The US offshore wind market could need a significant number of service operation vessels (SOVs) in the near-term, the IPF Virtual conference organised by the Business Network for Offshore Wind heard on 25 June 2020
But building SOVs for the US market will not be without its challenges, because they differ from any vessel US yards have built to-date and because US yards work very differently to their counterparts in Europe, where most SOVs have been built.
In an analysis of US offshore wind demand for vessels of all types, Clarksons Platou shipping services divisional director offshore Michael Braid described offshore wind as a ‘vessel intensive’ industry. He told the conference that 6-8 SOVs could be needed in the US market in the near-term and that, worldwide, as many as 50 SOVs could be needed by 2030.
Most SOVs would be built against a long-term charter, Mr Braid told delegates, and most would be newbuilds. To-date, he said, Europe had driven the design and construction of SOVs, but Taiwan and the US are becoming increasingly important markets.
MHI Vestas marine specialist, marine operations and vessel management Graham Tyson told delegates the turbine OEM preferred purpose-built SOVs, and the requirements for them are very much OEM-driven. He said SOVs could account for 50% of operation and maintenance costs for a turbine OEM, so SOVs had to be designed specifically to meet OEM and project needs. He said 10-15-year charters had proved to be a cost-effective way to contract for a vessel.
Mr Tyson said owners, designers and yards would need to collaborate to reduce costs if day rates were to be acceptable to charterers. What he described as ‘meaningful trade-offs’ would need to be identified, and to some extent the offshore wind industry would need to “recalibrate expectations” of SOVs for the US market.
Mr Tyson also identified lead times for the construction of SOVs as a potential challenge. It would be important to align project final investment decisions with lead times for the construction of new vessels. Converted vessels might be needed, but only to fill gaps in capability.
Vard Marine US vice president Darren Truelock told delegates that the OEM and project-specific nature of SOVs meant that, unless a standardised design could be developed and adopted in the US, building SOVs would not be inexpensive.
Unlike the market for vessels that service the offshore oil and gas market, such as platform supply vessels, which used to be ordered in large numbers when that market was booming, SOVs would not all be alike, and cost reductions of the type achieved when building vessels in series would be less likely.
First and foremost, said Mr Truelock, vessels would need to be built in the US to comply with the requirements of the Jones Act, but designs could not simply be imported from Europe without significant changes. European vessels might meet IMO requirements he said, but for the US market they would need to meet the requirements of the Code of Federal Regulations (CFRs), including the Title 46 CFR, the portion of the code that governs a number of vessel types built in the US. They would also probably need to meet the requirements of Subchapter L for offshore vessels.
Mr Truelock said owners should not necessarily expect that yards would rush to offer to build SOVs, not least because naval construction programmes have been boosted in the US, which has reduced yard availability.
At least in the short-term, SOVs would be seen by yards as ‘one-offs,’ not vessels offering the potential for series construction, he said. Owners needed to recognise that yard costs in the US will also be higher than elsewhere and that this would be reflected in day rates. Labour rates are high, and taxes on imported materials fluctuate.
Designs developed for the US market would also need to be ‘Americanised,’ he said. Integration of equipment, systems and outfitting would need to be carefully planned, and US yards, that like to build in a “lean, efficient manner” would need designs adapted to the way they work, with simplified structural design and production.
US yards, he said, usually make use of flanged plating that requires less welding than built sections, and simple curvature would be required wherever possible. The use of lapped brackets would mean fewer parts per tonne of steel. Designers and owners need to be conscious of the need to drive down steel production hours, Mr Truelock said.
Another key difference between SOVs and the kinds of vessels that US yards are used to building – one also highlighted by Mr Tyson – is that SOVs are ‘technician centric’ ships in a way that other offshore vessels and cargo vessels are not, designed and constructed around the needs of their passengers – windfarm technicians – whose safety, efficiency at work and ability to secure sufficient rest to do their jobs, is the vessels’ overriding concern.