Brezo’s Optimization Approach in the Floating Wind: Cost Efficiency and Risk Management

At Brezo, our goal is clear: help achieve a competitive Levelized Cost of Energy (LCOE) in the Floating Wind. In our LCOE calculation, besides production costs, we include:

• the interest payments, a way of making the execution times and planning present in the LCOE calculation, and
  
• contractors’ markup and contingencies, which in turn include the contractual strategies in the LCOE calculation.
  

So we have been working on optimizing this LCOE, which ultimately shall drive the success of any project. In this framework, the risk profile is also crucial, being a constraint function of the optimization process. For example, while jackets may offer a more favourable risk profile than monopiles, we still see monopiles being widely adopted because their risk profile is "good enough," and they generally provide a better cost solution.
In the case of our technology, CROWN FW®, a way to further optimize this LCOE is by building the floaters in floating docks, which are in essence manufacturing facilities that can be shared between projects and ports. This can help reduce the investment requirements in port infrastructure, allow for a more sustainable industry, improve project economics and foster industry scalability. We consider this could be of special interest to the major players, whose larger portfolio could benefit more naturally from this.

A post last week by Sven Utermöhlen, CEO of RWE Offshore Wind, is in our view linked with the above. We are sure Sven did not have us in mind when writing the post, which targets the entire industry (and perhaps more the bottom-fixed one than the floating one), so the following shows our interpretation of his recommendations to the industry for our particular case. The post outlined three critical actions to overcome the offshore wind industry’s challenges: improving supply chain efficiency, establishing a competitive regulatory framework, and delivering projects at scale. In the end, the post emphasized the need for developers to have “investable business cases with acceptable risk profiles”. Our interpretation of this follows what we mentioned in the first paragraphs: we must compete in price, optimizing it, and ensure the risk profile is good enough.

Furthermore, we find Sven’s suggestion of shifting from single-project optimization to portfolio optimization also worth noting. Optimizing the total LCOE across a portfolio of projects introduces a new level of complexity, especially since joint ventures typically focus on optimizing individual projects. However, there’s potential for larger developers to create win-win scenarios by making strategic decisions that benefit their entire portfolio. At Brezo, we believe mobile floating docks can play a role in helping developers achieve that level of optimization across multiple projects.
In sum, we’re working hard to contribute to a future where Floating Wind is both cost-competitive and sustainable, and we see our innovations as part of the solution to the broader challenges facing the industry today.