A Twenty-fold Increase? 

According to global insights company Wood Mackenzie, the annual build-out of offshore wind farms will increase from around 3 gigawatts (GW) per year during the six years leading up to 2021 to around 24 GW per year in 2029 and 2030. This latter figure is less than 50% of the combined targets articulated by 135 governments worldwide for 2030. While wind farms and the turbines used therein may have seemed like a foolproof investment, the business drifted significantly off course last year.  

The biggest headlines were probably made by the failure of the U.K. government’s autumn offshore wind auction to attract a single bid. The U.K. has the second largest offshore wind capacity after China, mainly because the contracts offered there have been very attractive to developers. “Contracts for Difference” offer a fixed price for electricity produced and a risk/benefit sharing mechanism—which had proved to be attractive to developers—while the U.K. government moved toward its net zero and energy security targets. The country’s government has now acknowledged that it got the pricing wrong in 2023. 

If this error in the West’s largest offshore wind market wasn’t bad enough, the largest wind farm developer outside China, Denmark’s Ørsted, cancelled two U.S. wind farm projects off the coast of New Jersey at a cost of almost US $4 billion in cancellation fees and write-downs. A few days later, the company parted ways with both its CFO and its COO “with immediate effect.”  

Then, in the supply chain, Siemens Energy reported a US $5 billion loss, mainly due to Siemens Gamesa, a former joint venture that is now a wholly-owned subsidiary. Siemens Gamesa’s order book for nacelles (and therefore the gearboxes and bearings inside them) was over US $30 billion in 2021, so a lot of projects, hardware and jobs would be at risk if the company defaulted. This prompted the German government to step in to guarantee US $8 billion of loans in November 2023. GE’s offshore wind business also reported losses around US $1 billion. 

Multiple Causes 

The problems facing the wind power business have a number of causes, said Rob Kerzers in a virtual conference this year organized by the Shell Alumni Network. Kerzers is a non-executive director of the international offshore services company Van Oord, headquartered in Rotterdam, Netherlands. According to him, cost inflation is a significant factor, but so is the cost of finance. Many projects were conceived—and contracts signed—when interest rates were low and project costs were expected to retain a steady decline. Now, many are projected to make lower or no return on the capital invested in the wind farm.  

But there’s also a technical aspect at play, which is relevant to lubricants. The trend is to ever-taller towers with longer blades, as they are more efficient. They are also being placed increasingly far offshore, as many voters in western countries, at least, do not like the visual impact of onshore or near-shore wind farms. In all these situations, the wind turbines require deeper and more robust foundations. Almost every new wind farm requires bespoke equipment or new procedures, so the lower unit costs that result from standardization are not being realized. 

Larger blades on taller towers mean greater loads on the bearings and gears in the nacelle. For existing gearbox types, an ISO 320 wind turbine fluid will perform well in 8.0 megawatt (MW) gearboxes, according to Jim Carey, an independent consultant based in New Jersey with long experience of developing wind turbine fluids.  

“ISO 320 performed the same as in the smaller machines,” he told Lubes’n’Greases. “There are examples of 12.0 MW gearboxes being commissioned.” These consist of 100-meter long blades on a 120-meter tall tower. There is also a 20-MW gearbox in the pipeline (130-meter blades on a 170-meter tower).  

“I don’t think these larger machines would need anything different chemistry-wise. There have been no reports of failures during the testing periods,” Carey added. Although, he did speculate that “an increase of viscosity to ISO 460” could also be required.  

This is “not a big deal,” Carey said. “The caveat here would be the exclusion of metallic additives, which have been found to lead to white etching crack failures.” (For more on how metallic additives can lead to white etch cracking, check out Lubes’n’Greases EMEA Vol 14, Issue 4 from April 2020.) 

“The distance from shore, leading to more remote locations, will drive lubricant drain intervals to longer periods of 7-10 years—perhaps to fill-for-life,” according to Carey. He clarified that “fill-for-life” would likely mean up to 20 years. “There is chemistry available today that could go that direction that could be implemented into any viscosity needed for long-lived lubricants.” 

According to Jack Smodic, strategic account executive for New Jersey-based ExxonMobil Product Solutions Company, “The wind industry is no stranger to lubrication challenges [such as] micropitting [and] white etching cracks.”  

But could rising costs impact lubricant use or even the formulations that are used?  

“The power generation industry as a whole is very performance- and cost-sensitive, and wind is no exception. Any product that goes into a wind turbine needs to provide a return on investment, similar to other power generation methods,” Smodic said. “Extending oil drain interval is an important way for operators to reduce maintenance costs, and ExxonMobil is actively working on technology to accomplish this.” 

But these improvements take time. “The lubricant approval process in wind is very rigorous,” Smodic added. “We work closely with OEMs and other organizations to ensure that our lubricant technology is compatible with today’s turbines as well as upcoming turbine technology that is still being developed.” 

Long-term Growth 

Afton Chemical’s Ee Lin Chew, industrial marketing manager, based in Singapore, pointed out that by some predictions, new offshore wind power installation will have a compound annual growth rate (CAGR) of 8.3%, while that for onshore wind power generation will have a CAGR of 6.1%.  

“Asia Pacific holds almost 60% of total wind turbine installation globally, and 51% of the new installations will come from China,” she told Lubes’n’Greases. This is Afton’s assessment based on data from the Global Wind Energy Council. 

Technology Changes 

Chew also pointed out that wind turbines are trending toward medium-speed hybrid drives, which run at 300-500 revolutions per minute (rpm), rather than the 1500-1800 rpm of geared drives and 10-25 rpm of direct drives. “The market for hybrid drives is growing fast and gaining momentum— from 6.7% growth in 2020 to 9.7% in 2021,” she said. “Hybrid drives are smaller and lighter, more reliable, and more efficient. They are also relatively cheaper compared to direct drive and are mainly being applied in offshore wind turbines.”  

Hybrid drives are less complex than conventional geared drives, using one or two gears, Smodic said. “Hybrid turbines typically do not have a high-speed stage, which simplifies the gearbox. However, the lubrication requirements are similar.”    

Carey added that “hybrid drive systems are benign to lubricants, essentially reducing the total number of rotating elements inside the gearbox of the drive train with a reduction of shaft speeds.  These mechanical changes reduce the impact on lubricant characteristics, essentially not forcing changes on existing wind turbine lubricants.” 

Has the Storm Blown Over? 

The term “energy trilemma” is often used to describe the interdependence of and balance between sustainability, security and affordability of the energy supply. While affordability usually refers to keeping energy prices stable for consumers, finding an equitable sweet spot for suppliers is also essential.  

So were the events of 2023 just a short storm that the industry has overcome? Or will they have lasting effects?  

Chew reminded that the West makes up just 40% of the global wind turbine market. She added that “there is increasing demand for high-quality lubricants to address some of the key challenges faced in today’s wind turbine market.” These challenges include higher loads and stresses due to increases in size and capacity of wind turbines, long service intervals with minimal or no breakdown, and the need to combat water contamination and corrosion, especially for offshore wind turbines. 

The U.K. government increased the rates that it will pay for energy by 66% between the failed auction in September 2023 and the one in March 2024. At the time of writing, it was confident that the next auction round would attract competitive bids. Helene Biström, senior vice president, wind at the Swedish utility Vattenfall, stated at the company’s capital markets day late in 2023 that the U.K. could auction 10 gigawatts of offshore power generation in March. This is almost 70% of the U.K.’s current installed capacity.  

Additionally, the German utility RWE has taken over three fully consented windfarms that Vattenfall had exited, and Ørsted took a final investment decision to proceed with the world’s largest offshore windfarm in British waters in the North Sea within weeks of walking away from Ocean Wind 1 and 2 off New Jersey. 

Several states in the U.S. are considering allowing companies to exit old contracts and re-offer projects at higher prices. While this has elicited many negative comments from those who perceive this as private companies looking for greater public subsidy, elected officials and their civil servants may see these actions as a way of avoiding writing off money already invested by the developers. 

Chew is optimistic on this front. “Renewable energy generation is set to rise to more than 50% of total power demand by 2050,” she said. “Wind power accounts for almost 35% of overall renewable energy supply; this is a high-growth, high-value and concentrated market which is constantly evolving.” 

Carey is also optimistic. “The continued activity in the wind energy sector will be steady and sustained into the medium- and long-term future,” he said. “This technology sector—which has developed mechanical and lubricant technology widely and easily available to anyone, anywhere, with zero input fuel cost—will ensure growth into the future.”  

Trevor Gauntlett has more than 25 years’ experience in blue chip chemicals and oil companies, including 18 years as the technical expert on Shell’s Lubricants Additives procurement team. He can be contacted at trevor@gauntlettconsulting.co.uk