Offshore wind is cheap… very cheap
Countries have invested heavily into renewable energy sources to decarbonise their electricity systems. Offshore wind is touted to be one of the key technologies to facilitate the change in energy system with large potentials around the world. It has clear advantages when it comes to energy produced per MW of wind turbines installed. In fact, the IEA called it the “The only variable baseload power generation technology” in its 2019 Offshore Wind Outlook special report to the World energy Outlook. This reduces the challenge to balance the energy system and allows to generate energy from an abundant resource to potentially decarbonise the entire energy economy.
By many, offshore wind was viewed as a costly option, when compared to its onshore wind and solar PV counterparts, which had seen large cost reductions already. Offshore wind was yet to realise its full cost reduction potential, despite a recent downward trend in auctions. This all changed in April 2017 when German wind farms won bids to build and operate without financial support throughout their lifetime. It made us wonder whether this is here to stay, or “Just a flash in the pan?“, coincidentally our first working title for the paper. With every further auction it became apparent that this was not the case and we were indeed observing a trend.
The most recently auctioned offshore wind projects will most likely operate with ‘negative subsidies’ – paying money back to consumers and reducing energy bills as the offshore wind farms start producing power in the mid-2020s. This is the conclusion of our article “Offshore wind competitiveness in mature markets without subsidy” published today in Nature Energy. Soon, offshore wind will be so cheap that it will undercut fossil-fuelled power stations and may become the cheapest form of energy for the UK.
However, this is not an article about our research findings, but the story about the joy (and pain) of research, international collaboration and the people behind the science. This is the story behind the paper.
It all started with the European Energy Markets conference 2018 in Lodz. Conferences are one of the best ways to hear about the latest advances in research and know who is talking about what and which questions are asked is just as interesting as the research itself. I’ve met Iegor and Felix who were asking the tough questions of “Is Offshore Already Competitive? Analyzing German Offshore Wind Auctions” following the spectacularly low auction results in Germany. It was probably the best paper of the conference.
On the same day Germany was about to play in a quadrennial football competition and we all decided to go and watch the game together with cold beer on a summer’s day. It wasn’t looking good for Germany, as they had already lost the previous game. It was pretty much clear after 45 minutes, how the game would end. Plenty of time in the second half, to start engaging in conversations around offshore wind, auctions and the beauty of energy markets with Iegor and Felix. We decided there and then it would be great opportunity to work together. Germany losing a game in a football world championship was a blessing in disguise.
Networking cannot be overrated. Meeting people on a conference and throughout the working life brings together the excellence that is needed for writing a paper. And then it takes people to ask really tough questions to figure out the journey. In the fight against climate change, the use of video-conference tool is certainly useful, but without this conference, the paper would not have been.
Collaboration is key
Initial conversations made it clear that we needed to cover the largest offshore wind markets, which happen to be in Europe. With a little bit of research, we quickly figured out that it is close to impossible to understand, correctly describe and replicate each auction design. There is more to it than the blank results and what seems to be the relevant legislation. To fully understand each country‘s position, we needed to know the history, the over policy paradigms and all those little rules that no talks about outside their respective mother tongue. Initial discussion quickly showed the need to assemble a team to look at the largest offshore wind markets in Europe.
I didn’t take us long to figure out that we needed the experts from each country. This is where the power of networking comes in. Going to conferences over years and working on European projects really has enabled this kind of research. Without to encounters happening by chance we wouldn’t be able to talk about it. Once we had a team assembled, it was a matter of sticking our heads together and making sense of all of that. we had started with a more or less clear idea on what we deemed interesting. It took a while for us to truly understand each other’s country’s perspective in all its details. With this valuable exchange of ideas and facts, we were able to ask the right question.
Having the experts in their field gathered doesn’t mean it is plain sailing. Quite on the contrary, with so many years of experience in offshore wind between us, we realised how different our approach were, right from the technology to the economics of it. What is really enabled us to do is asking the tough questions
One of the many memorable discussions we had early on was on the discrepancy between levelised cost of electricity and the auction results. The economic theory of the cost reduction was not supported by reality. This has not only informed the core of our study, but was so elegantly commented on by a co-author with years of experience in the area: “How did we not see this coming?!”
"It takes two weeks" he said!
Research takes time. A lot of time. The is no such thing as a 'quick research paper'. What started out as a quick idea to describe offshore auction across Europe turned into an elaborate process. Considering it took us two years between the initial ideas over football and beer (very cliché, I know), certainly (some of) the co-authors would have never signed up if they had known what was going to happen.
The luxury of time allowed us to develop a working hypothesis which was then confirmed bit by bit, as new bid results kept rolling in. One cheaper than the previous one. I guess this is the beauty of working on something that is so close to reality. Our curiosity driven approach meant that we were doing science ‘on the fly’, piecing the puzzle together as we kept discovering new facts. It’s a little bit like a stroll in a new city, walking around the streets and slowly forming a picture in your head, but for research.
Science in its finest!
The beauty of collaboration is the exploratory nature of exploring each other's perspective. This creates a room where no stone is left unturned, no questions is considered too trivial and no direction of research considered unnecessary. Each question that has come needed to be answered but, in the process, has thrown up three new ones. At the end of the process we had built a mutual understanding on what the real problems is on how we can address this with our research to cover all countries. This is the strength when entering into an unknown territory with a diverse team and ultimately helps to write a paper that matters and which is likely to be valid outside its geographic study area.
The fact we didn't quite know what we are getting ourselves into and that we were doing research ‘on the fly’ as questions kept popping up (i.e. being asked by very inquisitve co-authors), was the most fun and rewarding experience. This was science in its purest!