Globally, over US$800 billion of investment in offshore wind farms is anticipated by 2030 and, for the world to hit net-zero emissions by 2050, the generating capacity from offshore wind must increase by a staggering 1120 GW. In the UK, the govern-ment has set ambitious targets of 50 GW of installed capacity by 2030.
Subsea cables are essential components of infrastructure for both fixed and floating offshore wind farms and this scale of expansion in offshore wind can only be achieved by installing and maintaining thousands of miles of reliable underwater cables.
The performance and reliability of subsea cables are therefore paramount not only to developers and the industry, but to the whole country which will increasingly rely on the power that passes through them.
With an extensive installed base of offshore wind capacity and a strong project pipeline, combined with a stable policy framework, there is a significant opportunity for the UK’s underwater supply chain to lead in subsea power cable systems. Indeed, the subsea cable sector for offshore wind has a potential, estimated value of over £100 billion across manufacture and installation over the next 10 years.
Areas to excel
In 2024, the ‘Offshore Wind Industrial Growth Plan’ identified future electrical systems and cables as two of five areas in which the UK should be excelling, as well as offshore installation, operation, and maintenance. To achieve this, the report highlighted the need to triple manufacturing capacity and double research and development.
These areas were chosen because of the size and growth of the domestic and international markets, existing UK capabilities, an its track record of developing solutions to complex technical challenges. Examples include the UK’s deployment of the world’s largest fixed offshore wind farms, coupled with the expertise honed in the oil and gas industry over the last five decades. However, there are major challenges varying from supply chain constraints to cost escalation and cable reliability.
The problem with cable failure
Global Underwater Hub (GUH), the trade and development body which represents the UK’s £9.2 billion underwater industry, has identified cable performance and reliability as a major issue which needs to be solved, especially as floating offshore wind, which requires even more complex dynamic cables, becomes an increasing percentage of the UK’s overall installed base.
Continuous power supply is crucial, and any cable failures can lead to significant disruption to power availability and energy security. Reliable subsea cable systems ensure that the electricity generated offshore is consistently and continuously delivered to the grid.
Failures in subsea power cables also result in prolonged downtime and high repair costs. The economic viability of offshore wind projects is therefore inextricably linked to the reliability of subsea power cables. However, high failure rates and associated repair costs can deter investment.
Unfortunately, failure of these cables is common – to the point where the cost of insuring them is becoming prohibitive. Insurance claims have increased significantly in recent years, with available data pointing to 80% of failures related to the cable system and repairs ranging from £10 million – £40 million, not to mention the costly downtime of at least 40 – 60 days.
Cable insurance
The challenge of insuring cables was laid bare by insurance experts at a recent GUH event, one expert claimed that 85% of the total value of offshore wind claims relate to subsea cables. Most insurers are losing money underwriting cables with the average settlement claim being £9 million. Another broker warned that the high number of cable claims is affecting capacity and coverage, noting that the cost of repairs typically runs into the millions with warranties rarely covering the high cost of business interruption.
According to one developer, the cost of insuring a 1.2 GW offshore wind farm over its lifetime is in the region of £350 million and insurance brokers estimate that the costs of floating offshore wind will be 30% higher than fixed bottom wind farms. If these critical components become uninsurable, offshore wind projects around the world will be derailed, rendering global 2050 net-zero targets unachievable.
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