Norstec's offshore push

Yesterday saw the first meeting of Norstec, an alliance of offshore wind energy manufacturers that aims to reduce offshore costs and promote investment in the sector. The formation of the group was announced by UK Prime Minister, David Cameron, in April and has grown steadily in members since.

It will be interesting to see if, and how, the group ties into the work of the Offshore Wind Cost Reduction Taskforce, a DECC body that published its first report and recommendations in June 2012.

That report made a number of key recommendations that included a developers programme board to monitor for supply chain bottle necks and share responses to common industry problems, a re-evaluation of contracting structures, a route to fast-track the installation of polymeric HVDC cables and a simplification of deal structures in the financing realm.

So it will be interesting to see how the members of Norstec approach the issue, and their thoughts on reaching the holy grail of £100 MW/h for offshore wind.

Early Norstec members include Vestas and Siemens, a good portent for the success of the group given that manufacturers are not only able to innovate to reduce costs, but can encourage the supply chain to do so too, through bulk ordering and long term agreements.

Dong’s announcement that it will also be an active member of the community also bodes well. As an offshore developer with real clout, and arguably one the firms that is doing most to champion offshore wind as a viable future energy source, Dong can add weight and influence to cost reduction efforts.

There is little doubt that over time, offshore wind costs will fall. And perhaps it’s somewhat short-termist of political powers to pressure the industry when the costs of low carbon energy security are very difficult to price.

Regardless, as the oil and gas sector was able to reduce its costs under CRINE (Cost Reduction Initiative for the Next Era), so too will offshore wind. The challenge will be whether it can move as quickly as its political paymasters demand.