Maritime Strategies International (MSI) has added its voice to a growing number of analysts that forecast tightness in the wind turbine installation vessel market in the medium to long term, as the offshore wind industry continues to expand rapidly
MSI, which recently added turbine installation vessels to its portfolio of shipping market forecast models, said its analysis suggests that as offshore wind turbines continue to increase in size, a growing number of vessels in the current fleet will be unable to service larger components.
Like other analysts, MSI expects a very strong shift from small offshore wind turbines to larger units in the coming decade, with turbines expected to reach a capacity of 20 MW or more.
Asset owners and financiers are increasingly interested in understanding the implications of the growth in the size of wind turbines on demand and vessel employment. They are also interested in the potential for investing in new vessels.
Using MSI’s wind turbine installation vessel model, demand for installation of wind turbines and foundations is based on estimates of the time needed to install a turbine or foundation. Earlier studies showed that timescales vary widely, depending on region, supply base and whether feeder vessels are used. The MSI model can be used to test the impact of factors such as these and different operating regimes.
Under its base case scenario, in which all scheduled projects go ahead as planned in the first half of the decade, MSI’s analysis indicates that supply and demand are fairly well matched, due to recent newbuild orders and crane upgrades for existing vessels.
However, MSI said what it describes as ‘friction’ in the balance between supply and demand occurs towards 2030, when demand for high-specification wind turbine installation vessels will outstrip the existing fleet, unless more newbuilds are ordered.
The company also notes that because the market is expanding so rapidly, there is ‘upside uncertainty’ about just how many turbines will actually need to be installed by 2030 and how many wind turbine installation units will therefore be required.
This is because governments around the world are pushing offshore wind targets higher every year, a process that is expected to continue.
Governments worldwide and states in the US in particular, increasingly see offshore wind as a tool to help them meet clean energy targets.
“This is where we see the challenge for the industry,” said MSI associate director Ferenc Pasztor, who is a panellist in the 2021 Offshore Wind Journal conference, which takes place in London on 16 November 2021.
“There is a need to understand how many more vessels might be needed to fulfil demand. Our model addresses this challenge with a dynamic approach to allocating vessels according to turbine size and vessel capability.”
Mr Pasztor and his colleagues said another issue for owners seeking to access the market is the lack of secondhand sales. The last decade has seen no more than a handful of transactions, which means prices are based on modelling the depreciation curve. As activity increases in the sector, more prices will be added to MSI’s model, increasing the accuracy with which it estimates vessel values.
Mr Pasztor said several offshore wind scenarios and vessel operating regimes can be tested in MSI’s model, with the effects cascading through the results, down to the level of vessel utilisation, day rates and prices.
Wind turbine installation vessel market coverage is available to subscribers to MSI’s HORIZON platform which provides access the consultancy’s proprietary macro and shipping market models and asset valuation data.
Riviera Maritime Media’s Offshore Wind Journal Conference will be held in London 16 November. Register your interest and access more information here
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