The main goal of PowerUp is:
“to develop a strategic framework and industrial demonstrators for volume production and installation of offshore windmills in Mid-Norway”.
The potential for offshore wind power is virtually unlimited in Norwegian waters. The challenge is today’s production costs. According to an estimate of the European Wind Energy Association the market price for offshore wind power must be reduced by 35 % to be competitive. Therefore, significant cost reductions are needed for this power production form to reach the expected extent. At the same time, wind is an attractive market, and the technology development is evolving fast to find new, cost effective solutions.
The project aims to lay the foundation for a strong, national and international leading environment for production and composition of windmills. Through this the project wishes to contribute to establishing competitive businesses who share and develop knowledge, and that exploit the regions already well-established advantage through the maritime industry located there. Such a commitment in Mid-Norway will, from a logistics perspective, involve several fundamental challenges demanding innovative solutions for management and configuration of sourcing, production, composition and installation of windmills.
The value chain for windmills
Value chains for offshore windmills handle products that are large, heavy, labor intensive, and tailor made for each project. Companies in such value chains compete to a large extent on engineering and the production of products with excellent technical properties, but are under a strong pressure to perform production and logistics processes more cost effective than today. At the same time are windmills produced and installed in global value chains that are project based, to a little extent integrated, and with an unpredictable demand situation.
The project execution and logistics of today is based on the industry’s previous experience from offshore installations for oil and gas. The main idea in the project is that companies in Mid-Norway may meet the previously discussed challenges and achieve great competitive advantages in their value chains by transferring and adapting methods and concepts from traditional mass production. Unlike offshore projects in the petroleum industry, that often produce single installations, wind projects will consist of a series of windmills that are virtually equal and this gives a large potential for repetition, standardization, and economies of scale in a portfolio of projects.
Knowledge and technology frontier
The knowledge and technology frontier is divided between project supply chain management, efficient production logistics, and efficient transport and installation.
Project supply chain management is hard to perform efficient because the chains are supply specific and temporary. In practice, learning and reuse across projects in wind projects have been more ad hoc than systematic. Furthermore, it does not seem like well-established principles and models from mass production, such as material requirements planning, just-in-time and lean/agile, are directly applicable in this type of production, partly because of the unpredictability in demand. In order for production and installation of windmills in Mid-Norway to be competitive, temporary technological advantages must be combined with cost efficiency. The transition to volume production of windmills creates the right conditions for achieving this.
Production logistics is developed for mass producing industry, and aims at achieving efficient material and information flow in the factory. The applicability of different planning and management methods depends on demand, product, and production characteristics, and the methods need to be adapted to the current planning environment in a factory. For the production characteristics and the handling requirements of windmills there is a need for developing new methods and tools for planning. This is especially important when balancing assembly lines with parallel work stations, multilevel line balancing, and balancing to handle sequence dependent and stochastic working times.
Assembly, transportation, installation and startup of large windmill parks are repetitive processes with complex logistics. A quick construction of wind parks demands value chains that makes necessary equipment and tools available in an effective manner. Experiences from the oil and gas industry have shown that one may achieve significant cost reductions by increasing the efficiency of offshore activities and by performing as much as possible of the operations on land. New or modified processes for assembly, transportation and installation will be required. At the same time there is a rapid technology improvement in order to develop larger and more cost efficient windmills. The development will require new solutions for cranes, vessels and equipment, and will complicate the logistics further.
Potential project results
In order for the project to reach its main goal, the following intermediate goals are defined:
The project will result in: