Oceantic Network CEO: ‘There comes a time when we have to say enough is enough’
As new offshore wind markets keep emerging and targets in established markets keep increasing, questions on how much capacity can actually be installed, especially until 2030 which is just around the corner, have come to the sector’s foreground. The most vocal on the (un)likeliness of the national and regional targets for 2030 being met – as well as the issues that need resolving in order to, at least, come close to the ambitious goals – is the industry itself.
In this article:
- ‘There comes a time when we have to say enough is enough’ – Wind turbine standardization
- Vessel shortage and lack of specialized vessels remain big issue
- NSEC countries could reach only half of 2030 target due to lack of port capacity
With the mounting pressure of surging project costs caused by the current unfavorable macroeconomic conditions, fears of new projects now having lower or no viability are starting to set in across the industry. And these concern not only developers and operators but the supply chain at large.
The uncertainty in offshore wind that came in the wake of the Russian-Ukrainian war further exacerbated the effects of the uncertainties arising from offshore wind policies and regulations, or lack thereof, in some countries, which the industry was already trying to address through collaborations and dialogues with national and regional governments.
This echoes throughout the offshore wind supply chain where investments need to be made to support the build-out of new and future projects. To make investment decisions and/or secure the necessary funding, same as for the offshore wind farm developers, there need to be sound business cases.
All of the above comes on top – but not completely unrelated to – what the industry has been trying to prepare for (and has been warning about), with some already starting to experience it: supply chain bottlenecks.
‘There comes a time when we have to say enough is enough’ – Wind turbine standardization
To build and operate massive amounts of new offshore wind capacities required to reach the targets, the industry needs many more specialised vessels, far more than are on the market now or will soon enter service. Additionally, as wind turbine components continue to get bigger and offshore wind farms are built farther out at sea, there is the question of whether even the newbuild vessels that are being rolled out now would be able to have a service life long enough before they reach the outer limits of their transport, lifting and installation capabilities.
With far more gigawatts to install in a short time and with many projects entering construction or operation simultaneously, the ports currently serving the industry will need to be able to accommodate this and there will need to be more ports capable of supporting offshore wind build-out in the first place. As wind turbines and vessels get bigger, ports now handling large-scale projects will also require upgrades and expansions to enable the storage and handling of the growing offshore wind components.
While the industry seems to be in consensus on offshore wind targets needing to be optimistic, it is also taking an ever-stronger position that it is crucial to take immediate actions to address these pressing challenges.
According to Liz Burdock, CEO of Oceantic Network (formerly known as The Business Network for Offshore Wind), focusing on what needs to be done to speed up the deployment of offshore wind needs to take precedence over innovation at this point.
“There comes a time when we have to say, quite frankly, ‘enough is enough’ and we have to focus on building what we have so that we can build up the supply chain, so that we can get that expertise and standardization in place to actually, again, deliver the projects. And then after that, reinvest the money into innovating further,” Liz Burdock said last month at the Offshore Energy Exhibition & Conference 2023 (OEEC 2023), where she was one of the speakers at the conference session Renewable Energy: Innovate or Accelerate?.
As for innovation, it is still required to move things forward, but the main areas where innovation can propel the industry at this time are planning and permitting, and the activities related to offshore operations and maintenance, such as deploying autonomous vessels, as well as in manufacturing and lowering emissions in the supply chain, according to Burdock.
On accelerating the deployment and thus making offshore wind energy even more affordable, Oceantic Network’s CEO emphasised that the industry now needed to come to an agreement around wind turbine sizes and take into account the downstream cost of turbines getting bigger.
Calls for standardization in offshore wind turbine sizes have been made repeatedly in different fields within the industry. During last year’s OEEC, Adam Middleton, VP for Western Europe and Managing Director The Netherlands at Siemens Energy, said one of the options was to limit the output to 15 MW so the industry could focus on the industrialization of the product and industrialization of the delivery process.
Vessel shortage and lack of specialized vessels remain big issue
The ship design and shipbuilding industry is also joining the call as it tries to keep up with the growing foundations, towers and blades.
“I also agree with Liz that of course you have to keep innovating, but at a certain point in time you have to say, okay, we are at a technology level and now we have to standardise,” said Wijtze van der Leij, Sales Manager Offshore Wind at Damen Shipyards Group, who was also a speaker at the Renewable Energy: Innovate or Accelerate? session.
[Watch the recording from the conference session 👇.]
Van der Leijn also added that rolling out bigger/newer models of wind turbines was also not the best business model for the OEMs themselves as they might not produce the number of turbines that is enough to profit out of a series because they are rolling out another model, and another model after that, etc.
Still, all speakers agreed innovation is vital for delivering the tools and methodologies needed to do things more efficiently and, in terms of shipbuilding, in delivering specialised and low- or no-emission vessels that need to install and serve the future offshore wind farms.
Thomas Hjort, Director of Innovation and Offshore Wind Development at Vattenfall, said: “Innovation is not only the bigger turbine, it is also, the vessel types that we need to use when we service and install our wind farms. We need to innovate where it makes the biggest difference and we need to innovate respectful of the supply chain that needs to deliver it afterwards.”
“But I’m not going to say that we will not look at the bigger turbine if one is being offered to us. We will look at a new vessel if that is being offered to us. It is all a matter of making sure that it is the best possible compromise of people and resources, and supply chain constraints and so on,” Hjort said.
During the session, Liz Burdock further touched upon the issue of the shortage of specialised offshore wind vessels, especially in the US. As reported on offshoreWIND.biz on 6 November, the US saw Ørsted cancelling two of its offshore wind projects, one of which already entered the construction phase, due to a lack of available specialised vessels, among other things.
“I will say that the vessel issue is a big issue in the United States. So there’s a lot of reasons why, not just the permitting, [things] are happening in the United States the way they are,” Burdock said.
Vessel availability is not an issue contained to the US borders as it also hit Ørsted’s project in Taiwan, which will now be completed early next year, instead of by the end of this month.
Back in 2020, Rystad Energy published an analysis that showed installation vessel demand in 2030 would be four to five times higher than in 2020.
Earlier this year, Clarksons published estimates that suggest that $20 billion of investment is required globally to build 200 new vessels to enable the industry to meet 2030 offshore wind targets.
NSEC countries could reach only half of 2030 target due to lack of port capacity
Over the last couple of years, the industry has also been warning about the impending bottlenecks expected to be created by the lack of port capacity. This, due to high offshore wind targets set for 2030, is currently among the burning issues in Europe, especially the North Sea region.
During a panel session at the Offshore Wind Energy in the Netherlands workshop, organised by the Netherlands Enterprise Agency (RVO) and the Dutch Ministry of Economic Affairs and Climate Policy during OEEC 2023, Erik Bertholet, Business Manager Logistics and Offshore Wind at Groningen Seaports/ Eemshaven, said he sees the North Seas Energy Cooperation (NSEC) member countries reaching less than 60 GW of installed offshore wind capacity by 2030 instead of 120 GW that the member states jointly aim to have.
The existing target(s) are, according to Bertholet, drifting out of reach as ports will become over-capacitated and, with regard to upgrades and expansions, need strong commitments from offshore wind port users (who in turn need certainty themselves).
The average timeline of a project in the installation ports is 18 months so there is a limited number of wind farms the Port of Eemshaven can accommodate. Even with all other ports in the region that can take on such projects, there is limited capacity. There are 17 ports in the NSEC region that are suitable to accommodate offshore wind activities, however, they are not all in the same position, Erik Bertholet said.
Shortly before OEEC 2023, the offshore wind port capacity in the NSEC region was detailed in a report issued by RVO and Royal HaskoningDHV.
The report was published on 20 November following a study which found that 850 hectares are the lower end of what is needed in port capacity. According to the reports, even if all the existing port expansion plans are realised, it would still not be enough to reach even those 850 hectares to install 87 GW and reach 120 GW in seven years.
At RVO’s panel session, Erik Bertholet also noted the competition for space. He said that port owners have requests not only from offshore wind but other industries too, some of which might be more beneficial in terms of a business case, such as putting up electrolysers.
The recently issued NSEC report has, besides identifying drawbacks, listed recommendations and a set of action points that would set the region on the right path towards building its port capacity.
The nine NSEC member states are Belgium, Denmark, France, Germany, Ireland, Luxembourg, the Netherlands, Norway and Sweden, with the UK joining as a non-member. The member states have agreed on joint offshore wind targets of at least 120 GW in 2030 and 300 GW by 2050.
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