Broker Clarksons Platou Securities has added foundation installation vessels to a list of vessel types it believes will be under-supplied as the offshore wind market goes global
In a recent Renewables Daily Brief, Clarksons Platou Securities analysts Turner Holm and Nikolai Ødegaard argue that, although a niche market, foundation installation vessels are another example of the need for the offshore wind industry to grow and mature its value chain, or face the consequences of potential delays, reduced efficiencies and higher costs.
“For investors, we think growing demand for new and improved vessels offers another potential opportunity to profit from expected growth in offshore wind,” said the broker.
Foundation installation vessels, as the name implies, transport and install foundations for offshore wind turbines. Most of the vessels in this space have come out of the offshore oil and gas market, but the unique challenges of offshore wind are driving demand for a new class of purpose-built vessels.
As they noted, it has not all been smooth sailing in the foundation installation vessel segment recently, with a number of accidents – including the collapse of the crane on DEME’s new vessel Orion and another crane incident on a Chinese vessel – demonstrating the challenges sometimes faced.
“For developers, the greatest challenge will be retaining efficiency and low costs as vessel capacity is stretched,” Clarksons Platou Securities’ analysts argue.
“Foundation fabrication, transportation and installation account for 34% of the total cost of a typical offshore windfarm, according to Subsea 7. Since foundations are the first major component of an offshore windfarm to be installed – with all other construction phases awaiting completion – quality and reliability are essential factors for developers when choosing a supplier.”
From 2024 out to 2030, the broker estimates demand for 13-16 foundation vessels, but counts only 12 vessels in the current fleet, even counting older assets – three vessels are more than 30 years old – and newbuilds under construction.
“In other words, the foundation vessel market looks undersupplied at a time when offshore wind is globalising,” they said, noting that new projects in Asia and the US will take capacity out of Europe.
Another issue facing this segment of the offshore wind supply chain is that transiting to Taiwan from northwest Europe can take three months, reducing available vessel capacity.
“Equinor has recognised these risks and has contracted OHT’s innovative Alfa Lift vessel for two years at Dogger Bank A&B, the first two phases of the world’s largest offshore windfarm,” they concluded. “That is wise, we argue, as others may be offered no quarter in a vicious market.”