‘Catastrophic’ wake losses threaten existence of Orsted Irish Sea wind farms

An assessment commissioned by Denmark's Orsted has found that four planned wind farms in the Irish Sea could result in wake losses and a drop in annual energy production (AEP) of up to 5.34% for its operational assets nearby.

Without adequate mitigation or compensation, Orsted said the new projects “threaten coexistence” with its wind farms.

In a submission filed on Monday, Orsted said that the "scale of impact is such that it could impact in a material way upon the life extension decisions in respect of the existing projects." There is it said a "material risk, given the scale of impact, that extensive years of generation could be lost entirely".

The fourth wind farm in question is the up-to-1.1GW Awel y Mor array, however RWE already secured a development consent order for that project in 2023.

Orsted owns 1.85GW of operational assets in the Irish Sea, including Barrow wind farm (90MW), Burbo Bank (90MW), Burbo Bank Extension (256MW) and West of Duddon Sands (389MW).

It also owns the Walney wind farm, which is broken down into four phases. The first two phases boast 184MW capacity and the second two – collectively known as the Walney Extension – can together produce up to 659MW of power.

Orsted has, as in several other planning applications for projects being developed in UK waters, lodged objections in the proceedings for Morgan, Mona and Morecambe – known as the ‘MoMoMo’ projects – over the impact that wind wakes they will generate could have on its existing assets.

EnBW and BP argue that a study commissioned by The Crown Estate, the seabed landlord for England & Wales, found that at distances much greater than 20km between wind farms, wake losses become “vanishingly small.” As distance increases, they claim negative effects become “negligible.”

The developers argue this in support of their position that they should not have to carry out an assessment of the wake losses their new projects could cause nearby wind farms, as Awel y Mor was ordered to do in a groundbreaking decision in 2023.

In January, Orsted submitted a wake loss assessment it said it was “forced” to commission from consultancy Wood Thilsted concerning the potential impact of the projects on its Irish Sea fleet, given BP and EnBW refused to carry out their own.

That assessment found that the MoMoMo projects and Awel y Mor would cause Orsted's Irish Sea wind farms to collectively suffer wake losses of 3.82%, equivalent to a drop in the AEP of the same figure.

On an asset-by-asset basis, the cumulative impact of the four new wind farms ranges from a 2.16% AEP hit to Orsted’s Burbo Bank wind farm up to 5.34% for its 329MW Walney Extension 4.

Orsted has said it “absolutely” rejects the claim that those wake losses “would not be relevant or would be of minor relevance” to its decision-making on the future of those assets.

Orsted stressed that “a lack of compensation or mitigation of the wake effects could indeed threaten coexistence” between the new projects and its Irish Sea fleet.

A lack of compensation or mitigation could: “(a) shorten the life and result in the loss of the entire output of the generation assets; or (b) stop the generator from pursuing a lifetime extension of the existing generation assets.”

Orsted said in its submission this week that life extension of offshore wind farms is "currently being further examined by the Crown Estate and it is acknowledged as being one of the most sustainable forms of continuing the availability of renewable electrical capacity."

Orsted has railed at the assertion that new projects would have a “small” impact on its assets. It noted that its wake loss assessment found even just one of the four planned projects could have an up to 1.7% hit on AEP for individual Irish Sea assets. Cumulatively it said the MoMoMo assets alone could have an up to a 5.21% impact on AEP in the case of Walney Extension 4.

'Tight financial margins'

“Given these constraints, and the fact that AEP losses directly impact top-line revenue,” he said a loss much above 1% is “painful,” while a 5.2% hit “could be catastrophic for a developer’s business case.”

Urquhart, who spent seven years at Orsted, including as the chief financial officer for its Race Bank offshore wind farm in the UK, said that “even at the lower end of this range, we would expect developers and asset owners to fight hard to protect their asset value.”

Significant uncertainty inevitably remains regarding the wake loss assessment conducted by Wood Thilsted, which was forced to make numerous assumptions in its report – including that the turbine power ratings of the newcomer projects could be up to 22.6MW.

And while the consultancy said it had used an “industry standard” approach to wake loss modelling, EnBW and BP argued that, given the array of modelling methods available, no such standard exists.

The developers argue that current limitations in wake modelling mean an “accurate, robust assessment” of the wake impacts on the Orsted Irish Sea projects "cannot be undertaken."

Orsted would not be the only company to be burned by potential wake losses from the newcomer projects, given that other developers and investors hold stakes in its Irish Sea assets.

The farming down of stakes in offshore wind farms to other investors, as Orsted is known for doing, is another issue that makes it so difficult to assess the "fairness" of projects being impacted by wake losses, said Urquhart. This is because as assets get sold on to new owners they would "typically have a lower return at each step as an asset is de-risked."

Ultimately, it's whoever is “at the end of the line” that can get “hurt most.”

The planned offshore wind farms in the Irish Sea will it said "adversely impact power generation from our existing wind farms in the same basin."

"We are asking the Examining Authority to take these wake effects into account so that developers minimise wake effects on neighbouring wind farms by modifying the design of their wind farms. Alternatively, compensation could also form part of a solution."