Oil companies will not revolutionise the floating wind industry, but they will bring experience, technical know-how and a focus on safety to the floating wind market, industry leaders told Reuters Events’ Offshore & Floating Wind Europe 2021 conference on 14 October 2021
All of the speakers in a panel session entitled ‘Are energy majors set to revolutionise floating wind?’ agreed that oil and energy majors will play an important role in the floating wind market, but they also highlighted important differences between the offshore oil and gas industry, floating and bottom-fixed wind industries.
Havfram chief executive Odd Strømsnes said, “The rules for floating wind aren’t fixed yet, but it will be all about cost. We have a lot of learnings from the oil and gas space. There are a lot of technology skillsets that are very relevant to floating wind.
“We are involved in a number of floating production, storage and offloading projects in oil and gas that give us a lot of technical experience – from seabed intervention to lifting to moorings – but not everything from oil and gas is going to be good for floating wind.
“The offshore oil and gas market has never been good at standardisation,” Mr Strømsnes said. “In floating wind, standardisation will be very important. Unfortunately, the oil and gas industry stopped talking about standardisation several years ago.” The oil and gas industry will need to take a very different approach to floating wind – where large numbers of identical units will be required, rather than one-off, unique projects – he suggested.
“Unlike the oil and gas business, where it’s largely about single projects, in the offshore wind space developers and the supply chain will need to work together to make sure there is a pipeline of work for multiple units,” Havfram’s chief executive said.
Mr Strømsnes said he is also concerned about other aspects of the oil and gas industry’s ‘DNA’ – including cost levels typically associated with exploration and production projects that definitely ought not be imported into the floating wind industry.
BVG Associates founder and managing director Bruce Valpy said the bottom-fixed offshore wind market had benefited from a laser-like focus on cost reduction that has driven the development of the industry and made it more investable.
“In bottom-fixed wind, in some ways, we learned not to standardise too early,” he explained. This has allowed the development of ever larger, more powerful turbines, a process that continues to evolve. But there has also been what he described as “heroic optimisation” – including optimisation of monopile foundations, which make up by far the largest category of foundations used to date.
“Floating wind can build on experience from bottom-fixed offshore wind and from expertise in the oil and gas sector, “ he suggested. “There is a lot of technology that is transferrable from both. This can enable floating wind to move much more quickly than bottom-fixed.” He also noted that the offshore oil and gas industry’s focus on safety and quality would be very valuable to floating wind.
Cerulean Winds co-founder Mark Dixon highlighted the very different operating environments for floating wind and offshore oil and gas and the need for different financing models and significant differences in project execution and delivery.
Shell-Eolfi president Vincent Fromont highlighted the very large number of floating wind concepts in the market, and said Shell remains ‘technology agnostic’ for the time being. This is not because there aren’t already some clear market leaders among the many floating wind concepts that have been developed, or because standardisation won’t occur, but because local content requirements and different supply chains and operating environments in different countries mean a range of concepts will be required.
All of the speakers agreed that whereas bottom-fixed offshore wind had generated a supply chain and execution model based on EPCI contractors and jack-up installation vessels, that will change significantly. Floating wind will see a much higher level of multi-contracting with less need for large vessels. New players will therefore enter the market, they suggested, and new ways will need to be found to handle technical and financial risk among contractors in the supply chain.
“Who owns or allocates risk will change,” Mr Dixon said. “It will be essential for developers to engage with the supply chain earlier and to a greater extent. We need to be smart because this sector is going to evolve very, very quickly.”
“The oil majors won’t revolutionise floating wind,” Mr Strømsnes concluded. “Their focus on safety and quality will be very important, as will some of its technology and expertise,” but he reiterated his concern about oil companies’ ability to control costs.
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