BTM Cuts Offshore Wind Forecast on German Grid

Global offshore wind turbine installations are expected to grow more slowly than previously expected because of grid delays in Germany and the price of wind power in Sweden, according to Navigant Consulting Inc.

Navigant’s BTM Consult ApS unit cut its cumulative forecast for the five years through to 2016 by 11.6 percent to 23.9 gigawatts of offshore turbines, the company said in an e-mailed report. The largest downgrade of 1,700 megawatts was in Germany.

“Germany has been downgraded despite a huge pipeline of offshore projects in German waters as there is concern in the wind industry over grid availability and grid delays,” Aris Karcanias, an analyst at BTM Consult.

Developers of offshore wind including Dong Energy A/S and EnbW Energie Baden-Wuerttemberg AG suspended projects in Germany on a lack of grid connection agreements, hampering the nation’s goal to build 25 gigawatts of turbines by 2030. The German government endorsed draft legislation in August designed to end delays and provide investor security by making grid operators accountable for financial damage.

Those penalties and high upfront costs will impact future developments, Karcanias said. He also reduced his forecast because Sweden’s incentive program for offshore wind doesn’t deliver a power price “sufficiently attractive to lure investors” when the cost of cable connections paid for by the project owner in Sweden are factored in.

BTM Consult also said the cost of some new European projects increased to more than 4 million euros a megawatt, “which is 1.5 times to more than double the cost of early large scale European and Chinese offshore projects.”

The costs, pushed up as turbines are built further from shore in deep water and more difficult conditions, will begin to fall as new technologies and installation methods are introduced, according to Karcanias.

Europe will lead in offshore turbines to 2016 with Asia accounting for 25 percent, BTM Consult said. It predicts China, the U.K. and Germany will be the three largest offshore wind markets by the end of 2021.

“We congratulate GE on this impressive achievement,” said Jim Shield, Invenergy’s executive vice president and chief development officer. “Our longstanding association has resulted in the installation of more than 2,000 GE wind turbines at Invenergy projects across the United States. As America’s largest independent wind power generation company, we look forward to a continued, successful relationship with GE in the years to come.”

“Congratulations to GE on reaching this milestone. From our vantage point, it appears to be the culmination of working with customers, driving down prices, continuously advancing technology and then backing it all up with responsive service,” said David Boyce, chief executive officer of Wind Capital Group. “I would expect that winning combination to serve them well into the future.”

There does not appear to be any mention of just where the 20,000th turbine was installed, but given that “more than 70 percent of GE’s wind turbine deals so far this year have been overseas” (GE General Manager Matt Guyette in a recent interview), it could very literally be anywhere throughout Europe, Asia, or North America.