Why Do We Need a Pilot?
The Project is an ideal first building block for California offshore wind. It is the only way to provide truly useful data and systematic know-how for offshore wind in this very new environment. This is the necessary step to de-risk the state’s upcoming gigawatt-size projects
Since the first mega-watt scale Floating Offshore Wind turbine – the 2.3MW Hywind Demo – began operation in Norway in 2009, floating offshore wind has been recognised as the next frontier in offshore wind energy, unlocking 80% of the world’s offshore resource in waters deeper than 50 meters. While current global operational floating offshore wind capacity stands at approximately 300MW, the sector is poised for exponential growth, with 10GW forecast for installation by 2030.
Project Scale – Larger projects boost infrastructure efficiency, but require a proven track record to attract investment. Early small-scale floating offshore wind projects showcase supply chain capabilities and unlock private funding.
Cost of Capital – Financing costs are increasing: debt by some 4%, equity by 2–3%. Floating offshore wind faces higher risk premiums as a new technology, but these will fall as successful operational assets build a track record.
Learning Rates – Lessons from small projects cut costs and schedules on larger ones. Gains come from innovation, competition, and economies of scale. Some lessons are global, but many—like workforce and process optimization—require local demonstration.
Cost Reduction Impact – Multiple studies reveal a substantial savings pathway between the pilot and demonstration of small-scale projects and full commercial GW-scale. Cost savings of 40-45% between these two phases demonstrate significant potential to reduce costs for future California ratepayers. A phased approach, allowing for CADEMO, acting as an advanced pilot, can cut costs by up to 15% versus an immediate GW-scale rollout, delivering key benefits:
- Develop and maintain a continuous workforce development and skill retention
- Initiate/advance steady supply chain scale-up with clear investment signals
- Technology and deployment risk reduction through experience and previous validation
- Higher investor confidence through demonstrated execution and validation
- Optimised infrastructure development based on executional and operational learnings