Investors and environmentalists were thrown in October 2019 when Orsted, the largest offshore wind farm developer, warned that its wind farms were producing less power than had been expected. The announcement led to a drop of over 7% in the company’s share price, and Orsted’s bleak assessment – describing an “industry-wide” issue rather than a specific miscalculation on Orsted’s part – prompted concerns that wind power may not be the energy transition panacea some had hoped for.
The revision in Orsted’s production estimates was attributed to two scary sounding phenomena: the blockage effect and the wake effect. While the industry has been aware of these effects for some time, Orsted’s announcement revealed that current modelling techniques were not accurately portraying the extent of their impact on wind power generation – an inconvenient and potentially expensive error.
As the UK looks to grow its offshore wind capability over the next decade, how well does the industry understand these phenomena, and might they hinder the UK’s ambitions for 40GW of offshore wind power by 2030?
Blockage and wake effects explained
Blockage and wake describe two related phenomena. Put simply, the blockage effect is the propensity for wind to slow down as it approaches a blockage – in this case, a wind turbine. It means that wind passing through an individual turbine does so at a slower speed, which affects the amount of energy produced by that turbine. There is an individual blockage effect for each individual turbine in a wind farm, and a global effect that is larger than the sum of the individual blockages.
Wake, meanwhile, refers to the wind slowing down after it has passed through a turbine, which has an effect on downwind turbines and can even affect multiple wind farms over longer distances.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
“As the global offshore wind build-out accelerates, the whole industry will see higher wake effects from neighbouring wind farms,” Orsted warned in 2019.
The magnitude of these effects is dependent on a few factors and so a direct impact on existing wind farms is hard to quantify. Wind companies had been overestimating production yields due to underestimating the impact of the blockage and wake effects on their wind farms but turbine characteristics, a wind farm’s layout or location, and site-specific atmospheric conditions can all determine how much of an issue the effects can be.
How do blockage and wake effects affect wind farms?
Norwegian energy advisory and certification body DNV GL published a paper in June 2018 which first brought to light the underestimation of blockage and wake effects and was the instigator for Orsted’s reassessment of its modelling. The paper showed that blockage effects are more pronounced and far-reaching than had been assumed and that contrary to assumptions, front-row turbines are also affected, producing less energy than they would in isolation.
Accounting for the range of factors that can aggravate or mitigate the impact of blockage and wake on production yields, DNV GL warned that these previously unaccounted for effects could represent an overestimation of up to 4% of mean annual energy yield.
“This has an impact for wind farms that are already existing because they’ve used assumptions based on the wake effects and blockage effects to go into the design of these wind farms,” says Aurora Energy Research head of renewables Martin Anderson. “And so by underestimating these effects, there’s a risk that they’re not producing as much power as was expected. And that, therefore, has impacts for how much money they’re going to be making in later years.
“[Wind farms] that have already been operational – they’re not suddenly going to shut down because they’re not making enough wind power.”
DNV GL’s assessment that models used for estimating wind farm energy production likely contain “significant” overestimation bias concluded that better understanding of blockage and wake effects would likely lead to more efficient wind farm designs. Wind-farm-scale blockage in particular had been resistant to observation by existing methods.
Existing projects factor in a degree of uncertainty anyway – the viability of wind power in a given location is based on modelling and estimations, and production yields can fluctuate within a given range.
Orsted said that its historical production numbers had reflected a discrepancy between estimation and reality owing to the blockage and wake effects, but these effects had been captured in more broadly defined deviation analytics. Future projects will benefit from an improved understanding of these phenomena with advances in modelling software allowing for, ultimately, more efficient wind farms.
How will this affect the UK’s new offshore wind target?
In October 2020, Prime Minister Boris Johnson raised an existing target from 30GW to 40GW of offshore wind by 2030. The UK already has 10GW in operation off its coasts, and a further 10GW of capacity has secured government support and will come online inside the next decade.
It’s an ambitious target – projects typically take around five years from the awarding of a Contract for Differences (CfD) to commissioning, meaning the next auction in late 2021 will only begin delivering capacity in 2026. Analysis from Aurora Energy Research suggests a commissioning rate of over 4GW per year will be needed from 2025 onwards in order to hit the target, which is double the maximum that’s previously been achieved.
It’s those CfD awards where the UK might find progress towards its target affected. The CfD scheme is a UK Government mechanism for supporting renewable and low-carbon electricity generation projects. The scheme exists to incentivise investment by protecting developers from volatile wholesale prices. A CfD guarantees a fixed price for the electricity a project generates, calculated as the difference between the strike price and the reference price.
Anderson explains: “The CfD is the subsidised payment that you get in the UK. At the moment, it’s a 15-year contract; essentially, that gives you a fixed price for those 15 years.
“If you’re estimating that you’re going to be producing less, then you’re going to need to make more money for the electricity you do produce. So, when the next auctions come up at the end of this year, it’s potentially a bit of upwards pressure on the strike prices and where these participants are bidding in with their projects.”
Cost reductions protect against blockage and wake
Offshore wind projects are becoming cheaper, however, and this could provide a bulwark against the adverse effects that overestimated production yields might expose a company to. According to Anderson, issues of blockage and wake on production shouldn’t have too significant an impact in terms of hitting the 40GW target.
He says: “Whilst it is a 1%-2% difference in the overall revenue, these projects are still coming in relatively cheaper than they were. We’ve seen in the past few years how the costs of offshore wind have come down dramatically from about £150 per MWh to about £45 per MWh. So they’re already cheap enough, I suppose, that that should mean the government still gets enough money to support these projects.”
Discounting 2020, which obviously had the external factors of a pandemic affecting the industry, low average prices have essentially meant these contracts cost the government very little in terms of subsidies.
Improving modelling and understanding
Since DNV GL’s paper, and Orsted’s subsequent revising down of its estimates, more work has been done to better model and understand these effects and how they have an impact on wind power production.
Luke Clark, director of strategic communications at trade association RenewableUK, says: “The offshore wind industry has done a huge amount of analysis of blockage and wake effects, and that’s led to developments in the layout of wind farms to minimise these effects and maximise production.
“Developers understand that load factors vary at different sites and at different times. As we learn more, we’ll see further innovation and the industry is already using larger, more productive turbines which will drive growth over the next ten years, so that offshore wind will meet more than a third of UK power needs by 2030.”
The industry’s understanding of blockage and wake effects is only going to increase, and Anderson thinks addressing these concerns now is highlighting a growing maturity in the industry: “We’re getting to the point now where costs have come down so much in the past few years, these sorts of calculations are starting to have a bigger impact on the overall business case.
“So really, it comes down to refined calculations and being more accurate in the estimates for how much impact these are going to have so that projects don’t get hit in future years as well. I suppose the risk would be that if you don’t take this into account now it comes back to hitting you in a few years’ time when you actually start trying to get the power from these plants.
“So by doing that, at this stage, it just shows a greater maturity of the industry to be prepared for future years, and to be a long-term industry rather than just trying to get these projects over the line.”