SBM Offshore has slashed the upside potential of the nascent floating offshore wind market by 25% due to challenges the sector is experiencing that must be “de-bugged”.
Last year, the Netherlands-based contractor estimated that the market would have an installed capacity of between 6 gigawatts and 16 GW by 2030.
However, chief executive Bruno Chabas said while the capacity of projects to be sanctioned “remains high,” the maximum of its previous guidance has been cut to 12 GW because some potential projects have been delayed.
“We know (the market) will take time to materialise as the economics remain challenging,” he said, when it comes to the challenges of fabricating what could be hundreds of sub-structures on some proposed projects.
“It’s going to take time… because the floating wind market is not an easy market.”
Chabas said while the auctioning of floating wind farm rights offshore California and Scotland, for example, has been a success, translating those acreage awards into developments is another matter.
“You’re going to have to build 50 or 100 units so you’re really looking at a production chain type of thing… you’re looking at complexities which are second to none.
“All of this generates a lot of uncertainty, a lot of risk and a lot of costs, which have not yet been mastered by the industry at large.”
Chabas told analysts on 23 February that SBM is paying careful attention to risk and reward in this nascent sector, highlighting how problems in the far more mature fixed offshore wind market have badly affected client and contractor profits.
“We don’t want to be in a position of what I have been seeing in the fixed offshore wind market where, basically, nobody in the value chain has been making money.”
Chabas said “a lot of debugging” is needed before an “economically sustainable” floating wind market starts gaining traction.
Despite this reduction in top-end market expectations, SBM remains focused on securing 2 GW of this new market by 2030, leveraging on its turnkey delivery experience in the floating production, storage and offloading market.
It is currently involved in the Provence Grand Large pilot wind project offshore France — claimed to be the first development of its kind to be financed by commercial banks — which will involve three structures designed to generate 8.4 megawatts of power each.
This project — operated by EDF Renewables and Maple Power — is due to be commissioned this year and when up and running will account for around 10% of the installed floating wind electricity generation capacity in the world, which amounted to less than 200 MW in 2022.
The substructures supporting the wind turbines take the form of tension-leg platforms — a proven technology that originated in the oil and gas sector — which is designed to minimise motions and seabed footprints.
SBM said it has learned a lot from this project, with findings incorporated into its standardised Float4Wind concept that it believes can be mass produced, is scalable to host larger capacity turbines, and is suited to deeper water and harsher sea conditions.
Chabas also noted the company is “co-developing floating offshore wind projects and securing seabed rights and relevant permits with partners to better understand the market and accelerate new technology deployment.”
These permit areas include the 200 MW Llyr scheme offshore Wales which will be developed by Floventis Energy, a joint venture between SBM and Cierco Limited.
This scheme is likely to start producing energy in 2026 or 2027.
Floventis will also develop the 60 MW Cademo asset in Californian waters which is due online in 2027.
Offshore Northern Ireland, SBM has partnered with Irish player SBM Offshore NMK Renewables to build the 400 MW North Channel scheme, targeting start-up in 2029 or 2030.