Exclusive: Shell and Stiesdal talk floating wind

“The expectation [of the Global Wind Energy Council] was that our resource in floating would lead to something like 6GW of installations by 2030. About a month ago they updated that figure from 6GW to 16GW by the end of 2030. We are really at a transition point here,” said Henrik Stiesdal last week.

In an exclusive interview at our Financing Wind Europe virtual event, Stiesdal A/S’s Henrik Stiesdal and Vincent Fromont, president and general manager of floating offshore wind at Shell-Eolfi, shared insights on the emerging floating wind industry. The session was moderated by Evan Stergoulis, partner at law firm Orrick.

The panel discussed challenges for floating wind, including the need for more demonstration projects to de-risk the technology and grow investor interest.

Current collaboration

Both speakers discussed why interest in floating wind has been growing fast over the last few years. Stiesdal said one reason for the increased momentum is that floating wind companies have been able to learn from fixed-foundation offshore wind so don’t have as many technical issues to solve.

He also said the current generation of offshore turbines could be deployed on floating foundations, but saw little sense in turbine makers devoting resources at present to develop models specifically for floating projects.

“We assume because you could design something different it’s the right thing to do – it’s not,” said Stiesdal, but added that floating-specific turbines would emerge if floating wind became the dominant offshore wind industry.

And it may do. He referred to a study from the International Energy Agency in 2019 that said floating can “supply ten times the world’s electricity demand”.

In general, he said he was happy at the close collaboration and information-sharing among those in the industry. For example, both of the speakers’ companies are working on joint developments using Stiesdal’s TetraSpar foundation, which a lot of their competitors are directly learning from.

This knowledge sharing is paying off in two ways.

First, it is de-risking the technology, which the speakers said is a priority. Fromont said that de-risking the technical aspects has accelerated in the last two years, because of demonstrator projects. These projects help operators to discover what works and what doesn’t, to improve the technology.

Second, floating wind farms are achieving commercial maturity faster than what was seen with fixed foundation projects.

“It has really been impressive to see how this has moved from being very fringe-like out on the side to become something obviously not mainstream yet but is still set on the trajectory for that,” Stiesdal said. Fromont added that “majors like Shell are really pushing for floating because it’s one of the good vehicles which can accelerate the development of offshore wind globally”.

Incoming competition

But they said that collaboration would give way to more competition.

This is coming soon for this fast-developing industry, especially as tenders are being opened frequently around the world. Fromont mentioned the upcoming Scottish and French floating tenders, and argued that governments would need to support tenders by helping companies build a supply chain. For example, this is happening in France which is pushing to build a supply chain.

Stergoulis added there is a floating industry now because Germany and the UK put in the work to build a floating supply chain.

They said state support helped to explain the current camaraderie. If private firms can rely on helpful polices, they afford to share information more freely.

This government support will also enable the sector to attract the early investment that is needed to scale, and make lenders more comfortable. Stiesdal said “it is clear here that we are at a kind of inflection point with regards to financing” where greater investments are needed so the industry can “get big fast”.

From technical challenges to the financial side, the current demonstration projects are key. You can watch the panel in its entirety here.