The latest OWJ webinar discussed answers and solutions to the question why, despite expectations of exponential market growth, vessel owners remain wary of ordering newbuild installation ships
At the webinar, New installation vessels for new markets: lifting higher, larger, heavier turbines, delegates heard that large numbers of installation vessels will be required but a combination of their high price tag and continued growth in the size of offshore wind turbines makes investment decisions difficult.
However, as many as eight newbuild installation vessels could be needed in the mid-to-late 2020s in the US market alone to handle the number of offshore wind turbines due to be installed.
Presenters in the webinar, the third webinar in Riviera’s Offshore Wind Webinar Week, included DNV GL business development manager special ships and offshore Nick Prokopuk; Clarksons head of research Turner Holm; GustoMSC product development manager Andries Hofman; Ulstein Design & Solutions managing director Edwin van Leeuwen; and MHI Vestas Offshore Wind senior marine specialist, marine operations and vessel management Ellen Berchelmann.
Ms Berchelmann said it was clear that installation vessel capacity could become a bottleneck for the industry as it grows and goes global and called for greater dialogue between turbine OEMs and the supply chain “to address growing technical, financial and regulatory complexity.”
Mr Holm said analysis by Clarksons suggests that the number of turbines being installed every year is likely to increase 60% by 2022, with annual installations doubling by 2024, but only a few turbine installation vessels have been ordered. Of those announced in a recent flurry of recent deals, not all are firm contracts, Mr Holm suggested.
“There is a clear case for investment,” he said, but there are few owners able to find the US$250-300M or more needed to build a next-generation vessel. And of those that have the financial resources, some remain concerned about the lifetime of a vessel if turbines keep getting larger and larger.
Mr Prokopuk provided a crumb of comfort for vessel owners when he suggested that turbines may not continue getting larger and larger indefinitely. “Turbine manufacturers are finding ways to get more performance from the same envelope,” he told delegates. That should moderate the need for ever-larger units a little.
“The main challenge is lifting height,” said Mr Hofman, but there are others. Owners increasingly want green vessels for a green industry, so designers have had to propose environmentally friendly power and propulsion solutions such as hydrogen, fuel cells and batteries.
Ulstein Design and Solutions and GustoMSC have both been working on new designs capable of installing larger turbines and of meeting ‘green ship’ requirements, and examples of GustoMSC designs have already been ordered.
Mr van Leeuwen described all of the technology in Ulstein’s new designs as ‘existing technology’ that is at various stages of approval. Mr Hofman said GustoMSC’s approach was one of ‘purposeful innovation’ and suggested that too much new technology could present risks and deter investors.
Mr van Leeuwen neatly summarised the issue for owners considering investing in turbine installation vessels: they need a vessel that is “good now and good 25 years from now” but it is not clear what the market might need in the medium term, let alone the long term. Defining the characteristics of a vessel in such a fast-moving market is a challenge.
Mr Hofman said building them in the US might also be challenging. “The number of yards in the US that can build a jack-up this size is very limited,” he said. “Very few of them have any experience of doing so. If you minimise the risk involved, building in the US is within bounds, but if you add in a lot of new technology, then it becomes more difficult.” He said the size of a vessel that can install new-generation turbines is very challenging wherever they are built.
Asked in a poll if the result of the US election would influence offshore wind plans in the country and demand for installation vessels, most delegates said they did not think it would. Mr Holm suggested that it might not affect the size of the market but it might affect the pace of permitting. As previously highlighted by OWJ, the Bureau of Ocean Energy Management (BOEM) has struggled to keep pace with east coast states’ plans for offshore wind capacity. BOEM needs more resources to manage the permitting workload, industry leaders say, and more lease areas are urgently required.
Asked whether the existing installation vessels will be able to install larger wind turbine generators expected five years from now, 78% of respondents said they would not. Another poll asked delegates how important sustainability and a ‘green footprint’ are when it comes to installation vessel designs: most (43%) said they believe it is quite important, and 40% said it is very important.