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ENERGY

CERTIFICATION FOR THE WIND ENERGY OF TOMORROW

SAFER, SMARTER, GREENER


Certification for the wind energy of tomorrow ENERGY 03

FOREWORD

To ensure a rapid and global transition of the energy landscape, the wind energy industry is working hard to drive down costs by adopting new technologies and business models. However, anything “new“ brings potential risks and the question of how to address those adequately becomes important. As certification is one of the key tools in addressing and managing risk, it is evident that certification itself needs to equally evolve to actively support the upcoming growth and innovation of the wind energy industry. To address the question on how certification needs to evolve and to help us to develop, we have carried out a survey of key stakeholders in the industry. There were several instances where specific groups suggested that certification could add more value if it continued to deepen the technical insight into the design phase, lifetime extension or in-service. We believe that the road ahead of us is best explored collaboratively and invite all concerned parties to join us in discussions to shape the certification scope and technical foundation to ensure certification delivers the requested support by the industry. Now and in the future.

Kim MĂ˜rk Executive Vice President for Renewables Certification DNV GL - Energy


04 ENERGY Certification for the wind energy of tomorrow

CONTENTS

1. Introduction | 06 2. Survey key findings | 08 3. Business benefits by quality and safety improvements | 10


Certification for the wind energy of tomorrow ENERGY 05

4. How certification needs to evolve to support the industry 5. Digitalization points to further cost savings 6. Building an even brighter future together // References

| 12 | 14 | 15


06 ENERGY Certification for the wind energy of tomorrow

1. INTRODUCTION Bright future for wind demands extended risk management The wind power industry is all set for a strong future over the coming decades, with a period of sustained and accelerating growth. DNV GL predicts in its 2017 Energy transition Outlook report that installed capacity will reach around 670 GW in 2020, rising to 2000 GW in 2030 and 9000 GW in 2050. This growth will come from established wind power nations as well as efforts in new and emerging markets – with the global wind market already comprising over 90 countries [2]. In the onshore wind sector, China is likely to expand considerably faster than Europe and North America and there will also be substantial growth in the Indian subcontinent and Latin America. For offshore wind, both China and the USA are expected to overtake current global leader Europe

sometime in the 2020s, with the Pacific OECD region expected to be on a par with Europe by the 2030 [1]. Such widespread growth shows that countries are increasingly looking to wind as part of a renewable energy mix that will help them meet national and international emissions goals and growing demand for electricity. Hence wind power must be affordable and costcompetitive with other generation options. This is driving intense efforts across the industry to reduce the levelized cost of energy (LCoE) for wind. These efforts have seen onshore wind become one of the cheapest forms of energy – comparable with solar and having a lower LCoE than most “conventional” generation options [3].

In your job function, do you focus primarily on offshore or onshore wind?

32%

OFFSHORE WIND

33%

ONSHORE WIND

35%

OFFSHORE AND ONSHORE WIND


Certification for the wind energy of tomorrow ENERGY 07

In which markets does your company operate?

NORTH AMERICA

GLOBALLY EUROPE

64%

16%

1%

Reducing costs and entering new markets, which can often entail using sites with suboptimal wind conditions, is being made possible by the introduction of new technologies. Today’s largest wind turbines are typically rated to deliver up to 8 MW, and many manufacturers are discussing plans to produce turbines with twice this capacity within 5 - 10 years. As DNV GL has previously highlighted [4], further development in turbine technology is likely to include: lighter, more flexible blades; new aerodynamic control devices; innovation in transmission systems; new sensors and smart control systems. However, anything “new” – whether it is new turbines and technologies, or new projects in unknown locations based on proven technologies – brings potential risks: will it work, be safe, deliver the power outputs and financial returns predicted? As the scale of wind farms and the fraction of wind energy in the global power mix increase, the question of how to address that risk becomes ever more critical.

The value of certification in delivering cost-competitive wind energy Certification is one of the industry’s key tools in addressing and managing risk. Certification is implicitly required in many countries and most often used to meet national requirements. In essence, certification involves assessing a product or project against an agreed set of criteria codified in an international standard. These criteria are developed by consensus between industry stakeholders drawing on a wide set of international experience. Moreover, they are based on the latest technical developments and learnings at the time the standard is published. To make sense and add value in the quest for lower LCoE the standards on which certification is based need to reflect state-of-the-art technologies and be exposed to frequent updates.

ASIA 16%

LATIN AMERICA 3%

Where should certification go next? Through our own extensive experience of certification for the wind industry, it is becoming clear certification itself needs to evolve from pure compliance to actively support the upcoming growth and innovation. To assess where and what evolution is required, DNV GL carried out a survey of key stakeholders in the industry. The 157 respondents represent all geographic regions and all the stages in the wind energy value chain: from wind turbine and component manufacturers to financiers and insurers. Most of the respondents have technical or managerial responsibilities at companies that trade globally, reflecting the globalized nature of today’s market. These companies were split equally between those specializing in onshore wind, those specializing in offshore wind and those covering both markets.


08 ENERGY Certification for the wind energy of tomorrow

2. SURVEY KEY FINDINGS VALUE OF CERTIFICATION

DEEPEN TECHNICAL INSIGHT 46%

of respondents say lifetime extension certification must evolve to deepen technical insight.

MOST VALUE IN THE DESIGN PHASE

64%

of respondents say certification adds most value to the design phase.

INCREASE IN VALUE BY VERIFYING QUALITY

65%

of respondents say certification adds value by verifying quality.


Certification for the wind energy of tomorrow ENERGY 09

ENSURING QUALITY AND PERFORMANCE OF WIND PRODUCTS 79%

of respondents say demand for ensuring quality and performance of wind products/projects will increase.

SUBSTANTIAL BENEFITS IN DATA ANALYTICS

78%

of respondents believe digital technologies will bring substantial benefits in data analytics.

DIFFICULTIES WITHOUT CERTIFICATION

73%

of manufacturers say uncertified products give more difficulties in new markets and international procurement processes.


10 ENERGY Certification for the wind energy of tomorrow

3. BUSINESS BENEFITS BY QUALITY AND SAFETY IMPROVEMENTS

65% of respondents say certification adds value by verifying quality.

The first stage of the survey focused on the value certification brings today. Looking at the results as a whole, it is evident that the industry sees certification as a valuable tool for technical verification. 65% of respondents said that certification brings value by verifying the quality of wind turbines and projects. The next most popular responses were verifying safety (50%) and verifying performance (48%).* In verifying the quality and safety of a component or project, robust certification actively helps to improve these characteristics among the installed base of wind energy assets by identifying potential issues and allowing them to be addressed before they cause actual problems. The traditional view of certification is that it adds most value in the earlier stages of a product’s or project’s lifecycle. Respondents to our survey agreed. 64% felt certification adds most value in the design phase where it can identify potential issues before prototypes are created, cutting development times and costs. Design basis and testing/measurement were the next most common responses.

Today: In your opinion, to which phases of the turbine /component /project lifecycle does thirdparty certification/verification add the most value?*

1

Design phase (design assessment/evaluation)

64%

2

Testing/Measuring (i.e. prototype testing)

45%

3

Design basis (site/environmental conditions and methodical approaches)

44%

64% of respondents say certification adds most value to the design phase.

Business benefits In your opinion, what is the value of a certificate issued by a third party certification body?*

1

Verification of quality requirements

65%

2

Ensures safety of personnel, equipment, and the environment

50%

3

Verification of performance requirements

48%

Breaking down the responses by their position in the value chain reveals some of the less technical, more business-related advantages of certification within the wind industry. For example, three-quarters of component and turbine manufacturers worry that uncertified products complicate international procurement processes and make it more difficult to enter new markets. This was the largest concern regarding non-certification of products. This resonates well with the fact that in many countries and for many stakeholders certification of wind power assets is mandatory to protect their asset including power systems and energy supplies.

* Respondents were asked to select all areas where they felt certification adds value, hence the percentages do not add up to 100%.


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Meanwhile, further along the value chain, half of the project developers and operators, banks/ investment companies, insurers, public institutions, authorities/ regulators, service providers, and advisors who responded to the survey highlighted the value certification brings in risk mitigation. In fact, risk mitigation ranked second in their concerns over uncertified products and projects.

73% of manufacturers say uncertified products give more difficulties in new markets and international procurement processes.

It is easy to see why. Insurers regularly identify subsea cables as their leading risk factor in offshore wind projects accounting for around three-quarters of the total costs of offshore wind farm losses [5]. This is perhaps surprising as cables are often regarded as a standard, almost commodity product with limited need for certification. In order to address this particular issue the CableRisk joint industry project (JIP) was initiated by DNV GL in 2014. CableRisk concluded that subsea cable issues resulted from sub-standard design, lack of knowledge and skills, poor engineering and project management, and non-existent work standards. These are all areas where robust certification is capable of identifying issues, thereby improving the quality of the installation process and reducing the risk of failures. The CableRisk JIP led to the publication of a DNV GL standard on subsea cables for wind farms [6] and a DNV GL recommended practice on cables in shallow water [7].

What is your biggest concern working with or on products /projects which have not been certified / verified by a third-party certification body?*

1

Quality requirements may not be met

58%

2

Performance requirements may not be met

44%

3

Safety of personnel, equipment and environment is not ensured sufficiently

40%

* Respondents were asked to select all areas where they felt concerns working with non-certified products, hence the percentages do not add up to 100%.


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4. HOW CERTIFICATION NEEDS TO EVOLVE TO SUPPORT THE INDUSTRY

79% of respondents say demand for ensuring quality and performance of wind products/projects will increase.

Looking ahead, there was a clear signal that the relevance of certification will grow over the coming years as the wind power market expands globally. Overall, 79% of respondents stated demand for quality and performance assurance is likely to increase in the future, and this was also the most popular response for each region and role in the value chain individually.

How will demand for the quality and performance ensurance of future wind energy projects /products develop?

79%

Likely to increase

11%

Likely to stay as it is

6%

Likely to decrease

4%

I don’t know

But how will this future certification process develop? Wind turbines and wind farms are extremely complex, and hence there are a vast number of possible characteristics and potentially unknown failure modes that could be checked. Effective, cost-efficient certification relies on identifying which of those are most critical to the performance and integrity of the wind turbine.

Therefore the certification and standard development need to follow closely both how current technologies are progressing and maturing, while new technologies and know-how from other areas finding their way into the renewables industry.

Greater insight in key lifecycle stages DNV GL’s experience in the industry and interaction with stakeholders across the value chain suggests there is a feeling that to help better address risk in wind energy certification needs to take a deeper but more focused approach. To verify this observation and determine how the industry wants certification to evolve participants were asked how they would like certification schemes for each lifecycle stage to develop. The most noticeable result was that there was no lifecycle stage where it was felt that certification was no longer relevant or that the approach needs to be simplified. Indeed, this was the case whether the respondents were sorted by role in the industry or geographical region. There were a number of instances where specific groups suggested that certification in specific lifecycle phases could add more value if it evolved to deepen technical insight. For instance, component and turbine manufacturers felt strongly that such insight could enhance the value of certification in the design phase – already considered the most valuable phase for certification. Such insight could help identify more issues earlier to avoid costly and time-consuming delays later in product development.


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Lifetime extension was the most commonly selected lifecycle phase that would benefit from increased technical insight. With many of the early-generation, wind energy projects soon coming to the end of their projected lifetime, this is clearly a hot topic and area of concern in the industry. Rigorous physical-based inspections as part of the certification at this stage gives much greater understanding of how the turbine is operating, allowing a more accurate estimate of how much beyond its originally planned lifetime it can continue. At the same time, certification costs at this stage need to be minimized so that they can be amortized by the project. This makes proper risk-based approaches essential.

46% of respondents say lifetime extension certification must evolve to deepen technical insight.

Future: In your opinion, how should certification schemes develop in lifecycle phases to bring the biggest value?

0% 10% 20% 30% 40% 50%

Concept phase/ technology qualification Design basis

There was also a strong signal that deeper technical insight may be welcomed in-service. This suggests a growing desire to see certification focus more on performance, alongside its traditional strengths of quality and technical safety. In today’s mature wind energy industry, technical safety becomes a lesser issue in some locations and stakeholders, particularly investors, now increasingly seek reassurances that performance promises are being met and that they will thus see a return on investment.

Design phase (design assessment/ evaluation)

Sharing data to reduce LCoE

In-service (maintenance, periodic inspection, warranty cases etc. )

If deeper technical insight is welcomed for certification in certain lifecycle stages, how is it to be delivered? As the criteria for certification in principle are decided by a consensus of industry players, the industry as whole needs to come together to define what will be critical for wind power assets in the coming years. However, certification can only be truly effective if it carefully and fairly balances the needs of manufacturers, project developers, operators, financiers, and the general public/society. That can only be done if all parties are willing to talk openly and share experience and data. Thorough evaluation and analysis of anonymized field data could help the whole industry improve the mathematical models applied to design phases, for instance to calibrate adequate safety margins, i.e., lower safety factors, and thereby explicitly reduce LCoE. Such an approach is in the early stages of development at individual companies but data sharing across the industry is still very limited.

Testing/measuring (i.e. prototype testing) Manufacturing (evaluation/surveillance) Transport/ installation/ commissioning

Lifetime extension Decommissioning

No longer relevant Simplified approach

Deepen technical insight I don’t know

Stay as it is

However, DNV GL and partners have shown how data sharing can work successfully through numerous joint industry projects (JIPs) such as the formerly mentioned CableRisk JIP. A tradition started over 30 years ago, JIPs bring together world leaders in the energy industry to find smarter and safer ways to power the future, and meet our shared environmental responsibility. The outcome have been many industry standards, guidelines and best practices issued by DNV GL and subsequently finding its way into other industry standards.


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5. DIGITALIZATION POINTS TO FURTHER COST SAVINGS

78% of respondents believe digital technologies will bring substantial benefits in data analytics.

In which processes will digital transformation bring a substantial benefit to the industry?*

Alongside the introduction of new technology, minimizing additional R&D loops and expensive field repairs will be vital in controlling costs. Moreover, all areas of the industry need to become more efficient to reduce LCoE while maintaining profit margins that make wind energy an attractive investment. That includes the assessment and mitigation of risk. Digitalization has a big role to play here. Just as digital technologies are being used to monitor and optimize wind farm outputs in real time, they could also help streamline the process of risk management.

Continued reduction in costs will be key to delivering the growth in wind energy predicted by DNV GL and others. Over the last few years, new technologies have already significantly cut the cost of building onshore and offshore wind farms. In 2016, the average cost of installing offshore turbines in Europe fell by 22% [8]. As a result, in 2017 first project developers won the right to build large wind energy projects with no government subsidies. Analysts predict that this cost reduction will continue, with onshore LCoE falling 47% by 2040 and offshore costs falling 71% in the same period [8]. Savings will be driven by the introduction of cheaper, more efficient turbines and support structures.

Our survey suggests that the wind energy industry would welcome the introduction of greater use of digital technologies in a number of areas. In particular, over 78% of respondents felt data analytics would benefit from digitalization, while 65% thought digital technologies would add value in document management. Other popular areas for digitalization were maintenance (60%), asset operation (50%) and performance management (46%).* This again highlights the changing expectation of certification and risk assessment to look beyond just technical safety and address performance factors that ensure long-term profitability of assets. Further efficiency gains and cost savings could come through increased sharing of data between players in the sector. We believe data sharing via a third party platform, such as the new DNV GL Veracity Platform, could unlock the huge potential to streamline new developments and reduce costs. Within this big data approach, data could be anonymized and analysed to guide the assessment and mitigation of risk within wind energy, for example by identifying the issues that are truly critical to effective certification.

* Respondents were asked to select all areas where they felt digitalisation will bring a substantial benefit, hence the percentages do not add up to 100%.


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6. BUILDING AN EVEN BRIGHTER FUTURE TOGETHER

As stated above, the future for wind energy looks very bright. The responses to our survey clearly indicate that the industry believe certification will be instrumental in bringing that promise to fruition. It is equally apparent that certification needs to continue to develop and evolve with the wind industry to stay relevant. This evolution is best done collaboratively

to ensure the requirements and concerns of all stakeholders are met in an equitable fashion. As a leading body in certification for wind energy, DNV GL invites all concerned parties to join us in discussions to shape certification and ensure it delivers the support individual players and the whole industry need in such a rapidly expanding marketplace.

References [1] DNV GL [2017] “Energy Transition Outlook 2017” [2] Global Wind Energy Council “Global Wind Report - Annual Market Update” [3] Lazard [2016] “Levelized Cost of Energy Analysis 10.0” [4] DNV GL [2016] “Technology Outlook 2025” [5] GCube Underwriting [2016] “Down to the Wire: An Insurance Buyer’s Guide to Subsea Cabling Incidents” [6] DNV GL [2016] “DNVGL-ST-0359: Subsea power cables for wind power plants” [7] DNV GL [2016] “DNVGL-RP-0360: Subsea power cables in shallow water” [8] Bloomberg New Energy Finance [2017] “New Energy Outlook”


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DNV GL – Energy Renewables Certification Brooktorkai 18 20457 Hamburg Germany Tel: +49 40 361490 Email: renewablescertification.energy@dnvgl.com www.dnvgl.com/renewables-certification

About DNV GL DNV GL is a global quality assurance and risk management company. Driven by our purpose of safeguarding life, property and the environment, we enable our customers to advance the safety and sustainability of their business. We provide classification, technical assurance, software and independent expert advisory services to the maritime, oil & gas, power and renewables industries. We also provide certification and supply chain services to customers across a wide range of industries. Operating in more than 100 countries, our experts are dedicated to helping customers make the world safer, smarter and greener.

In the power and renewables industry DNV GL delivers world-renowned testing and advisory services to the energy value chain including renewables and energy management. Our expertise spans across onshore and offshore wind power, solar, conventional generation, transmission and distribution, smart grids, and sustainable energy use, as well as energy markets and regulations. Our experts support customers around the globe in delivering a safe, reliable, efficient, and sustainable energy supply.

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Certification for the wind energy of tomorrow  
Certification for the wind energy of tomorrow  

Bright future for wind demands extended risk management