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It was news to strike fear into the hearts of environmental campaigners everywhere: in October, the world’s leading offshore wind company, Ørsted, announced that two ominous-sounding phenomena, dubbed the “blockage effect” and the “wake effect,” were causing its wind turbines to be less efficient than previously thought.
The news “shocked investors,” Britain’s Times newspaper said, reporting that the company’s share price dropped 7.4% following the announcement. “Ørsted cuts jobs after discovering wind is less effective than previously thought,” the London Telegraph splashed breathlessly on Sunday.
The blockage effect, the papers explained, occurs when wind slows down as it approaches wind turbines, while the wake effect is caused by wind turbines impacting the flow of wind to other turbines. These combined effects, the stories implied, have dire implications for the viability of wind as a reliable energy source.
As far as the industry is concerned, however, the news is somewhat less shocking. Blockage and wake effects on wind turbines are well known. One study, published in 2018 by Nature Energy, found the wake effect could impact electricity generation at downwind wind farms by up to 5 percent. The lead author of that study, Julie Lundquist of the Department of Atmospheric and Oceanic Sciences, University of Colorado Boulder, said that while wake effects could have a “significant impact ... they are also predictable and therefore can be managed.”
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Luke Clark, director of strategic communications for industry body RenewableUK, said of the phenomena: “The offshore wind industry has done a huge amount of analysis of blockage and wake effects, and that’s led to developments in the layout of wind farms to minimise these effects and maximise production. Developers understand that load factors vary at different sites and at different times.” Load factor is an expression of the relative efficiency of a turbine’s electricity generation.
But dig a little deeper on such effects, and a very different picture emerges to the one painted by the British papers. Ørsted’s October press release—the one that “shocked investors”—lays out the figures in black and white: owing to blockage and wake effects, “Lifetime load factor of 48-50% for a defined European offshore wind portfolio and construction and development projects is reduced to around 48% due to the adjustment of production forecasts.”
To reiterate, that’s a drop of 48-50% to 48%.
Nevertheless, on Sunday the Telegraph connected this data point to news that Ørsted would be “shifting its focus towards its corporate customers, resulting in the redundancies of around 15 employees in its Danish and German offices, as the wind farm operator mulls further cuts to its U.K. and Sweden offices.”
A spokesperson for Ørsted told Forbes.com: “These are two completely unrelated pieces of news. We had the blockage and wake announcement, and opponents of wind took the release we sent out as proof that offshore wind is not a good idea.”
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In fact, by industry standards, a load factor of 48% is nothing to scoff at: for example, data from 2018 shows that the load factor across the entire U.K. offshore wind fleet came to 40.1%. Further, turbine manufacturers and wind farm developers are constantly refining their designs to mitigate the effects of blockage and wake: in November, energy giant Siemens announced a new technology it calls Wake Adapt, which the company says helps to mitigate the wake effect by actively adapting the rotation of turbines to deflect wake away from other turbines.
As for the job layoffs, Ørsted has said these were a result of a shift in business strategy, as part of its global expansion. Gone are the days when the Danish company was just a regional player in Europe: last year Ørsted set up a trading office in the U.S., and has been making large-scale stateside acquisitions such as its purchase of onshore wind developer Lincoln Clean Energy. In October, Ørsted completed phase 2 of construction on Taiwan’s Formosa 1 wind farm, the company’s first major project in the Asia-Pacific region.
And the share price? Well, Ørsted shares did indeed dip in November to a low of 568 DKK ($84), but by the end of the year had rebounded to an all-time high of 696 DKK ($102). Today, Ørsted shares closed at 645.8 DKK ($96).
