The rapid advance in the size of offshore wind turbines is outpacing the vessel capacity needed to install them, according to a report from the Clean Energy Technology service at IHS Markit
Offshore wind annual gross capacity additions are expected to grow sixfold by 2030 due to dramatic cost reductions, advances in technology, favourable policies and ever-increasing national targets, according to the Offshore Wind Turbine Installation Vessels market report.
However, the industry needs to rapidly develop and invest in new infrastructure to achieve these ambitious plans, the report says. Most critically, the existing installation vessel fleet is unable to install new, larger 15-MW+ turbines that will be hitting the market in the next three years.
IHS Markit clean energy analyst Andrei Utkin said, “Offshore wind turbines are getting larger and larger, reducing costs, improving competitiveness and opening new markets.
“However, that presents a challenge. As new developments are moving further offshore and into deeper waters, logistics, transit and installation become more complex and require larger, more specialised self-propelled jack-up vessels with technical capabilities beyond that of the existing fleet.”
IHS Markit said the geographical distribution of the turbine installation vessel fleet is also potentially problematic. It currently comprises around 50 vessels, with two-thirds located offshore China and most of the rest in northern Europe.
The Chinese fleet does not operate internationally, at least at this point, and much of the remaining global fleet is concentrated around and busy working in the North Sea. Transiting to other markets would be expensive and take time. “Countries outside these regions will therefore face significant roadblocks to expanding offshore wind capacity unless new vessels for other regional markets are rapidly built,” IHS Markit claimed.
The US has targeted a particularly ambitious offshore wind goal of 30 GW by 2030, but the only US-built and flagged turbine installation vessel is not set to enter service until 2023.
IHS Markit projects the industry will need to invest a minimum of US$1.2Bn to US$2Bn to build at least four new vessels to meet global demand from 2026.
Depending on where these vessels are built, the total cost may be significantly higher if local content requirements are taken into consideration, particularly in the emerging offshore wind markets of the US and Asia Pacific.
“Although six new vessels that are under construction are expected to come online by 2023, absent further investment the global fleet would still experience difficulty meeting global demand in 2026-27 and would most certainly fail to do so post-2028. As a result, at least four additional vessels will be needed to cover expected demand to 2030,” Mr Utkin said.
According to IHS Markit, seven companies have announced the intention to build up to 16 new vessels, but these are not yet firm contracts and the investment required has yet to be secured. However, IHS Market said the conditions for investment are improving as turbine sizes stabilise and the technical capabilities for installing them become increasingly standardised.
“One of the reasons for the lack of investment in newbuilds is concern over the longevity of the vessels as turbine technology was developing rapidly,” said Mr Utkin. “Now that turbine sizes have stabilised somewhat, we are finally seeing newbuilds being ordered.
“We expect that with the rise of emerging offshore wind markets and first commercial projects coming online, investors and owners will be increasingly willing to finance and build new vessels.”
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