Low-emission, dimension requirements pose wind plate supply challenge

Despite the abundance of global plate supply, the specific sourcing requirements of the wind power sector are giving rise to concern over supply chain bottlenecks and shortages, says the Global Wind Energy Council (GWEC).

Steel is about one-quarter of the total materials required per MW for onshore wind, but for offshore wind, steel represents 90% all of the materials consumed per MW.

Much steel in wind goes into monopile foundations; for this purpose, the most common grade used is S355 (European standard; equivalent to A572 in the USA). “This is not quite a basic commercial quality grade but it is not far off it, and most if not all plate mills would be able to make this,” GWEC says in its latest report seen by Kallanish.

Product dimension requirements are more demanding, however, tending towards the thicker end of mill product ranges. In extreme cases, plates of up to 150mm thick may be required. Most plate in general demand is 10-60mm thick.

“Achieving optimal physical properties of plate requires a certain degree of thickness reduction from the slab – ideally at least a three-fold reduction. Therefore, to make a 100mm plate you need to start from at least a 300mm slab. Not many mills can go thicker than this, meaning the pool of suppliers able to meet all of the wind industry’s product needs is small,” the report continues.

The origin of the plate is also under increasing scrutiny following Covid-19 supply chain issues and deteriorating geopolitical conditions. Following the war in Ukraine, Russia, previously a major, low-cost supplier, has been removed from many supply chains, while Ukraine’s export capability has been limited.

“But China is the true elephant in the room in this area. China produces more than 50% of the world’s reversing mill plate and is the world’s biggest exporter. Many of China’s plate mills are relatively modern, capable of producing high-quality, wide and thick products,” the report notes.

The US is leading efforts to diversify or ‘de-risk’ away from China. Several western regions have implemented trade defence measures, including high tariffs on Chinese plate. For its part, China has shown that it is prepared to act to restrict its exports of gallium and germanium, GWEC observes.

“Sourcing decisions made in such an environment are complex. It is possible that what looks like a wide range of potential suppliers is reduced, in practice, to a small number of acceptable origins,” the association says.

Low-emission steelmakers using electricity or green hydrogen are capable of producing plate with a Scope 1 CO2 footprint of below 0.4 tCO2/tonne. But they are limited in number. As the wind energy industry is growing rapidly, it may not be possible for all developers to access low-emission steel for several years to come, the report states.

There has been much coverage recently of wind power project cancellations in the US. “Since Covid-19, inflationary impacts on supply chains, shipping and logistics have pushed up capital costs of wind and other forms of electricity generation. Labour expenses have also increased, while the prices of key commodities like iron and steel remain well above pre-pandemic levels. Developers that secured offtake contracts between two and four years ago are experiencing a dramatic shift in total project costs, undermining future revenue certainty and their ability to reach final investment decisions,” the report concludes.

Adam Smith Poland