OffShore Wind Repair Costs

To reach netzero, IEA projects 7,800 GW of wind by 2050 – a nearly 10x increase over current deployed capacity. But are costs well understood, particularly for less tapped resources such as offshore wind?

Warranties for wind turbines – typically 2-5 year contracts provided at turbine installation to cover repairs – have increased against projections. For the last 5 years Vestas has seen annual provisions for these costs increase per deployed MW. While Siemens Gamesa had been seeing these costs drop over the same period, a FY2023Q1 -€472M impact from a negative trend in failure rates of certain components’ dramatically reverses that trend.

While unexpected inflation and supply chain disruptions may play some part, greater clarity on the specific failures occurring and efforts to reduce costs in future deployments would be welcome – at least to understand the impact these failures may have after warranty periods.

The ambitious growth targets for wind capacity, as projected by the IEA, make it imperative to gain clarity on long-term cost structures, especially as the industry expands into more challenging offshore environments. With warranty provisions on the rise and unexpected component failures impacting financial performance, there’s a clear need for deeper insights into both the nature of these issues and effective cost-mitigation strategies.

Greater transparency around failure trends and supply chain challenges could play a crucial role in stabilizing future costs and ensuring that wind energy remains a viable pillar of the net-zero transition well beyond the warranty period.

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