Statkraft's return to Northern Europe's "challenging and exciting" offshore wind space

Offshore wind is one of the essential stepping stones to a decarbonised energy system, yet its supply chain is under pressure and achieving a sustainable route to market for the renewable resource is requiring some creative thinking.

It is therefore no surprise that David Flood, senior vice president of offshore wind at Statkraft, describes the offshore wind sector as "challenging and exciting."

Flood is well versed in the opportunities and challenges of offshore wind as he leads the hydropower giant's return to the offshore wind space after a brief exit in 2017.

Offshore wind is now a core strategic focus for the company, which has set its sights on Northern Europe as the development hot spot of choice.

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Balancing low cost with profitability

Flood explained that Northern Europe boasts excellent offshore conditions and offers a blueprint for sector coupling and overcoming system integration challenges.

However, Flood highlights that with all the development taking place the supply chain could be under significant pressure, reducing the sector's ability to remain competitive.

"The supply chain is being pushed extremely hard in terms of driving down the cost to the level where we're starting to see that it may not be profitable."

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He added that pressure is compounded due to the increased demands in terms of local content, building new factories, and job creation. "We may be asking too much of the supply chain."

"As countries mature, there needs to be a grown-up conversation whether it's all about driving the cost as low as possible or it's about building a sustainable and vibrant industry for the long term."

Route to market

As we deliver huge volumes of offshore wind, said Flood, we reach a challenge of system integration, in other words integrating offshore wind in the lowest cost way. "The offshore wind industry will need to get more creative over time about what its route to market is."

The question is, said Flood, whether it will be purely plugging into the grid and providing green electrons or, for example, taking the hydrogen route.

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Flood believes the next 10 years will be challenging as we ask the supply chain to drive down the cost even more, while also massively ramping up to deliver greater volumes.

However, "once we reach the 2030s and 2040s and the supply chain has matured then we will really have the opportunity to build out large volumes at the scale we need to provide all these green electrons for the production of hydrogen."

And when speaking of offshore wind and the production of green hydrogen and ammonia, Flood referred to this kind of sector coupling as the holy grail.

"If you can couple together different sectors of the energy industry and you can use your very cheap ways of generating green electricity to help you decarbonise... that's when we really start to drive towards net zero."

Flood makes it clear that there are challenges to developing offshore wind, however, it's these challenges and the sheer complexity of these projects that make them so exciting, knowing that by overcoming the technicalities and difficulties, the sector can actually make a difference for society.

Listen to the episode of the Energy Transitions podcast for more details on Statkraft's offshore wind ambitions in Northern Europe: