global manufacturing capacity could be made despite the poor responses, information from the following sources was used: Questionnaires from those manufacturers who did respond Page 14 of 62
Manufacturer web sites and press releases - Useful for establishing product ranges and investment announcements Europacable web site - Europacable is a European wire and cable manufacturer trade association - One particular Europacable document provided information on average extrusion line output for land cables [7] Existing knowledge within CCI - Two of our consultants had senior roles in a project team that specified and built a subsea cable factory capable of producing extruded (ac and dc) and MI(dc) cables up to 500kV - We have visited most major subsea manufacturing plants and have a good knowledge of manufacturers plant and equipment - We have manufacturing programs for a range of subsea projects from a range of different manufacturers Figure 7 shows estimated existing and planned global capacity. Figure 7 Base supply capacity In Figure 7, and throughout the remainder of this report for supply and demand, we have used units of core km. This is because three core cables have a total length of extruded core which is three times the length of the cable and it is important that the additional manufacturing capacity requirement is taken into account. The supply figures do not distinguish between copper and aluminium conductors as most manufacturers have a capability to provide both types and the impact of conductor metal on manufacturing capacity is minimal. Page 15 of 62
We have termed the existing and planned capacity the Base capacity as it represents capacity already in place and capacity increases notified by manufacturers in their completed questionnaires or announced via press releases. For extruded cables, there is an increase in extruded capacity of ~23% from 2012 to 2016 and an increase in MI capacity of ~20% from 2012 to 2015. No later increases were identified. 3.2 Future capacity 3.2.1 Manufacturing It is possible that some increased subsea capacity that has not yet been announced will be added. There are three possible routes for increased capacity: a) An existing, established, high voltage manufacturer expands an existing plant or builds a new plant. b) A manufacturer already manufacturing lower voltage cables increases its voltage capability, either by expanding an existing plant or building a new one. c) A new manufacturer enters the market. Assuming finance and a site with planning permission are available, we estimate it will take 5 or 6 years for a new facility to be planned, constructed, commissioned and produce its first cable. The key steps and the estimated timings for a new entrant into the market are shown in Figure 8. Write technical specs for building and plant Procurement process Build factory shell Manufacture key plant Install and commission key plant Cable and accessory design In house development and testing Prequalification tests Type approval testing (including sea trial) Manufacture first cable Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Figure 8 New manufacturing facility An established high voltage manufacturer would be expected to be able to take 1 to 2 years off the above programme. Page 16 of 62
The capital cost of building a new factory, ignoring any land purchase, clearly depends on the manufacturer s specifications but estimates are in the order of 50 million for a factory capable of manufacturing extruded or MI cable and 70 million for a factory capable of manufacturing both types of cable. For a factory capable of manufacturing extruded ac and dc cables, the key items of plant are as follows: Extruder(s): Most new plants capable of manufacturing up to the highest voltages use vertical extruders which must be housed in towers, often in excess of 100m high. An alternative to a vertical extruder, but less suited to higher voltage, high insulation volume cables, is a catenary extruder. Here a smaller tower ~20m high is required but a catenary tube up to ~120m long must be installed. Insulation design is of critical importance to long term service life and one particular issue with dc insulation design is covered in Appendix B. Figure 9 shows a factory with vertical and catenary extruder towers. Figure 9 Extrusion towers Laying up machine: This is required for three core cables. It twists and binds the three cores, any fibre optic units and the cable fillers together. A photograph of a small laying up machine found on the internet [8] is shown in Figure 10. This size of machine is not suitable for the manufacture of the large cables that are required for windfarm power export and a much larger machine is necessary. The cable drums are replaced with large pans (one for each of the 3 cores) with a typical pan loading capacity in excess of 500 tonnes. Dimensions of a suitable machine are a floor footprint of some 36m x 26m and a height of 30m. Page 17 of 62
Figure 10 Small laying up machine Armouring machine: Including all bedding and serving taping heads, this can have a length in excess of 120m and a maximum width of ~5m. This, along with the laying up machine, is a key piece of plant and requires considerable expertise to specify, set up and operate. Turntables: These are required for cable routing and storage, Figure 11. Modern turntables have weight bearing capacities of around 8,000 tonnes. A typical diameter is 30m. Usually factories have several turntables. Coiling rigs are also required for outside cable storage (providing the cable design is suitable for coiling). Figure 11 Turntable For a mass impregnated facility, the extruder would be replaced with a lapping machine and a drying/impregnation vessel. A laying up machine would not be required. Page 18 of 62
Lapping machine: This is used to apply insulating tapes, either paper or paper/polypropylene/paper laminate (PPL) tapes to form the cable insulation, Figure 12. It is usual for the pads of tapes to be pre-dried and applied in a controlled low humidity environment. Figure 12 Lapping machine Drying/Impregnation vessel: This is a sealed vessel used to dry the taped cable insulation and to impregnate it with compound. The vessel has an integral turntable for cable marshalling. For drying, the vessel is placed under a vacuum and heated. For impregnation, the vessel is pressurised and heated. A typical vessel has a capacity of 1,000 tonnes of cable, a diameter of 20m and a height of 3m. 3.2.2 Increased capacity estimates In order to estimate the impact of future possible capacity increases, we looked at increases in output if three new facilities are added to the base supply capacities for extruded and MI cables described in Section 3.1. Supply output per factory was taken to be the average output of the existing facilities. The first factory was assumed to start delivering cable in 2016, the second in 2017 and the third in 2018. The improvement in global supply capacity is shown in Figure 13. Page 19 of 62
Figure 13 Increased supply capacity In the Figure 13 legend, AC stands for additional capacity. For extruded cables, each capacity increase adds 500 core km into the market. For MI cables, 275 core km is added. Page 20 of 62
4 Cable Demand 4.1 Overview This section provides estimates of worldwide demand for cables that are required for offshore windfarm power export or compete for manufacturing space with the windfarm demand. The methods used to estimate demand and project certainties are described and a series of charts comparing demand with capacity are given for the UK and worldwide. Figure 14 shows worldwide demand for high certainty (green blocks), medium certainty (orange blocks) and low certainty (red blocks) projects requiring extruded cables and it can be seen that there is a large imbalance between demand and available capacity (blue blocks). Figure 14 Worldwide all certainties extruded demand Figure 15 shows a similar chart for mass impregnated cables. Page 21 of 62
Figure 15 Worldwide all certainties MI demand 4.2 Future demand Worldwide cable demand was estimated for subsea power cables that are required for offshore windfarm power export or compete for manufacturing space with the windfarm demand. The main competition for windfarm cables comes from interconnectors with most of the demand being for dc applications such as: BritNed [9]. This is a 450kV mass impregnated connection between the UK and the Netherlands which was completed in 2010. The total cable requirement was around 520km. Western HVDC Link [6]. This is a 600kV mass impregnated connection between Hunterston and Deeside which has just been announced. The total cable requirement is around 800km. There is a much smaller demand for ac interconnectors but, when they are required, cable demand is high. Two examples are: Malta Sicily [1]. This is a 220kV three core extruded connection. The cable is currently being manufactured. The total cable requirement is around 100km, 300 core km. Kintyre Hunterston [10]. This is a 220kV three core extruded connection. The project is currently being planned. The total cable requirement is around 84km, 252 core km. Page 22 of 62
As well as ac and dc subsea cables, the demand estimate has included land dc cables and excluded land ac cables. Land dc cables are usually (but not completely exclusively) manufactured in subsea factories and therefore compete for manufacturing space. Land ac cables are usually (but not completely exclusively) manufactured in dedicated land cable factories and we do not see availability of land ac cables for the UK s windfarm applications presenting any supply chain restrictions. 4.3 Demand estimate methodology In order to estimate worldwide demand, data was drawn from a number of different sources as follows: UK offshore windfarm developers. - A questionnaire was sent to the developers of Round 2, Round 3, Round 1 and 2 extension and Scottish Territorial Waters windfarms. The questionnaire and covering letter from TCE are shown in Appendix E. - The responses from developers were excellent. 34 questionnaires were sent out in total and completed questionnaires or e-mailed/telephoned replies with sufficient information were received for 31 developments. - For the 3 developments without replies, their requirements were estimated from their web sites, other information on the internet and by scaling distances off maps. National Grid Electricity Transmission plc, Offshore Development Information Statement 2010 and Non Technical Summary, 2011 Offshore Development Information Statement. Scottish Hydro Electric Transmission Limited (SHETL), Keeping the lights on and supporting growth. A consultation on our plans for the next decade. Industry newsletters. Manufacturer web sites and press releases. General internet searches. Existing knowledge of forthcoming projects within CCI. Page 23 of 62
In total, 1,095 projects were identified worldwide. These were critically reviewed and the total was reduced to 552 projects. The review removed projects for a number of reasons including duplicates, cancellations, already under construction, projects under 100MW, information obviously incorrect and insufficient information available. For many of the 552 projects, only part information was available. Typically the power transmission requirement and distance offshore was available but the transmission voltage, whether ac or dc and the number of cables required was not available. For these, we estimated the missing information after taking the distance offshore (to determine whether ac or dc) and current practice into account. The average distance offshore of 500 windfarms is 40km and where a distance offshore was not known, this figure was used. No system redundancy was assumed. The 552 projects were determined to require 1,652 cables. With the exception of project information provided by the UK offshore windfarm developers, each project (and any phases identified within a project) was assessed to estimate the likelihood of it proceeding. The quality of data and the project development stage were assessed in order to ascribe a certainty; high, medium or low. The certainty matrix is shown in Table 6. Data Quality Project Development Not Tender/ Consented Consented Contract Poor Low Low Medium Medium Low Medium High Good Medium High High Table 6 Project certainty All information provided by the UK windfarm developers was treated as being high certainty regardless of the project development stage. The information provided by the developers was of a high quality and, given the UK s commitment to offshore wind, it was considered unreasonable to reduce the certainty. Cable delivery dates were estimated by the UK developers for 31 projects and CCI estimated dates for 3 projects. Based on these dates, the dates for the commencement of cable manufacture were estimated. For many of the other projects that were identified, particularly those outside the UK, cable delivery information was not available so it was assumed delivery would be Page 24 of 62
required one year before project commissioning. Where a project commissioning date was not known, delivery in 2015 was assumed for consented projects, 2016 for any projects in progress but not yet consented and 2018 for any projects at the concept or early planning stage. There were several such projects and this resulted in a rather lumpy estimate and, as is described in Section 4.4, some smoothing was performed. 4.4 Demand estimates As for cable supply capacity, cable demand has been expressed in terms of core km. In the charts in the following sections, supply capacity has been shown alongside the demand requirements. 4.4.1 Extruded demand The demand estimate for extruded UK high certainty projects is shown in Figure 16. Figure 16 UK high certainty extruded demand The demand mostly comprises offshore windfarm demand and demand identified by SHETL [11]. Manufacturing capacity figures are also given for comparison. All manufacturers whose capabilities comprise the capacity figures are active in the UK market; they have either supplied export cables for UK projects or have submitted full technical and commercial offers for UK windfarm or interconnector projects in the last 12 months. It can be seen from Figure 16 that demand is close to or slightly exceeds available global capacity over the years 2015 to 2018 and then there is a tailing off. Page 25 of 62
In practice, we suspect there will be some UK project delays and this will phase some demand into later years but, nevertheless, UK high certainty demand will remain a substantial proportion of global capacity. The general expectation is that post 2018 demand will remain high given the overall trajectory of the industry. The effect of adding in UK medium and low certainty projects is shown in Figure 17. Figure 17 UK all certainties extruded demand Most of the low and medium certainty project demand is in the later years and does not compete significantly with the high certainty demand. Figure 18 shows the demand for high certainty projects in the rest of the world. The UK demand shown in Figure 16 is not included. Figure 18 ROW high certainty extruded demand Page 26 of 62
As is mentioned in Section 4.3, some cable delivery requirements had to be estimated for projects in the rest or the world. This resulted in very high demand peaks in 2015 and 2016 and some smoothing has been applied in Figure 18; the total 2014 to 2019 demand was smoothed over these years in proportions 10%, 20%, 20%, 20%, 20% and 10%. Over 95% of the rest of the world high certainty demand is for projects in Europe. Figure 19 shows global demand for high certainty projects from the rest of the world are added to the UK high certainty demand. Figure 19 Global high certainty extruded demand Unless there are some significant delays to a large number of projects, demand will exceed supply from 2014 up to 2018. Assuming demand is phased back to match capacity, high certainty demand will take up the base and new capacities up to 2021. Figure 20 shows the impact when low and medium certainty projects are added. Page 27 of 62
Figure 20 Worldwide all certainties extruded demand In the demand column, each block is the sum of the subsea ac and dc demands and the land dc demand. As for the rest of the world high certainty projects, the medium and low certainty projects have been smoothed. Figure 20 shows all the demand for extruded ac and dc subsea cable and extruded dc land cable that we have identified or estimated. It is clear that significant capacity increases or project delays or cancellations are necessary if supply and demand are to come into step. 4.4.2 Mass impregnated demand Although we do not believe that mass impregnated dc cables have been used for offshore windfarm applications to date, there is no reason why they can t be used. If supply capacity is available, this would provide some relief to the extruded capacity shortfall identified in Section 4.4.1. Figure 21 shows UK high certainty demand. Page 28 of 62
Figure 21 UK high certainty MI demand The effect of adding in UK medium and low certainty projects is shown in Figure 22. Figure 22 UK all certainties MI demand Figure 23 shows the impact when high certainty projects from the rest of the world are added to the UK high certainty demand. Page 29 of 62
Figure 23 Worldwide high certainty MI demand Figure 24 shows the impact when low and medium certainty projects are added. Figure 24 Worldwide all certainties MI demand From Figure 24, it can be seen that total demand, more or less on average, matches capacity. Whilst it could be argued that some of the medium and lower certainty projects may be delayed or cancelled, we do not believe that MI capacity should be relied upon as a substitute for extruded capacity for the following reasons: Our research into MI demand requirements showed several potential projects but there was very little information available regarding power transfer Page 30 of 62
requirements, route lengths, project timings and the like. We believe our MI demand estimates are light. Extruded dc cables are being used at progressively higher voltages and product substitution is taking place. A similar process took place whereby long established fluid filled ac cables at voltages up to 500kV were substituted by extruded designs over a 5 year period or so. We would expect the dc substitution process to take slightly longer but it would not be unreasonable to assume that manufacturers investing in capacity increases will have a preference for extruded applications. 4.4.3 UK grid connections From Section 4.4.1 it is clear that there is a large gap between estimated demand for extruded cables and the manufacturing capacity available to meet the demand. Some phasing back of demand will help to lessen the problem and, to give an indication of what may be possible for UK offshore windfarm developments, the alignment between information provided by developers and information published by National Grid was compared. In the questionnaires, see Appendix E, and other information provided by the UK windfarm developers, the power outputs and commissioning dates for each development (or phase of each development) were given. These are summarised in Table 7. Year Commissioned Cumulative Commissioned 2013 390 MW 390 MW 2014 475 MW 865 MW 2015 1794 MW 2,659 MW 2016 6,435 MW 9,094 MW 2017 6,875 MW 15,969 MW 2018 8,089 MW 24,058 MW 2019 6,550 MW 30,608 MW 2020 5,740 MW 36,348 MW 2021 1,540 MW 37,888 MW 2022 500 MW 38,388 MW 2023 500 MW 38,888 MW 2024 500 MW 39,388 MW Table 7 Windfarm commissioning National Grid regularly publishes a Transmission Entry Capacity (TEC) Register [12] that lists projected dates for connection of new generation into the UK transmission Page 31 of 62
system. The offshore wind data for the 05 March 2012 version of the TEC is summarised in Table 8. Year Scoping Awaiting Consents Under Consents Approved Construction Total Cumulative 2013 424 MW 424 MW 424 MW 2014 500 MW 625 MW 170 MW 1,295 MW 1,719 MW 2015 2,407 MW 1,000 MW 370 MW 234 MW 4,011 MW 5,730 MW 2016 2,954 MW 1,152 MW 4,106 MW 9,836 MW 2017 7,659 MW 300 MW 7,959 MW 17,795 MW 2018 5,524 MW 300 MW 5,824 MW 23,619 MW 2019 5,415 MW 5,415 MW 29,034 MW 2020 960 MW 960 MW 29,994 MW 2021 600 MW 600 MW 30,594 MW 2022 30,594 MW 2023 30,594 MW 2024 30,594 MW Total 26,019 MW 3,377 MW 964 MW 234 MW 30,594 MW Table 8 TEC register connection dates It can be seen from Table 8 that most projects are at the early stages of development. In order to obtain a like for like comparison, the data in Table 8 is only for the windfarms that are summarised in Table 7. The cumulative capacities in Table 7 and Table 8 are shown in Table 9 and it can be seen that the developer and TEC figures are close to each other up 2018. After 2018, developer figures are ahead of the TEC figures and this is most likely as a result of some developers having still to submit TEC requests for some of their later projects. Year Developer TEC Cumulative Cumulative 2013 390 MW 424 MW 2014 865 MW 1,719 MW 2015 2,659 MW 5,730 MW 2016 9,094 MW 9,836 MW 2017 15,969 MW 17,795 MW 2018 24,058 MW 23,619 MW 2019 30,608 MW 29,034 MW 2020 36,348 MW 29,994 MW 2021 37,888 MW 30,594 MW 2022 38,388 MW 30,594MW 2023 38,888 MW 30,594 MW 2024 39,388 MW 30,594 MW Table 9 Commissioning comparison Page 32 of 62
In September 2011 [13] National Grid published a consultation document on their web site that discussed different growth scenarios for offshore wind transmission. Figure 1.3 from the document is shown in Figure 25. Figure 25 National Grid offshore wind scenarios The four scenarios are defined by National Grid in a non technical summary of their 2011 Offshore Development Information Statement [14] as follows: Four future energy scenarios have been developed: Slow Progression, Gone Green, Accelerated Growth and Sustainable Growth and represent a diverse range of potential development outcomes (from 25 GW to 67 GW of installed offshore generation capacity by 2030) which illustrate how the National Electricity Transmission System may possibly evolve over the next two decades. Each of the scenarios (as outlined below) has different levels of offshore generation connecting the electricity network over the period 2011 to 2030, as illustrated in Figure 8. Slow Progression emphasises a slow progression towards the European Union 2020 targets for renewable energy, carbon emissions, reductions, energy efficiency improvements and the UK s carbon emissions reductions targets. Page 33 of 62
Gone Green represents a potential generation and demand background which meets the environmental targets in 2020 and maintains progress towards the UK s 2050 carbon emissions reductions target. Accelerated Growth assumes that offshore generation builds up far more quickly due to a rapidly established supply chain, higher carbon prices and strong government stimulus. Sustainable Growth is similar to Accelerated Growth as it depicts a significant amount of offshore generation connected to the electricity grid by 2030. However the trajectory for offshore wind generation in this scenario is consistent with the establishment of a long-term manufacturing industry within the UK. It is interesting to note National Grid s supply chain comments in the Accelerated and Sustainable Growth definitions. Figure 26 shows a comparison of developer commissioning dates and the four National Grid scenarios. Figure 26 Comparison of scenarios The MW values in Figure 26 are all cumulative values. Figure 26 is not an exact like for like comparison; the National Grid scenario figures, presumably, include all offshore generation which has already been installed or is under construction whereas the developer figures are for new developments. Looking at 2018 to 2022, it can be seen that the developer capacity is above all four National Grid scenarios. This may present an opportunity for cable demand to be phased back, particularly if the Slow Progression or Gone Green scenarios turn out. It Page 34 of 62
could be equally argued that, notwithstanding the supply chain issues, the developers will force through one of other scenarios. Figure 27 extends the comparison to include the TEC register figures. Figure 27 Comparison of scenarios and TEC register Figure 20, which compares extruded cable supply and demand for all demand certainties, has been copied below as Figure 28. It is unlikely that phasing back of some UK demand will overcome the obvious global supply and demand gaps. Figure 28 Worldwide all certainties extruded demand Page 35 of 62
5 Issues Affecting Lead Time to Supply 5.1 Manufacturing A number of issues affect manufacturer lead times to supply. Those associated with an expansion of manufacturing capacity have been discussed in Section 3.2.1 As well as key items of manufacturing plant, it is essential that people with the correct skill sets and experience are used in the project teams that build, commission and operate a new facility. Subsea cable manufacture is complex and difficult and it is worth commenting that we are aware of two companies that exited the market following loss making long length projects. 5.2 Testing Cables and accessories (factory made joints, field joints, land/subsea transition joints and terminations) must all be tested. CIGRE publish a number of recommendations covering ac and dc cable testing and these are recognized within the industry as being best practice. Taking the testing of extruded dc cables up to 500kV as an example, Technical Brochure 496 [15], testing before commencement of manufacture is summarized in Table 10. Test Duration Purpose/Comments Development 1 year These are left to the discretion of the manufacturer and would include electrical resistivity assessments, breakdown tests, space charge measurements, long-term stability checks including the effects of various parameters such as electrical stress, temperature and environmental conditions and an assessment of the sensitivity of the electric stress distribution to the expected variations in cable dimensions, material composition and process conditions. An established manufacturer would not necessarily have to perform all of these. Prequalification 1 year These are electrical tests and are prescribed in detail in TB 496. Assuming no test failures, they have a minimum duration of 360 days. Often purchasers will not consider purchasing a cable system unless it has been prequalified. Type Approval 8 weeks These are mechanical tests followed by electrical tests and are prescribed in detail in TB 496. Duration is around 8 weeks. Often purchasers will not consider purchasing a cable system unless it has been type approval tested and some require contract specific type approval testing. Some purchasers permit established manufacturers to perform type tests in parallel with manufacture at the manufacturer s risk. Table 10 Cable system testing Page 36 of 62
In addition to the Table 10 tests, sea trial tests must sometimes be performed. These are recommended.in cases where laying conditions and/or cable designs differ considerably from earlier established practice and a new entrant into the market would certainly be expected to perform these. 5.3 External events Submarine cable projects by their nature take up large blocks of manufacturing space and the award of a contract to a manufacturer can have a huge impact on lead times for other projects. To give an example, Prysmian have just been awarded a contract to supply and install 800km of 600kV HVDC MI cable with commissioning being in 2015 [6] and, whilst we don t know what Prysmian are currently quoting for similar cable, we would estimate a substantial order for a similar product placed in 2012 would not be start to be delivered until 2016. Planning the loading and work flow through a submarine cable factory is complex, particularly when extruded and MI cables are manufactured with some shared plant and sudden changes can often have a disproportionate impact. From a commercial viewpoint, sales and marketing staff are under pressure to produce accurate sales forecasts and to keep their factories as fully loaded and balanced as possible in line with their forecasts. Anecdotal evidence from some suppliers is that the UK planning, regulatory and consents processes are the most lengthy in Europe and are subject to considerable uncertainties such that they prefer business from other markets. Page 37 of 62
6 Other Issues As well as the impact of export cable supply and demand on UK offshore windfarm development there are a number of other factors that have an impact, either directly or indirectly. Some of these are briefly summarized in the following sections: 6.1 Cable design and manufacture Experience with some of the Round 2 windfarms has shown a number of shortcomings in manufacturers designs and production quality. This has resulted in project delays and an erosion of purchaser confidence. If existing manufacturers increase capacity too quickly or there are new entrants into the market some similar problems should be anticipated. 6.2 Extrusion compounds Most European manufacturers buy in the material that is used for extruded screens and insulation. Two compound manufacturers, Borealis and Dow Chemicals, are the major suppliers with Borealis dominating. Cable manufacturers are therefore dependent on a very small number of key material suppliers and are clearly reliant upon them remaining in the market and supplying materials of the required quality. Any increase in extruded cable manufacturing capacity will need to be accompanied by an increase in compound supply. In Japan, some manufacturers have their own compounding plants. 6.3 Cable installation Cable installation capacity in itself should not present a problem. Several new cable laying vessels have entered the market and some are under construction. Cable laying is relatively quick, ~10km cable per day, and burial, if required, can be performed from smaller burial support vessels at a slower rate. Not all subsea cable installers have the necessary skills and experience to handle windfarm export cables, particularly large three core designs, and a number of Round 1 and Round 2 export cables have been damaged during the installation process. As with cable manufacture, it is essential that sufficient people with the right skill sets and experience are employed. During recent discussions with a number of subsea cable system installers active in the UK market, the installers made the following key points: Page 38 of 62
Laying vessel and marine crew availability is generally good and will remain good with several new vessels under construction. - This view contradicts the view of some Round 2 developers who have experienced difficulties in sourcing installation vessels for shallow water installation and cable jointing. Availability of skilled cable installation, burial and jointing tradespeople and engineers is a problem. - Knowledge of how to handle large three core cables is limited. A higher than expected number of round 2 cables have been damaged during installation. - At a recent conference, one speaker complained that cable jointers are demanding rock star wages. There are no technical specifications or recommendations published by bodies such as IEC or CIGRE that cover export cable installation. The offshore wind industry needs to learn from the oil and gas industry, particularly regarding a lack of detailed and high quality survey data. Risk averse windfarm developers are forcing smaller companies to withdraw from the market. The most contentious issues are: - Who pays for bad weather downtime? - Who pays for the impact of unexpected seabed conditions if cable burial speed decreases or external protection such as rock placement is necessary? 6.4 Other plant 6.4.1 Inter turbine and collector cables Only windfarm export cables and competing cables with similar or higher voltages have been considered in the report. It is clear that demand for inter turbine and collector cables will increase as the number of installed turbines increases. At the lower voltages required for these cables, there are more manufacturers in the market and cable lengths are much shorter, typically <1km for inter turbine cables. However, it seems clear that capacity increases and/or new market entrants will be required to meet the overall demand. Page 39 of 62
6.4.2 Converter stations For dc transmission, converter stations are required; one at an offshore substation and one onshore before connection to the ac network. Two types of converter are available: Line Commutated Converter: LCCs are suitable for use at up to 600kV and above. They are otherwise known as classic converters. They have large footprints. No LCCs have been installed offshore to date. LCCs cannot connect onto passive networks and require an ac network voltage to operate. Voltage Source Converter: VSCs were introduced around 15 years ago. The highest voltage in service is 200kV and 320kV VSC s are currently under construction for offshore installation. Manufacturers consider 800kV VSCs to be feasible. A VSC footprint is around 40% of a LCC footprint. VSCs can be connected onto a passive network. Either extruded or mass impregnated cables can be used with LCCs or VSCs. The cable testing requirements for operation with LCC converters are more onerous than those for VSC converters as, under certain converter fault conditions, polarity reversals can occur. MI cables are available up to 600kV [6] and extruded cables have been tested up to 500kV [4]. We consider that cable system and converter technologies are essentially in step and neither technology is hindering the development of the other. For windfarm applications offshore platform space is at a premium and VSC converters are most suitable. ABB and Siemens are the two established suppliers; they have VSC converters in service and 320kV orders on their books. A third supplier, Alstom, has offered 320kV VSC converters into the market but we do not believe they have any VSC service experience to date. We believe that one of more Asian manufacturers are considering entry into the VSC market. The demand for converter stations in China is currently high and is predicted to be high for several years. As part of contractual obligations, European manufacturers are transferring technology into China and it could be that, when domestic demand is satisfied, Chinese manufacturers will start exporting VSC converters. It will be necessary to ensure that VSC supply does not become a limiting factor. Page 40 of 62
6.4.3 Transformers and switchgear We have not made any formal enquiries into lead times but, anecdotally, transformer lead times are long with up to 2 years being quoted recently. We do not believe that switchgear lead times are as long. Nevertheless, they both form critical parts of substations and high reliability is essential. Secure supply chains for both these items of plant are necessary. 6.5 Offshore networks Offshore dc networks are being considered. The benefits of these are to allow power to be transmitted to where it is needed and to allow shorter windfarm connections into the network. For full connectivity, multi-terminal networks are required but unlike ac systems, where transformers can be used to change system voltage, changing a dc voltage is not straight forward. The operating voltage for a multi terminal system, therefore, needs to be agreed as early as possible so that all systems that may connect into it are voltage co-ordinated. Development of HVDC circuit breaker technology to allow switching is also required. Page 41 of 62
7 Reducing the Demand/Supply Gap This section gives a summary of some possible measures that may help close the gap between demand and supply. 7.1 Encourage new manufacturers As is mentioned in Section 4.4.1, all the manufacturers whose capabilities comprise the manufacturing capacity estimates are active in the UK market. With the exception of Chinese manufacturers, we are not aware of any other manufacturers who could enter the UK market. It is difficult to understand whether Chinese capacity could become available in the future: There is clearly a demand for windfarm export cable in China; the consensus of a number of internet references is a target of 30GW offshore by 2020. One Chinese manufacturer, ZTT, recently announced the development of a 220kV subsea cable [16]. The cable is a single core armoured ac design and is not suitable for long length applications. We do not believe that the manufacturers identified in this report are exporting high volumes of export cables to China. We believe the Chinese demand for export cables is being supplied internally. - This belief is based on land cable systems where domestic manufacturers were encouraged to increase their manufacturing capabilities up the voltage scale, either on their own or in collaboration with a foreign manufacturer with an established capability. Chinese manufacturers that do export land cables tend to export to less developed countries rather than countries such as the UK that are classed as having Very High Human Development by the United Nations [17]. We are aware of a number of quality issues with Chinese land cable systems. A better understanding of Chinese manufacturers capabilities and capacities is necessary before any capacity for the UK market should be relied upon. Page 42 of 62
7.2 Increase supply capacity The gap would clearly be reduced if some increased capacity is installed. estimates assume some new capacity will become available starting in 2016. Our Existing manufacturers with an established capability will be able to commission new capacity faster than a new entrant or someone moving up the voltage range. As well as plant considerations when increasing capacity, development of the supply chain for cable making materials will be necessary to ensure there are no shortages or any over reliance on any one source. Recently three manufacturers mentioned to CCI that they do not believe the projected UK and other demand will happen and quoted uncertainties with project consents and potential changes to regulatory regimes as being germane. A recent news report [18] that the UK Government has declined to grant Centrica consent to develop the 540MW Docking Shoal windfarm for environmental reasons is a case in point. A subsequent report [19] suggests the Government decision may be subject to a judicial review. Convincing manufacturers to act now and giving them as much certainty as possible is key. Notwithstanding any assurances, it could be that some manufacturers will be reluctant to invest. The fear is that the demand boom will be short lived and they will not achieve sufficient returns on their capital. It is worth mentioning that some manufacturers are noticing a downturn in land cable demand with many of them having increased their capacity over the last 5 years or so. 7.3 Increase system voltage The higher the power transmission voltage, the greater the power transfer capacity for any given conductor size. If some of the windfarm developments intending to operate at 132kV ac were increased to 220kV ac, this would result in fewer cables being required. To give an example of a typical 500MW ac connection, three cables are required at 132kV but two are required at 220kV. From the questionnaires returned by the UK developers, ~1,700km of 132-150kV and ~2,900km of 220kV three core cable is required. Page 43 of 62
If, say, 500km of demand could be removed by moving up to 220kV and this is spread over 10 years, this equates to a saving of 150 core km per year. Figure 29, which is a copy of Figure 20, shows worldwide extruded demand and it is clear removing 150 core km per year from the demand column will provide minimal improvement. Figure 29 Worldwide all certainties extruded demand Moving from 220kV to 275kV would also provide a small improvement. All developers have used 320kV for dc transmission and we don t believe there is any scope for increasing the voltage at this stage. 7.4 Cable rating Export cable conductor sizes and types and the number of cables that are required are calculated on the basis that a windfarm is continuously outputting its maximum power. This is a very conservative approach as, in practice, windfarm power output is variable. To give an example, Figure 30 shows a 250MW windfarm output [a] over a one month period. a The output is a derived output based on wind mast data. Page 44 of 62
Figure 30 Practical windfarm output The export cables would be designed to transmit 250MW continuously but, if they were designed to export the actual load, then a smaller conductor size would be required and it may be possible to reduce the number of export cables. On one Round 2, 600MW project CCI is currently working on it is likely the export cable requirement will be reduced from four to three. It is worth commenting that many land cable systems in the UK take variable loading into account and are rated accordingly. The reason why the cable requirement can be reduced when real life loads are taken into account is that the cable and surrounding soil takes time to heat up as a result of thermal capacitance. The deeper the cables are buried, the greater is the thermal capacitance and the longer it takes for a cable to heat up. To give an example, Figure 31 shows that a 132kV windfarm export cable buried 10m deep for a directionally drilled shore landing and running at its maximum rated current loading will take around 25 years to reach its maximum operating temperature. There is clearly a case for reviewing the rating requirement. Figure 31 Heating time for 132kV export cable Page 45 of 62