PROJECT FORCE

OFFSHORE WIND COST REDUCTION

THROUGH INTEGRATED DESIGN
016 PROJECT FORCE 017 PROJECT FORCE

CHAPTER THREE:

MAKING IT
HAPPEN
THE
F
irst conceived by mathematicians working
on game theory in the 1950s, the ‘prisoner’s
OFFSHORE dilemma’ is a concept that explains why
cooperation is not always easy to achieve. It neatly
WIND shows that, depending on the pay-offs of different
outcomes, the most likely result of a ‘game’ of two
PRISONER’S ‘players’ (prisoners in the original version) is non-
cooperation – even when it is in both players’
DILEMMA: interest to work together6.

A GAME OF TRUST Designing, building and installing offshore wind

turbines may not be a classic application of the
prisoner’s dilemma, but as a metaphor it certainly
seems apt. We can think of the various parties in the
offshore wind supply chain as the players in the game,
and the mutually-attractive outcome of lower cost
offshore wind as the result of cooperation through
the killer apps described in Chapter Two.

To make use of the insight afforded by this simple

game theory example, we can take a look at which
of the project FORCE technologies are likely to
require collaboration between parties that may not
occur spontaneously. The illustration overleaf, shows
that the cost (and risk) of implementing the killer apps
does not always fall on the same party as the benefits
that accrue.

The key to unlocking these benefits is the

Integrated Design app: the joined-up design
of the turbine and support structure. The
cost savings are real and achievable with
today’s technology: the only barrier is
commercial.

6 http://www.open.edu/openlearn/history-the-arts/culture/philosophy/the-prisoners-
dilemma-detail
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ADDRESSING THE BARRIERS

There are several options open to the offshore The scoring is based on a traffic light system in
wind sector that can potentially solve the dilemma. which green means that the assessment of the
Here, we assess the options and score each of feasibility, timeliness or impact is very promising,
them for feasibility (how easily the approach can be while amber indicates a note of caution and red
implemented); timeliness (whether the approach indicates real problems.
can realise savings rapidly enough to impact the
current generation of offshore wind farms); and
impact (the potential of the approach to unlock
project FORCE savings).

OPTION 1 of the killer apps, the turbine designer must

MARKET FORCES
Perhaps the most obvious approach is to ‘leave
it to the market’. This strategy is consistent with
the political push for cost reduction through
competition being encouraged in some leading
markets, most notably the UK and Denmark.
But what would it actually look like – and is it a
remedy to the collaboration challenge we have
identified?
This is happening naturally in the market place
be able to directly influence the foundation
design – which is not currently the case. And,
FEASIBILITY as a result of increased competition
while there may be an incentive for the turbine
supplier to also take on the contract for the
foundation, a contract barrier between the
supplier and the foundation designer is likely
to remain – meaning that the kind of intimate
There are signs of this already happening
collaboration required to unlock the benefit of TIMELINESS
the killer apps is not readily possible.

In fact, competition between turbine

Unlikely to result in the intimate collaboration
manufacturers is already leading to turbines that IMPACT required
are marketed on their whole-system levelised
cost of energy (LCoE). But to deliver the savings

OPTION 2
Procurement policies are often not flexible
BUYER-LED ENFORCEMENT FEASIBILITY enough to allow such an approach

Another strategy might be for the buyers

of offshore wind turbines – the project
developers – to make integrated design a
Some buyers are achieving this now but only by
condition of contact awards. For instance,
taking some design risk themselves
when designing procurement exercises a TIMELINESS
developer could request tenders for an
integrated turbine and support structure
package. Scoring review criteria could be
amended to favour truly integrated designs.
More radically, project developers could only
Does not address risk-reward misalignment
request integrated package tenders.
IMPACT
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ADDRESSING THE BARRIERS

OPTION 3 Intellectual Property concerns are likely to

undermine information sharing efforts
GOVERNMENT-LED FEASIBILITY
NFORMATION SHARING

Given the ‘common good’ nature of cost

reduction, there could be a role for government
Getting a centrally co-ordinated scheme off the
to play in removing barriers to integrated TIMELINESS ground would take time
design. This could be through regulation which
requires more integrated design practices
or the publication of recommended practice
documents. Alternatively, government could
take a more active role, perhaps commanding
the central collection and distribution of
information.
IMPACT An effective knowledge-sharing framework
could unlock some of the benefit

support structure elements examined by

OPTION 4 project FORCE. Electrical infrastructure and
There are plenty of precedents to show that this
installation practices are just two additional
‘JIP’ ON INTEGRATION OF DESIGN, areas that would likely yield cost compression
FEASIBILITY approach can yield results
ENGINEERING AND PROCUREMENT as a result of this approach. The guidelines could
be road-tested in detail using a recently
completed project as a baseline to evaluate
A Joint Industry Project (JIP) could offer the the true cost saving impact of the improved
framework needed to unlock the benefit of industry practice – thus building confidence in
JIPs take time to initiate and execute
integrated design. Such a project would need the approach. TIMELINESS
to address contracting structures in order to
better align risks and rewards, including perhaps DNV GL has plenty of first-hand experience
a more complete exploration of alliancing of how Joint Industry Projects can be an
options7. But, crucially, it would also need to effective instrument in helping to maturing
define best practice guidelines for actually technology and industry, including in offshore
An effectively implemented JIP could unlock
implementing an integrated approach to design wind. Participation of stakeholders from across
and engineering much earlier in the project life- the industry (including regulatory bodies) will
IMPACT benefits beyond those identified in Project
FORCE
cycle. By providing a widely accepted industry provide the breadth of perspectives needed
benchmark, the collaborative and integrated for the JIP to establish consensus and allow
approach to design and engineering would, over the early application of knowledge gained
time, become enshrined in industry practice. with confidence.
This would offer benefits beyond the turbine-

7 Whereas traditional contracting structures are predicated on the idea of competition Alliancing arrangements can come in many variants; for instance, they can be project-
between suppliers, ‘alliancing’ refers to the cultivation of long-term collaborative specific, or apply more strategically to a number of projects. They can range from ‘pure’
partnerships between two or more suppliers across the supply chain and their clients. collaborative structures to looser, more informal involvement at the project design stage.
024 PROJECT FORCE 025 PROJECT FORCE

JOINT INDUSTRY
PROJECTS WORK
D
NV GL is a strong advocate of well-targeted numerous legal disputes. In order to address these
and executed Joint Industry Projects and we problems, a guideline was developed by the JIP
have already shown that this collaborative known as ‘CableRisk’, established in August 2012 by
approach can work in the offshore wind industry. DNV GL and 15 partner organisations, including those
Our leading role in the recently completed CableRisk listed below.
project illustrates this.
CableRisk resulted in a subsea power cable guideline:
Problems with subsea cables have affected many a comprehensive technical guide that covers all
offshore wind farms and damage to cables has been project phases of subsea cable projects. It applies to
identified as a major insurance risk for the offshore the entire length of the cable and its surroundings
wind industry. Cable-related problems are costly and
most often arise from inadequate risk identification,
including assessment of project conditions, planning
and execution of works as well as asset management.
WHERE NOW?
lack of planning, sub-standard design and deficiencies Important sections of the 145-page document cover
in how procedures are applied. To date, cabling design of the physical interfaces at offshore units and
Of the options outlined above, while ambitious, a JIP offers the greatest potential to
failures have cost millions of euros in delays and in the landfall area.
unlocking the cost-reducing power of an integrated and collaborative approach to
design, engineering and procurement in offshore wind. DNV GL welcomes discussions
- BOHLEN & DOYEN - JDR CABLE SYSTEMS - TEKMAR ENERGY
with any interested parties who are keen to explore this.
- BOSKALIS OFFSHORE - NORDDEUTSCHE - TIDEWAY OFFSHORE
SEEKABELWERKE SOLUTIONS
Ultimately, whichever path our offshore wind industry takes, we believe that healthy
- DONG ENERGY
- OFFSHORE MARINE - VAN OORD OFFSHORE levels of collaboration are as important as healthy levels of competition. Whilst we have
- ELECTRABEL GDF SUEZ MANAGEMENT WIND PROJECTS
made significant progress on the latter over the last few years, it is now time that we
- IBERDROLA - SIEM OFFSHORE - VSMC start acting like a mature industry – embracing both collaboration and integration.
CONTRACTORS
- INCH CAPE (EDPR, REPSOL)
026 PROJECT FORCE 027 PROJECT FORCE

ABOUT THE AUTHORS ABOUT THE EDITORS

JAMES DOBBIN DAVID QUARTON JENNI CRUICKSHANK OSCAR FITCH-ROY

SENIOR ENGINEER, SENIOR TECHNICAL ADVISOR, COMMUNICATIONS SENIOR CONSULTANT,
TURBINE ENGINEERING TURBINE ENGINEERING SPECIALIST, RENEWABLES STRATEGY & POLICY

James’ main area of expertise is wind turbine
mechanical systems. During his seven years at
DNV GL, he has been involved in eight complete
wind turbine design projects for machines with
power rating from 1MW to 7MW and has
managed two of these projects.
James.dobbin@dnvgl.com
David has over 25 years’ experience in the wind
energy industry. He led the development of the
first international design standard for offshore
wind turbines and is a Fellow of the Institution of
Mechanical Engineers. He has also participated in
the Steering Committee of the European Wind
Energy Technology Platform.
David.quarton@dnvgl.com
Jenni Cruickshank is a communications officer
working closely with the strategy and policy team
at DNV GL. With a background in journalism, Jenni
specialises in content generation, copy editing and
technical proofreading across several disciplines and
technologies within renewables.
Jenni.cruickshank@dnvgl.com
Oscar Fitch-Roy is a senior policy analyst with a
background in marketing and communications.
He is the lead author on a number of industry reports
including “Beyond the bluster: Why wind power is
an effective technology”.
Oscar.fitch-roy@dnvgl.com

JOE PHILLIPS PAUL REYNOLDS ACKNOWLEDGMENT:

HEAD OF STRATEGY & POLICY
Joe is a Chartered Engineer and Head of Strategy
& Policy at DNV GL. His international team provides
targeted support to governments and companies.
He has worked in renewable energy, primarily in
offshore wind, for over 10 years in engineering, project
management and strategic roles. He is the lead author
on a number of industry reports including “Wind
In Our Sails - the coming of Europe’s offshore wind
energy industry”.
Joseph.phillips@dnvgl.com
SENIOR CONSULTANT, DNV GL would like to thank all staff members who
OFFSHORE WIND, provided energetic and imaginative contributions to
project FORCE.
STRATEGY & POLICY
Paul Reynolds is a senior offshore wind consultant
at DNV GL. Previously he was Offshore Wind
Development Manager at RenewableUK where he
co-authored the Cost Reduction Taskforce report.
Paul.reynolds@dnvgl.com
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