Most notably in Taiwan but also in Japan, China and South Korea, there is a growing appetite for offshore renewables, with lucrative opportunities for owners, operators, shipyards and suppliers to get in on the ground floor and interesting implications for Singapore’s offshore sector
In a panel discussion at the Asian Offshore Support Journal Conference held in Singapore in 2018, PACC Offshore Services Holdings (POSH) marketing manager Kevin Brown and ST Engineering vice president Mike Bell shared their perspectives on the prospects of this growing market and what it could mean for Singapore.
“It’s becoming a general consensus that for Asian offshore wind it’s not a case of ‘will it ever be as big as the European market,’ it’s a case of when it will happen?” said Mr Bell, whose involvement in offshore renewables has been developing, selling and building crew transfer vessels (CTVs) operating in the North Sea.
The opportunity – and the risk – for Asia is how to leverage and learn from experiences of the industry in the North Sea and Europe, the first area where offshore wind really took off, he said, adding “It’s a pretty exciting time for this region.”
Mr Brown observed that while offshore wind is taking off in Asia, it is still very active in Europe, creating competing demand for vessels and potential opportunities for offshore operators in the Asia-Pacific region. He asked “Should we expect the cavalry from the European sector to come rushing over or is there a real opportunity for us to be in at the front and try to support these operators from stage one with a long-term view in mind?”
Well-established in the offshore support sector, POSH formed a joint venture with Taiwanese logistics firm Kerry TJ Logistics in July 2018, called POSH Kerry Renewables, to provide a range of services for offshore windfarm developers, EPCI contractors and wind turbine manufacturers.
The JV brings together POSH’s fleet of vessels and specialised offshore marine expertise with Kerry TJ’s extensive local network and indepth market knowledge as Taiwan’s largest logistics provider.
POSH Kerry will be joined by other strategic partners who are keen to customise solutions for Taiwan’s offshore renewables market. A memorandum of understanding (MOU) has already been signed with Rolls-Royce to explore suitable designs for walk-to-work and service operation vessels specific to offshore wind operations.
The partnership has also gained traction with clients, including a MOU signed with Macquarie Capital and Swancor to jointly explore collaboration opportunities in the Taiwanese offshore wind market; as well as support from Enterprise Singapore, an agency championing enterprise development. The JV will also work with Taiwan-based marine and towage operator Seagreen Enterprise to recruit, train and build up a pipeline of Taiwanese crew.
Mr Brown highlighted several of the challenges operators looking to get involved with Asian wind sector may face. There is a lack of relevant offshore marine knowledge, he noted with Taiwanese companies having so far been heavily reliant on partnering with European operators. This may be an opportunity for experienced offshore operators in the region to get involved. He also noted a lack of clarity on local content requirements, and the timescales involved in these. There are also many stakeholders jockeying to get a piece of the pie from different subsectors with differing scopes and liabilities, with no one-stop solutions providers, unlike in the European market where operators can support many activities ranging from survey to cable-lay, installation and inspection.
An interesting factor is the increased activity in offshore oil and gas, Mr Brown noted. Sophisticated vessels unable to find work performing their intended duties have been moonlighting in walk-to-work operations at a much lower day rate. As activity in their ‘day jobs’ for these vessels pick up, there may be opportunities for other vessels to fill the gap in the offshore renewables market they leave, Mr Brown observed, noting that platform supply vessel (PSV) conversions could be a solution, with opportunities for such vessels to be converted to fulfil accommodation, survey or remotely operated vehicle work.
Concern has been expressed in Taiwan about the lack of a spot market, said Mr Brown. “These large installation vessels come over from Europe, do their job, install and go away – what happens if there’s a breakdown?”
“Some of the field operators are concerned about managing these issues as they can’t just call in a vessel at a day’s notice, while in Europe there’ll be something a day away or a few hours away.”
The panel also discussed design considerations in the offshore renewables sector. While converted PSVs may be suitable for some duties, recent years have seen the rise of sophisticated service operation vessels (SOVs) integrating complex systems and often designed with specific projects and end-user requirements in mind.
Mr Bell said “There’s been talk of converted PSVs operating in renewables but what you’re seeing now is the introduction of very, very custom and specific SOVs that are dynamic positioning-optimised, with huge steps forward in terms of heave-compensating gangways and cranes.”
“These vessels are so bespoke that they really demand long-term contracts or long-term commitments from the end user,” said Mr Brown.
“I don’t think you would go and build one of these on spec,” he said, adding “If you’re going to do that you need to have an eye on having it multirole, where you can hit oil and gas clients and offshore renewables clients.”
Another challenge comes from the speed of technological changes both for the vessels themselves and the installations they service. Mr Bell noted “Vessels built for operations four years ago are no longer large enough to support the largest turbines and the same goes for the technology involved in getting people onto those turbines.”
“It’s now at the stage where whether the length of build of a vessel be 18 months or 24 months, by the time it gets into service technology and expectations have already moved forward.”
Another issue in the southeast Asian context is the risk from typhoons. Mr Bell commented “The purpose of a CTV or an SOV is to put people on turbines, and it is a risky process, there’s a certain amount of danger to it.”
“If you look back over the last three or four years, people have progressively gone for larger vessels to broaden their operational window in terms of wave height.”
“The typhoon [issue] in Taiwan obviously offers just another dimension to consider […] it does create more of an interest around larger SOVs able to stay out for longer periods of time in larger wave heights than a smaller CTV.”
Mr Brown noted that in the Asian context, turbines are being manufactured on a slightly physically larger scale than in Europe, with the transition pieces higher by as much as 5 m. “It’s not necessarily that operating in the sea conditions is going to be any more dramatic than it is in the North Sea on a windy day, but because of the typhoon element everything’s that little bit bigger, which means the vessels have to be bigger to install it.
“And then dealing with the fact that everything’s higher out of the water is another element that just makes life more difficult.”