Megaprojects in the 10GW range built around “anchor tenant” led development consortia will be needed to make offshore wind a global mainstream energy source, according to Shell New Energies executive vice-president, Mark Gainsborough.
The oil supermajor believes this model — adopted from the retail sector where a prestige brand store is given lower rent to attract other tenants — will be a better means of accelerating and upscaling the build-out of offshore wind farms than the current tender model being employed in certain European countries, which are driven by 2030 national targets.
“Shell believes that instead of organising the next tranche of leases and tenders simply on the basis of meeting national targets in 2030, we would propose that the next phase be thought of as a stepping stone, a de-risking exercise, towards a much bigger offshore wind industry that operates at the scale of the potential resource,” Gainsborough told OWE 2017.
“We believe that a few large, integrated projects up to 10GW, with an anchor tenant who takes the biggest risk for about half the project, need to be developed to ensure we all learn how best to do this.
“Think of the cost savings that could be achieved by constructing several hundred wind turbines continuously, like an offshore assembly line.”
According to Gainsborough, upscaling development would lower cost, create value across the supply chain, and stimulate economic growth.
Shell, which has plans to earmark around $1bn a year for investment in renewable energy sources from 2020, is in the early stages of diversifying its portfolio. In the US, the group is a 50-50 joint venture partner in six operating onshore wind projects, and in Europe, in the Netherlands, together with Mitsubishi, Eneco and Van Oord, it won the 700MW Borssele 3&4 offshore tender in last year.
“A cleaner energy future is both desirable and possible... but this will require action in all sectors of the energy system, and will require scaling up opportunities. Long-term integrated policies on climate, energy and economy will be necessary, along with a power market that sends the right investment signals,” he says.