Abstract
This paper reveals that logistics may conservatively amount to 18% of the levelized cost of energy for offshore wind farms. This is the key finding from an extensive case study carried out within the organization of the world’s leading offshore wind farm developer and operator. The case study aimed to, and produced, a number of possible opportunities for offshore wind cost reductions through logistics innovation; however, within the case study company, no company-wide logistics organization existed to focus horizontally on reducing logistics costs in general. Logistics was not well defined within the case study company, and a logistics strategy did not exist. With full life-cycle costs of offshore wind farms still high enough to present a political challenge within the European Union in terms of legislation to ensure offshore wind diffusion beyond 2020, our research presents logistics as a next frontier for offshore wind constituencies. This important area of the supply chain is ripe to academically and professionally cultivate and harvest in terms of offshore wind energy cost reductions. Our paper suggests that a focused organizational approach for logistics both horizontally and vertically within the company organizations could be the way forward, coupled with a long-term legislative environment to enable the necessary investments in logistics assets and transport equipment.
Highlights
According to the Global Wind Energy Council [1], wind energy can potentially cover as much as 25%–30% of the world’s electricity demand by 2050
According to the empirical findings of our case study, an important finding is that DONG Energy entered the market of offshore wind farms as a pioneer when no “traditional” EPCi companies had yet developed skills and competencies to move land-based wind turbine generator (WTG) offshore and build wind farms offshore
Most competitors of Wind Power (WP) in the offshore wind sector in Europe employ 5–50 employees to develop a wind farm where WP, in turn, employs in excess of 1600 people: The case study company acts as both utility, offshore wind farm developer/EPCi and offshore wind farm operator with a multi-contracting governance structure “slicing” up the work tasks into small contract pieces
Summary
According to the Global Wind Energy Council [1], wind energy can potentially cover as much as 25%–30% of the world’s electricity demand by 2050. Be very important for the global wind energy diffusion targets up to 2050. Point to this number of 18% of LCoE based on a definition of logistics throughout the offshore wind farm (OWF) life-cycle, from idea conceptualization and planning through construction, operations/service and, de-commissioning/abandonment of the OWF site. This is the major contribution of the authors’ 14-month long case study conducted at the world-leading offshore wind developer and operator [4,5], DONG Energy Wind Power (WP).
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