With a special focus on offshore renewables, experts at Riviera’s OSJ Asia virtual conference surveyed the opportunities and challenges in the OSV market over the coming years
Asia is anticipated to add 235 GW of offshore wind energy by 2040 with China, Taiwan, South Korea, Vietnam and India set to be the leading markets. Growth in the floating wind (though not as predominant as fixed units) will be driven by demand from Japan and South Korea.
Larger turbines will require larger and more capable vessels with an increase in lifting capacity. New opportunities will also arise in the construction of wind turbine installation vessels (WTIVs), service operation vessels (SOVs), crew transfer vessels (CTVs), feeders and cable layers.
ABS’ manager for global offshore renewables, Lars Samuelson said the push for renewable energy will require all sources of renewable energy to be exploited in coming years.
Solar and wind energy “are not competing, they complement each other,” he said.
Fixed offshore wind units are now a mature market and Mr Samuelson projected that the Asia Pacific region will see between 500-600 new units installed every year over the coming decade and that China will be the leader in the offshore wind installations by 2021.
Archer Knight Holdings’ co-founder David Sheret said renewables are becoming a major part of offshore projects with projections showing that offshore wind accounts for a large proportion of projects in Asia over the coming decade. Projections for 2021-2026 also show that capex and devex will far outstrip the need for decommissioning in this period.
Mr Sheret said “The opex market for offshore wind has grown significantly in the European market as installations have become operational” adding that diving will to continue as an integral part of the subsea market. He said diving will be required particularly with the rise of floating wind projects and despite the fact that a number of offshore projects going forward will be diver-less.
More oil and gas companies are looking to branch out into renewables, and owners may seek to leverage existing agreements and have assets that work in any area. Dr Wei Huang, ABS’ director of global offshore said the offshore sector will see opportunities in LNG gas to power and subsea mining with a rise in demand for transportation and electric storage. Dr Huang added that vessel owners will need to look at adopting new technologies to improve operational capability and decarbonisation.
Some vessel owners, such as Subsea7, have strategically built vessels in preparation for new markets. The company’s Seven Vega reel-lay vessel can lay electrically heat-traced flowline systems which will increase the company’s ability to win more capex projects.
“Companies need to be structured to do a spectrum of work. Be it floating, fixed, aquaculture, anything that requires complex engineering in the oceans. Companies that structure this way will be geared correctly and the market will be less cyclical for them going forward,” Dr Huang said.
Singapore-based M3 Marine Group’s CEO Mike Meade said he believes that Taiwan presents opportunities for foreign companies by having fewer barriers to entry than, for example, its larger neighbour China.
Regarding vessel utilisation, Mr Meade noted that the specialised market for diving is a boutique one with only 35 active vessels. Further, he said subcontractors who build large vessels will find it difficult to survive in the market.
“You can’t finance them, banks won’t give you money, you can’t pay leases. So, they are stuck in the shipyard or not working. But as the market tightens up these vessels will begin to come into the market. Given some of the companies are going into liquidation, you’ll see some real bargains there,” he said.
Mr Meade agreed with Mr Samuelson that the opportunities in renewables are not limited to wind pointing to the fact that Singapore has market opportunities for solar power with a floating solar installation currently underway.
Significantly, Mr Meade said he believes that there is willingness to invest in renewables.
“The banks have got blinkers on and will not look at the economics of a project. You just need to say it’s wind or renewable and they’ll come running after you and lend you money,” he said.
Noting that WindFloat Atlantic project which supplies power to Portugal’s electrical grid was bank financed, Mr Samuelson said this was a significant milestone as it showed increased support for new technologies which might have previously been restricted to government largesse.
Riviera’s OSJ Asia virtual conference is the largest forum for shipowners, shipbuilders, charterers and suppliers within the OSV sector in Asia.