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Report: Undersea cables fail more often than predicted

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Report: Undersea cables fail more often than predicted

The start-up in December 2016 of the first U.S. offshore wind farm — the $300 million, 30-MW Block Island Offshore Wind project off the coast of Rhode Island — marked the beginning of a new era for offshore wind in this country, as states including New York, North Carolina and California make plans for big installations of seaborne turbines. A report published March 28 by Fitch Ratings, however, raises questions about the reliability of the undersea transmission cables required to bring power from offshore wind farms to onshore grids.

Examining nine offshore transmission projects in the U.S. and the U.K., Fitch found that "[m]ajor technical outages have exceeded initial expectations, both in the number of occurrences and the cost of repairs." The causes of those outages have varied, indicating that the factors leading to the incidents are unrelated. The duration of the outages ranged from two weeks to several months, which was longer than expected, the report said.

Many of those transmission lines, such as ones connecting the large North Sea wind farms to the U.K. and Northern Europe, run through deep water in harsh conditions. Repairing them is arduous and expensive, and even the rare outage can have major impacts on the businesses of operators and offtakers. Undersea cables connecting offshore wind farms to the national grid "are often the only point of connection between the generating assets (the wind turbines) and the grid, so cable downtime directly limits these assets' ability to provide power to the grid," Andrew Joynt, director of global infrastructure at Fitch Ratings, said in an email. "The probability of such outages is considered low but they are high-impact events and repair work is certainly of higher logistical complexity than onshore transmission."

In other words, unreliable undersea cables could threaten the business model for offshore wind. The long-term reliability of these large transmission projects "remains to be seen," the report's authors concluded.

High stakes, high risk

The report comes at a time of robust growth in offshore wind, both in the nascent North American market and the much more mature European market. The U.S. government plans to offer thousands of acres off the coast of New England and the mid-Atlantic up for leases in the next several years, as states like New York and Massachusetts try to reach ambitious targets for wind and solar power under state renewable portfolio standards. Particularly in the densely populated Northeast, offshore wind farms, though expensive to build, are seen as more viable options for utility-scale power generation than onshore installations.

Developer Avangrid Renewables LLC earlier in March won the right to erect hundreds of wind turbines off the coast of North Carolina, 27 miles off the Outer Banks. That marked the seventh competitive lease sale for offshore wind development in the U.S. The previous auctions generated $58 million in high bids for more than 1 million acres in federal waters.

To be sure, the projects under Fitch's review generally have performed well; the average availability between 2008 and 2015 for all nine projects was 97.6% and the median was 99.7%. Most high-voltage undersea cables are made by experienced manufacturers such as Siemens AG, Prysmian S.p.A. and Nexans, and failure rates due to manufacturing and installation remain low. But the Fitch report added uncertainty to an already high-stakes, high-risk sector.

First installed in 2001, the Moyle Interconnector, a 500-MW two-cable link between the electricity grids of Northern Ireland and Scotland, experienced repeated cable failures over a period of years and operated at 50% capacity from 2012 to 2016, while a low-voltage cable was replaced. Investigators found that the cable's outer installation was faulty. The cost of the partial outage totaled more than $59 million.