The International Marine Contractors Association chief executive Allen Leatt has called for an ‘offshore wind competitiveness programme’ that will drive down costs and reallocate risk
Speaking at the 2023 Offshore Wind Journal Conference in London, Mr Leatt, who recently launched IMCA’s updated Renewables Contracting Principles, said the industry needs to collaborate to address supply chain issues.
“IMCA is keen to contribute to this with others,” said Mr Leatt in a hard-hitting presentation, ‘Wind Targets at Risk’, in which he looked at offshore wind capex, the difficult economic situation being faced by OEMs and contractors and the fact that, IMCA claims, increased costs put final investment decisions at risk.
“It is not sustainable, it requires an economic reset and normal returns by reducing costs with collaborative solutions and risk reallocation,” Mr Leatt said. “This is nothing new,” he went on, citing the 1990s, when a similar situation arose with oil and gas development being put at risk due to high costs.
“This led to the creation of the CRINE ‘Cost Reduction in the New Era’ initiative, which saw operators and contractors collaborating to take out unnecessary costs, and reallocation of project risk and reward. This led to the formation of a LOGIC: Leading Oil & Gas Industry Competitiveness programme.
“What we need in the offshore wind industry is a new relationship between stakeholders, government, developers, banks, insurers, OEMs and contractors,” he said.
“We need a LOWIC: Leading Offshore Wind Industry Competitiveness programme. We have taken the lead to start the dialogue and developed a set of 28 Contracting Principles for industry to use.
“Contractors are well used to taking project risks, which have limited upside but cannot have unlimited downside. For this industry to be sustainable it needs to be economically sustainable for all stakeholders.”
IMCA’s At A Glance publication on the Contracting Principles which was distributed to delegates at the event can be found here.
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