Offshore wind in Portugal: high-level gap analysis and recommendations for first steps

Road to offshore wind development in Portugal

Portugal Identifies Areas for 10 GW of Offshore Wind

Portugal is targeting 10 GW of offshore wind installed capacity by 2030, demonstrating a strong commitment towards this technology as a critical part of its future energy mix. In recent years, Portugal has been an enabler of important technological demonstrations in floating wind; however, the establishment of this target marks a step change in the level of ambition, which will need to be matched with considerable preparation. Here are a few reflections from my Ramboll colleagues Elson M. , Denis Matha , Lorena Tremps and I, as well as with the expert local contribution from my former colleague, and long-time friend, Joao Cruz from Yavin Four Consultants . 

With a long coast and an extensive Exclusive Economic Zone, offshore winds’ contribution could be significant to Portugal’s decarbonisation and economic goals. Developers have been positioning themselves in the Portuguese market and there is great anticipation for the announcement of the development areas, timeline rules, and legal framework for the upcoming auction process. However, care must be exercised, as the wind resource is not as high, sea and ground conditions more challenging, and the market less mature than in other regions where offshore wind has been thriving. The auctions will also mark a shift in Portugal, from small pilot projects straight into commercial-scale windfarms, and that could bring its own challenges too.

Therefore, what happens next is critical to the realisation of Portugal’s offshore wind ambition. In a competitive international market, Portugal needs to attract a host of committed bidders. For that to happen, the authors have noted a couple of aspects which require immediate attention from the governing authorities:

1 – Information

Viana do Castelo, Leixões e Figueira da Foz dão prioridade a eólicas offshore 11 jul, 2023 - 13:15 • Lusa Até setembro, o grupo de trabalho irá aprofundar os modelos de procedimento concorrencial a realizar.

Following the original announcement of the seabed lease areas earlier in 2023, further information about the upcoming offshore wind seabed lease auction has been announced by the Government. However, a full detailed clarification of the auction process, and the legal framework to govern it, are required. Strategic positioning, on the part of developers and/or joint ventures, is rendered impossible without this.

It is not yet clear if the auction will be for a seabed lease only, followed by a separate auction for a CfD-type revenue support mechanism, or if it will be for both, though the latest updates seem to suggest that a two-step approach will be proposed.

 A single auction process could reduce complexity. It would, however, require a greater level of understanding of the development areas being auctioned. For instance, prior to the auction, the planning process for the development areas must be completed. A specific Allocation Plan is required and must be approved by the local authorities to review the current Portuguese Maritime Spatial Planning Situation Plan, approved in 2019. The Allocation Plan is being development and it is expected to be finalised in October 2023. The authorities are also still currently undertaking the required environmental assessment of the plan.

2 – Data

Detailed (yearlong) wind and wave on-site measurements, as well as geotechnical and geophysical surveys and investigations are required to properly understand the wind resource, the metocean and ground conditions at the proposed development areas. The data available for some of these layers is very limited and of low resolution. Data gathering will take a long time and it’s costly. Furthermore, the procurement of these services could be at risk if the supply chain is not readily available (which is likely in the current international market). It is also not clear yet if these activities should be led (and therefore bore) by each of the developers individually, for each of the sites of interest (multiplying efforts and therefore supply chain needs), or if the Portuguese Government - or a representative authority - will concentrate efforts on this, taking a cue from more experienced markets like the Netherlands or the UK.

 To inform their bids, developers require this information to proceed with the design work of their project concept, as well as their financial model. The fewer the data the higher the uncertainty and therefore the risk which, in turn, could impact their willingness to bid and/or the price they bid at – particularly if bidding for remuneration as well.

Environmental surveys and assessments will also be needed. Whilst national guidelines for offshore wind impact assessment studies are still absent, international standards recommend topics such as: biodiversity, underwater noise, landscape, seascape and visual impacts, water quality or underwater archaeological heritage need to be addressed. Some of these assessments must consider aspects such as: seasonality, stakeholder engagement or the establishment of monitoring programs, all of which require a considerable amount of time. Not to mention surveys for unexploded ordinances.

The authors would recommend a centralization of data gathering efforts by a government representative authority, in line with best practice from a number of mature markets. It would speed up the process, guarantee quality in data being considered in bids, and attract more potential bidders by reducing risk and decreasing initial investment costs

There is also limited information regarding grid connection. Preliminary grid connection points have been suggested and subject to consultation earlier this year, nevertheless, further investigation is needed prior to a final decision. Furthermore, it is not clear if the current grid network and upgrade plans consider the new offshore wind target.

In addition to the aspects listed above, the authors note below a few more aspects that require attention from both the developers and the governing/judging body:

1 – Bid submissions

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The Portuguese offshore wind auction needs to enable and attract strong bids from developers. This is a critical component to the successful development of the market. The local framework for offshore wind, the development areas being auctioned, and the availability of information and data will influence this outcome, however, so will the work carried out by developers to mature their project concept.

 Strong bids should be realistic and competitive, and should provide confidence in their feasibility, i.e., be able to secure financial close and be built within a reasonable timeframe. The auction bid evaluation criteria is yet unclear. However, the authors recommend that bid feasibility is included as one of the criteria to be considered.

Whilst developers are unlikely to have a fully matured project concept at the time of bidding, there is a benefit in progressing this work. Reviewing the available site data, performing early-stage technical screenings and local engagement, and building up the basis for the design work are all important steps to assess the technical and commercial aspects, and inform decision-making.

Deliverability will be just as key as cost competitiveness when looking at the bids submitted. Portugal is a new entrant to the offshore wind market and its supply chain and grid infrastructure have not yet dealt with the requirements of offshore wind at this scale. Furthermore, offshore conditions and the proposed development areas in Portugal seem to cater for floating wind, a technology that is still nascent. Any commercial-scale floating wind development undertaken within the timeline of the Portuguese offshore wind target is likely to be a (at least close to) first-of-a-kind project, with all the challenges that such status brings.

2 – Supply chain

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Unless Portugal proves to be a highly competitive manufacturing hub, targeting the European market and beyond, it will have to rely on clear, long-term, commercial-scale internal demand to realize the major investments needed to establish an offshore wind industry in Portugal.

 Such hub is not yet in existence, therefore, for the initial auction round – or rounds – it is likely that the winning bidders will have to look at sourcing major components from other markets to effectively deliver their projects. However, there should be opportunity to involve and further develop the local supply chain with each project delivered. Furthermore, there are good opportunities to grow at local level the O&M supply chain as the windfarms are built and become operational.

3 – Foundation selection

The characteristics of the Portuguese coast and the locations of the areas where offshore wind farms will be developed allow for a wide range of foundation options to be considered. Although there is a perceived better alignment with floating foundation options, the ‘devil is in the detail’ – and caution should be taken before announcing the ‘death’ of bottom-fixed foundations.

 Early feasibility, optioneering and conceptual design studies will need to extend beyond ‘conventional’ practices and consider the wider supply-chain. For example, and in the timescales and overall constraints of the plans announced by the Portuguese government, WTG-size is a ‘moving target’ – thus it is critical that the early development work considers, and even conceptualizes, a wide range of options, that may or not be feasible as each scenario progresses, and that may or not mature into a more detailed design approach.

 Importantly, and in a classical engineering conflict, the design of an offshore WTG foundation can follow one of two approaches: either one considers a WTG with ‘something’ underneath (the ‘top-down’ approach); or one considered a foundation, with ‘something’ on top (the ‘bottom-up’ approach). Given the sizes of the structures, and regardless of the approach, an important if not vital aspect is to ensure, from an early design stage, that either the WTG and/or the foundation do take into account the structural response of the ‘something’ – to avoid the disregard for unwanted coupled effects, which may render the engineering solution unfeasible at a later stage.

 This can be achieved from the onset via an integrated analysis methodology, a ‘must-have’ in floating WTG design. Ignoring the coupled nature of the structural response(s) of the entire system - i.e. WTG, foundation, moorings, etc. – can lead to catastrophic consequences and would violate recommend best practices such as DNV-RP-0286 Coupled analysis of floating wind turbines.

 A challenge at the early, conceptual design phases is therefore to ensure that such recommended practices can be followed, while not ‘overcomplicating’ the design process, leading to unwanted and unwarranted delays. Coupled models are suggested as a solution to face such challenge, following a ‘top-down’ approach. Initial simulations may be framed for a shortlist of critical Design Load Cases (DLCs), in alignment with the project’s design basis and design brief(s). For Portuguese projects, special DLCs – such as those related to transport, installation and maintenance – may have particularly relevance, owing to floater-stability issues in the local environment. The influence(s) of sub-system design in the overall project viability can also be accounted via coupled analysis, noting, for example, design challenges related to the mooring sub-system, noting the wide range of water depths and seabed conditions. Other relevant considerations from an early design stage include the possibility to maximise the use of the local supply chain, e.g. by ensuring that the target foundations have a draft suitable to that available in local ports. The pursuit of modular designs that can be manufactured or assembled locally in the available quayside areas is yet another early-stage design consideration that may prove critical at later stages.

 The early adoption of such practices also carries the potential to collect dividends at later projects stages: in addition to contributing the technical and economic viability of the project, experienced designers can also ensure that all the analysis and documentation is aligned from a classification society perspective, thus extending the technical advice to certification support by default.