BVG Associates October 2016 Newsletter 
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Welcome to our latest newsletter

Every teenager gets the joy of independence, but also feels the harshness of losing support from parents and gets frustrated about still having restrictions imposed on them. The onshore wind industry in the UK is getting to the end of its teenage years, and we are starting to see signs of new activity in the ‘subsidy free’ world. Many turbines are also coming to the end of their teenage years, and we are actively working in lifetime extension of projects. We have been helping to re-locate old turbines and exploring the relative benefits of different extension strategies compared to repowering and decommissioning, as you may have heard me discuss at a Panel Session at RenewableUK’s annual event last week.

Another way to progress in a subsidy-free world is by developing technology delivering a big reduction in cost of energy. It’s worth reading a recent article in the Guardian newspaper about Kite Power Solutions and see what Bill Gates has to say about airborne wind, too. We think that the technology is well worth progressing.

I hope this newsletter is interesting to you. We seek to make a difference in all that we do, so please tell us what you would like more of from us in future.
Bruce Valpy 
Managing Director
BVG Associates
Vattenfall’s Vesterhav Costs – another new landmark!

Vattenfall’s winning bid for the Danish near-shore competition of €64/MWh was at an even lower headline price than DONG Energy’s bid of €72.7/MWh for Borssele I and II. 

The Vattenfall bid went far beyond the benefits that near-shore sites bring to costs, such as lower transmission and vessel cost. It looks to have used all the learnings gained from recent projects to deliver another jump ahead in the industry’s cost reduction journey.

You can read our analysis of Vattenfall’s Vesterhav bid on Giles Hundleby’s blog .

If you’d like to know more about how we can help you model cost impacts or develop your understanding of offshore cost trends, email Giles
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The High Wind Challenge

Allowable wind speeds for lifting activities have a significant influence on the time required for offshore wind turbine installation projects, and hence on cost too. Strong winds delay lifting activity (especially for blades) due to concerns over crew safety and damage to components. Alun Roberts and Kate Freeman have written a blog for The High Wind Challenge (a website for topics related to offshore wind turbine installation) on the main factors contributing to project delays and cost increases. They also analyse the impact of increasing the maximum allowable wind speeds for lifting activities. 

You can find Alun’s and Kate’s blog here and you can download our Boom Lock case study from our website

LM acquisition is a powerful statement of intent by GE

The consolidation in the offshore wind market continues with news that GE has finally taken the step to buy the blade supplier LM Wind Power, from its UK private equity owners. Until now, GE has been unusual among leading turbine suppliers in not having an in-house supplier of blades. 

In the short to medium term, this will not impact market dynamics  significantly. GE has already said LM will continue to act independently and serve other turbine suppliers. GE also has a history of avoiding the cosy (but potentially dangerous) practice of over-reliance on ‘selling to itself’. 

In the longer term, by integrating its scale benefits with LM’s technology and the technologies of its recent purchase, Blade Dynamics, GE could develop some significant USPs to help increase its global market share in both on- and offshore wind. 

You can read Bruce Valpy’s view of the impact of the takeover in this article that first appeared in Recharge.
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Supply chain development in Amsterdam

At the Offshore WIND conference in Amsterdam, Alun Roberts is presenting on “Learning to love supply chain plans”. He’ll be discussing the importance of supply chain plans in the UK, how to get them right, and how they can be a valuable challenge to companies to rethink what they do and become more competitive in the process. He’ll also be covering the different approaches to supply chain development and local content across Europe.

You can find out more about the Offshore WIND conference on this link.

Maturing innovation approaches in offshore wind 

Cost reduction is vital for offshore wind to continue its growth and to compete ‘subsidy free’ in the energy market. As shown in the Vesterhav story, we have seen some big leaps forward this year in competitive auctions. 

For continued cost reduction, technology innovation is needed, such as the introduction of ever-larger turbines. The trade-off between upfront costs, operating costs and energy production will shape the future of the industry. Kate Freeman’s blog addresses how the industry approaches this trade-off, and draws on her presentation at the Wind Europe Summit in Hamburg on offshore wind innovation for cost reduction. You can read her blog here.
Offshore Wind North East 

NOF Energy is hosting Offshore Wind North East on the 16 and 17 November at Sedgefield in the North East of England. 

The event aims to help the UK supply chain take advantage of its 50 years of offshore oil & gas expertise to do business in the wind sector. Attendees will be able to hear from and network with leading offshore wind businesses and fellow energy supply chain companies.

Alun Roberts will be presenting an update on North Sea offshore wind projects on 17 November.
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This month:            



Offshore Wind Conference
24-25 October
Amsterdam, NL

Offshore Wind North East
16-17 November 
Sedgefield, UK

Offshore Renewables – Wind Conference
6-7 December
London, UK
Other  news stories 

Beothuk Energy lands European backer for wind farm on west coast

Innogy to expand into US market

Kite power to take flight in Scotland next year

Dutch ideas float in Korea

Hitachi 5MW set for Spanish test site

Offshore output jumps in Germany

Report: Innovations Can Shave 33 Percent Off LCOE by 2030

Senvion wins order over 203 MW for Trianel Borkum II

SSE breaks ground for Beatrice

Statoil floats Hawaii offshore bid

Scotrenewables installs SR2000 tidal device

The world’s first tidal energy farm could power 175,000 homes

France joins Ocean Energy Systems

OPT to go ahead with wave buoy shipment to Japan

Siemens unveils storage in rocks

Storage in the UK now a ‘reality’, says REA
Merger and acquisition news
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