Charlie Nordstrom presentation to the AWEA WINDPOWER Conference in Baltimore September 2015 outlining the best route to market for floating foundations in offshore wind energy deployments

1. 1/9
Stepping Stone Markets for Floating Foundations
Lessons in technology commercialization
Presentation by Charles Nordstrom, PE
AWEA Offshore WINDPOWER 2015
30 September 2015
Baltimore, MD

2. 2/9
Technology and Commercial Readiness
Relationship between technology development and commercial launch
© BVG Associates 2015
Floating
foundations state
of the art

3. 3/9
Technology and commercial readiness
Demonstration projects are commercial projects
© BVG Associates 2015
CRI 1: Hypothetical commercial proposition: Technically ready;
commercially untested and unproven.
CRI 2: Commercial trial: Small scale, first of a kind project funded
by equity and government project support.
CRI 3: Commercial scale up occurring driven by specific policy and
emerging debt finance.
1 unit @ 7 MW
1 unit @ 2 MW
1 unit @ 2.3 MW

4. 4/9
Product-Market Fit
© BVG Associates 2015
Product featuresThe product comes in several sizes
Is the product solving a burning need, or is it a ‘nice-to-have’?
Minimum viable product
Smallest/cheapest product that delivers evidence
of:
• Technically viability
• Commercially viable
2 to 7 MW single unit demonstrator with a power
purchase agreement
Commercial trial
Pilot projects with multiple units
(e.g., Hywind Scotland, WindFloat Oregon)
Commercial scale-up
10 to 20 units (50 to 100 MW)
Multiple commercial applications
Several projects at hundreds of MW each
Ideal value proposition:
“Floating wind turbines are a critical enabling
technology for generating
affordable, secure, clean, and reliable energy in
regions with deep-water coastlines.”
 Secure
 Clean
? Affordable
? Reliable
• Cost profile is dramatically different across the
product line
• Reliability is proven through incremental track
record

5. 5/9
Product-Market Fit
Cost profile during scale-up
© BVG Associates 2015
$0
$100
$200
$300
$400
$500
$600
Commercial
readiness
index
Turbine
rating
(MW)
Number
of
turbines
Project
rating
(MW)
CAPEX per
MW
Annual
OPEX
per MW
Capacity
factor WACC
LCOE
low
($/MWh)
LCOE
high
($/MWh)
Minimum viable
product
2 to 7 1 2 to 7 $9 million
to $11 million
$250,000 35% 12% $ 423 $ 500
Commercial
trial
5 to 8 5 to 10 25 to 80 $7 million
to $9 million
$175,000 42% 12% $ 269 $ 333
Commercial
scale-up
5 to 8 10 to 20 50 to 160 $5.5 million
to $8 million
$125,000 48% 10% $ 157 $ 215
Multiple
commercial
applications
5 to 8 25 to 50 125 to
400
$3.5 million
to $6 million
$90,000 50% 8% $ 82 $ 127
LCOE [US$/MWh]
Progression through commercial readiness index 

6. 6/9
Product-Market Fit
Electricity market profiles
© BVG Associates 2015
Markets buy large
quantities of
inexpensive power
Markets buy small
quantities of
expensive power
Region
Evidence of support for floating
turbine development 'Hurdle price'
Total installed
generation
France
4 test zones and significant R&D
expenditures
$110/MWh 120,000 MW
Maine (USA)
Offshore test zone and special
offtake subsidy
$80/MWh 3,000 MW
Japan
Test sites and significant R&D
expenditures
$150/MWh 245,000 MW
Scotland
Test site and offtake subsidy $100/MWh 13,000 MW
Region Evidence of support for renewables 'Hurdle price'
Total installed
generation
US Virgin Islands
Goal: 30% renewable by 2030 $375/MWh 216 MW
Antigua and Barbuda
Goal: 15% renewables by 2030 $300/MWh 118 MW
Bahamas
Goal: 30% renewable by 2030 $250/MWh 536 MW
Hawaii
Mandate: 100% renewables by 2045 $300/MWh 3,000 MW

7. 7/9
$0
$100
$200
$300
$400
$500
$600
LCOE range [US$/MWh]
MVP
(<10 MW)
commercial trial
(25 to 80 MW)
commercial
scale-up
(50 to 160 MW)
multiple
commercial
(hundreds of MW
Product-Market Fit
The right product for the right market
© BVG Associates 2015
Total project up-charge in France: $100 million (6 MW)
Total project up-charge in Scotland: $400 million (30 MW)
Total project up-charge in Maine: $890 million (100 MW)
Commercially attractive in a wide range of
electricity markets (200+ MW)
Total project up-charge in US Virgin Islands: $20 million (6 MW)
Total project discount in US Virgin Islands: $160 million (30 MW)
Total project discount in Hawaii: $960 million (100 MW)

8. 8/9
Conclusions
© BVG Associates 2015
For technology developers…
• Embrace the commercial nature of demonstration projects
• Develop a value proposition for each stage of your journey, not just the end game
• “A great technology does not a business make”
For established firms…
• The classic venture capital model does not work for energy hardware
• Your strategic investment is critical
For governments and policy makers…
• Support foreign demonstration projects to gain domestic benefits
For enablers…..
• Take a mission-based approach, rather than a regional approach
Creating the right ecosystem within the offshore wind industry

9. 9/9
Thank you
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