The WindFloat Atlantic project off Portugal, featuring MHI Vestas turbines. While the floating segment needs to move past the pilot stage, questions around modularity still need to be resolved, said CEO Philippe Kavafyan.
➤ Pushing boundaries on the size of offshore wind turbines still makes sense, says the CEO of turbine maker MHI Vestas.
➤ "The sky has a limit," with installation vessels a key bottleneck.
➤ "Darwinian selection" process for floating wind technology not yet complete.
Earlier this year, Siemens Gamesa Renewable Energy SA pulled ahead of General Electric Co. in the race for greater scale in the offshore wind turbine industry, with the launch of a giant 14-MW machine. With many commentators expecting MHI Vestas Offshore Wind A/S, the joint venture of Vestas Wind Systems A/S and Mitsubishi Heavy Industries Ltd., to follow suit with a supersized turbine launch of its own, S&P Global Market Intelligence spoke Oct. 12 with CEO Philippe Kavafyan about the turbine maker's next move. The newly elected chairman of industry group WindEurope also talked about scaling up floating wind farms, supply chain challenges, coronavirus and Brexit. The following is an edited transcript of the conversation.
S&P Global Market Intelligence: After recent turbine launches by your peers, many are looking to you for the next big move. How important is the large-scale segment and are you working on a new machine? Do you see the competition as an arms race?
Philippe Kavafyan: Bigger is still making sense, so I can confirm to you that our teams are actively working on the next generation. ... We see a trend that is justifying a next step. How far this can go — we see also other elements you need to take into consideration. ... In this case the sky has a limit. ... The consequences of the foundation costs, the capacities of the tower diameters, monopile diameters, the vessels, ... the size of the blades that you need to consider — all these things [are] indicating that it's not going to go forever without limit. But at the same time, we had a 5-MW class, we have a 10-MW class, there's going to be a 15-MW class. ... We see the investments in the supply chain that are already justified with our competitors, but we also see the benefit of having a larger rotor and a larger nominal capacity, which we will announce in due time.
We've been delivering greater [energy cost] reduction in 2020 that even myself a few years ago, I was dreaming of. [Our market] is growing so much that I don't think the question is, "Do I steal my competitor's order?" I think the only question is, "How can we deliver more?" I don't think we focus on market share as much as we do on scaling up. You can see the potential of the fixed-foundation demand plus the emerging floating segment, plus the power-to-X, [and] hydrogen. When you look at the potential demand in five years, in 10 years, in 15 years, I think we should worry only about doing more. ... Not just to beat the other one on price.
|MHI Vestas CEO Philippe Kavafyan.
Source: MHI Vestas
You say the sky has a limit — where are the industry's most immediate bottlenecks?
The vessels are the first that come to mind because the jack-up vessels cannot be in Taiwan and in the U.K. at the same time. Over the last two years, the size of the potential market has doubled. ... You need to grow the competencies, you need to grow the vessel logistics. Even with the larger size of turbines being announced, you see investments in the vessels, even some announcements for [U.S.] Jones Act-compatible vessels for the U.S., you see movements of significant players to prepare for the growth in Asia. ... Yes, there are bottlenecks, ... but the potential of things to come is such that it's easy to justify investment.
Where are we with scaling up floating wind? Industry voices are increasingly calling for a move away from pilot projects. And is the current policy environment adequate?
I'm very much in line with [those who say] we don't need more pilots; we need commercial projects. This is true. At the same time, the Darwinian selection of the right technology for the floaters is probably not established yet because we have a significant gap between the production yield of a turbine [built] in a few days and a floater that they can only deliver in a few months. The manufacturability, how modular or ready for serial production the design of the product is, remains ... the absolute priority for the floating segment to resolve before taking off. At the same time, I am convinced that it will go faster than anyone believes today.
There's a lot of good support and good attention today in Europe with the economic recovery plans. ... When you talk about a just and clean transition in the energy sector, we are absolutely checking both boxes very well. For floating, it's time for Europe to support an area where we are still leading but we need to go through this technological and industrial step.
The onshore wind sector is already grappling with turbine blade recycling questions. Where does MHI Vestas stand on the issue?
It's not that just because we produce clean energy it's justified that we have a dirty production. ... We are absolutely conscious of that. ... The calendar, the demographic of the onshore wind farms is making the problem of decommissioning more acute in onshore. We are cooperating with all the research that is [being done] to resolve this.
The more you become mainstream, the more you need to think about how sustainable is your full model. To be honest with you, we are not only exposed when we decommission a wind farm. ... We are going to produce 100-meter long blades, and there's some scrap around the blades that you produce. So the volume of what we need to recycle just out of the factory is not negligible. … I don't have a vacation of 10, 15 years before we get the problem offshore.
Jan. 1, 2021, will bring an end to the Brexit transition period. Is the wind sector ready?
I can speak for the industry because we're not the only ones having a foot in Europe and foot in the U.K. ... Our production site on the Isle of Wight is exporting, not just producing for the U.K. The nacelles come from Denmark. We have a regional industrial footprint for which the U.K. [was never expected] to come out of Europe. There are of course questions.
I think we will have a mutual interest [between] European countries and the U.K. government to find the right trade environment. The North Sea has no borders. ... What we need for the European green transition to be successful is having this optimized development of the natural resources of the North Sea.