Grid parity; connecting the grid
Humans have been harnessing the power of wind for more than 2,000 years. But the use of wind to generate electricity is a more recent phenomenon. And this development is now beginning to bear fruit. Grid parity has now been achieved, which means that the cost price of offshore wind is the same as for energy obtained using fossil fuels. But there is no end in sight to the development of wind energy and other renewable energy sources.
Wind energy: the sustainable choice
People have been using wind power for as long there have been sailboats. For more than 2,000 years, the wind has propelled boats, mills, and machines. But with the advent of electricity, wind energy has been given a new purpose: to generate power directly.
Throughout the 20th century, discussions arose concerning the remaining, or rather the lack of, fossil fuel reserves. People were becoming increasingly aware of the effect that using these energy sources was having on the environment. This led to demand for sustainable and renewable energy sources, and windmills were built on land meet this demand in the long run. Yet, the costs of the technology and materials required meant that the cost price of wind energy was too high to be economically viable in the long term. Wind energy may have been sustainable, but it was relatively expensive.
Offshore wind turbines and grid parity
Since the beginning of the 21st century, more and more wind turbines have been constructed out to sea. The offshore energy market has been turned on its head. Materials and technology presented major cost barriers in this sector too, meaning energy suppliers and governments had to invest substantially in wind energy for a long period.
Wind energy initially cost more than it yielded. But we have now reached a point where the cost price of wind energy is no more than that for energy derived from fossil fuels. That means we have reached what we call grid parity. And the end is not yet in sight.
Sif and offshore wind energy
Since 2000, we have been focusing much of our effort on producing foundations for the offshore industry. Our experience in steel construction has equipped us with extensive knowledge in engineering and production. That is how we have risen to become the leader in the offshore wind market in the monopiles sector. Moreover, we make steel tubulars for all other types of offshore foundations. We have since proven ourselves to be a reliable partner that tackles challenges head on. We do what we say we will do – day in, day out.
We are here to support our customers; cost control remains one of our key focal points. That’s why we continue to invest in production materials and in expanding our production capacities, allowing us to help reduce the costs of energy.
Developments in offshore wind energy
Being as closely involved in offshore energy as we are, we see a number of developments and challenges in the short and medium term which can help wind energy to gain ground over the years to come.
Developments in wind energy
- The proportion of offshore energy in the energy mix is growing.
- More and more offshore wind farms are being built, each one generating more than 1 GW on average.
- The value chain is evolving: turbine manufacturers are becoming project developers by delivering trendsetting offshore wind turbines.
- Larger turbines have helped us to achieve grid parity, but will they continue to grow?
- Floating wind turbines
- Will we also see more floating turbines?
- Growing wind market in Asia and the Americas
Challenges in wind energy
- Connecting wind farms to the electricity grid remains a challenge for the medium term. Will we succeed in creating this connection, so that the growing share of wind energy can be harnessed effectively?
- The grid certainly needs to be re-balanced to incorporate the large percentages of electricity generated from renewable sources.
This is something we see as both a huge development and challenge for wind energy in the short and medium term. An exciting, energetic time now that we have achieved grid parity. And Sif is delighted to be playing a pioneering role in all of it, partly thanks to its work on floating platforms and expansion of the market.
Wind energy in the long term
We have also identified developments and challenges that will influence the energy market in the long term. Will we manage to reduce fossil fuel usage to zero? How will we store energy in the future and how quickly will the electrification process occur? What role will hydrogen play? In a nutshell, it is still early days as far as wind energy is concerned, but at the same time it remains a useful means in the transition to other energy sources. We are busy reflecting on these issues and we are seeking to involve other market players. Together we can go further.