EDF Bets on Bigger Turbines to Power Gains at Sea

By Francois de Beaupuy (Bloomberg) —

Electricite de France SA is betting that wind turbines at sea — already the size of skyscrapers — will be about 50% more powerful at the start of the next decade when it completes the country’s largest offshore farm.

The French utility expects even larger machines to contribute to higher output when it builds a facility more than 32 kilometers off the coast of Normandy in 2031. The promise has raised eyebrows at the French energy regulator, which nonetheless awarded the project to EDF and its Canadian partners last month.

The “very intense competitive landscape” is encouraging project developers to make “optimistic” assumptions both in terms of technological evolutions and cost reductions, the Commission de Regulation de l’Energie wrote in its March 9 analysis of the tender result, which was published last week. The EDF-led consortium won against four groups of bidders which included TotalEnergies SE, Engie SA, Iberdrola SA and Vattenfall AB.

Pressure to develop larger turbines is intensifying as countries from the US to China step up their fight against climate change. One of the world’s top producers, Denmark’s Vestas Wind Systems A/S, called in January for a pause in the race for size as the industry racks up losses amid soaring raw material costs and supply-chain disruptions.

While Vestas and other turbines makers with plants in Europe such as Siemens Gamesa Renewable Energy SA and General Electric Co. are currently rolling out wind mills producing as much as 15 megawatts each, the EDF-led team said it may use machines delivering as much as 23.8 megawatts for its planned one-gigawatt farm. France’s energy regulator says that would require wind mills with blades reaching about as high as the Eiffel Tower or New York’s Chrysler Building.

“We’re committing to have a maximum of 47 machines, which corresponds to turbines of more or less 22 megawatts” for that project, Cedric Le Bousse, Director of Renewable Marine Energies France for EDF Renewables, said in an interview last week. “We’re already not too far from this size, when you look at turbines in operations and those in development for the next years.”

The French nuclear giant is currently installing seven and eight-megawatt turbines at its wind projects under construction in French and Scottishwaters, while rivals already use bigger ones for new developments. EDF has said it could use machines producing as much as 16 megawatts for another French project which is due to be commissioned in 2028.     

EDF will pick the turbine provider for 2031 wind farm when the final investment decision is made in about five years, which means that its bet will also be affected by financing conditions in that period.  

The state-controlled utility and its partners won the right to build the facility and to sell power at €44.9 ($48.9) per megawatt-hours for 20 years under a so-called contract for difference, with some inflation protection. 

That’s 6.6% lower than the average of the five bids received for the project, according to the French regulator, which said that all but one bidder bet on a “risky financial structure” for the project worth about €2.2 billion. Their return on investment will be made mostly after 20 years, with no certainty on power prices and turbine performance on such a far-off timeframe, the energy watchdog said. 

“On the renewable market, there’s a tendency to lengthen the lifetime of assets because technologies are becoming more mature,” Le Bousse said. “The longer the life of assets, the later the return” on investment will come. 

© 2023 Bloomberg L.P.

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