Offshore sector three times as innovative as other industries

‘Rain Erosion Tester’ is the name of a device developed by the company R&D. It provides realistic precision simulation of rain erosion to help the wind industry test rotor blade durability in very rainy and windy environments.

The machine is but one of hundreds of examples of innovation and entrepreneurship in the offshore industry. 

As many as 13 per cent of Danish offshore businesses applied for a patent in 2014, compared with only four per cent in other industries. Among the companies working in the wind and oil/gas sectors, the statistic number was an impressive 18 per cent.

In other words, this is an industry where innovation plays a much greater role than other sectors, according to a new report ‘Den danske offshorebranche’  published by the Southern Denmark regional authority.

“It’s an impressive statistic, but I’m not surprised,” says Jan Hylleberg, managing director of the Danish Wind Industry Association.

The offshore industry is not listed in traditional industry statistics like the metal industry or the retail industry, so the report provides a rare opportunity to learn about innovation, development and the number of businesses and employees in the industry.

Generally high capex levels

The numbers do not come as a surprise to Mr Hylleberg because research has always been an essential part of the offshore sector, not least for the wind turbine industry and its generally high capex level.

“Denmark is a hub for global wind technology innovation. Major manufacturers such as Siemens Gamesa Renewable Energy and MHI Vestas Offshore Wind are based here, and they are generally first movers when it comes to installing new types of turbine offshore,” says Mr Hylleberg.

Innovation in the wind industry is mainly based at the big players’ R&D facilities at Aarhus, Vejle and Brande, but also at subcontractors further up the value chain, as shown by the example of the Rain Erosion Tester.

Innovations made span a broad range of fields, including patents for blade innovations in manufacturing methods and design. Patents have also been approved for how to manage the heavy load of a turbine blade, because other industries do not have experience from handling elements of such huge dimensions. When transporting a 79-metre-long turbine blade, you often need to design a solution from scratch, even something as basic as the lorries needed for the task.

The heavy tower components also require special transport solutions. In addition, there are many patents for blade design, shape, structure and attachments. 

And that is just the wind industry.

Innovation is also a major factor in the oil and gas industry. In 2014, ten per cent of the companies working exclusively in oil and gas submitted patent applications, so this industry is generally two and a half times as innovative as other industries.

Wind beating out oil and gas for the first time

Innovation is key for the offshore industry to grow, and there is every indication that it will succeed. According to the International Energy Agency (IEA), the global demand for energy is expected to grow by 30 per cent by 2040. The IEA estimates that sustainable energy will account for sixty per cent of this increase, of which half will derive from solar and wind.

Danish offshore wind surpassed oil and gas in terms of revenue generated for the first time ever in 2015, and the costs of the technology have come down sharply in recent years, so there is a clear trend.

“We’ll definitely be ready to act on growth opportunities. However, in many countries, the politicians still need to decide what their markets should look like on the other side of 2020. Specifically, they will have to determine the scope of and framework for offshore wind power generation in 2020–2030 and where the projects should be sited. The industry relies strongly on the market and the number of projects being known many years into the future, and that is a constant challenge,” says Mr Hylleberg. He notes that the industry’s players issued a joint statement at the world’s largest offshore wind conference held recently in London calling for 60 GW of capacity to be installed in European waters in 2020–2030. Installing capacity of this scale will help drive innovation and investment in new blade types that can help lower costs even further.

The Port of Esbjerg was a signatory to the statement.

“The statement sends a strong signal that the green transition is well underway and that its pace will only accelerate going forward,” says Port of Esbjerg CSO Jesper Bank, who attended the conference.

In the statement, the wind industry and the national governments confirm their commitment to working together to develop offshore wind.

“At Esbjerg, we will do all we can to exchange know-how and experiences with other port authorities so we can all share in the positive developments. I’m absolutely confident that the market for offshore wind will expand considerably over the coming years,” says Mr Bank.

Wind power will grow

Reliance on projects makes production planning difficult for the industry, and, to date, few political decisions have been made that could support longer-term visibility.

Nevertheless, Mr Hyllested is upbeat about the immediate prospects for wind.

“In the context of a Danish and northern European energy structure, wind will play a much greater role than it does today. Wind is the cheapest source of energy there is. That coincides with what will happen over the next ten years: that we will probably be able to deliver large parts of our projects without subsidies, which to a very large extent is due to innovation that has enabled us to successfully lower the cost of power.”

A total of 467 companies in the offshore industry contributed to the report.