4th Quarter 2017 www.owjonline.com
Journal
CfD AUCTIONS SEE NEW PARADIGM ESTABLISHED IN UK ACQUISITION GIVES EPCI SPECIALIST TURBINE INSTALLATION CAPABILITY PURPOSE-DRIVEN DESIGN CREATES LOGISTICS-LED SOVS
“We anticipate that we can deliver approximately 8,000 GWh of electricity per year, which is approximately 18% of Victoria’s power usage” Andy Evans, managing director, Offshore Energy, see page 40
contents
4th Quarter 2017 volume 6 issue 4
06 08
Regulars 5 COMMENT 39 BEST OF THE WEB
News focus 6 The latest round of auctions for offshore wind in the UK produced startling results 8 GeoSea’s acquisition of A2SEA provides it with turbine installation capability to add to its EPCI expertise
Area reports
22
10 After some false starts, Scotland’s offshore wind industry is developing quickly 12 Together the states of Massachusetts, New York, and Rhode Island could build up to 8 GW of offshore wind capacity and create thousands of jobs by 2030 14 The Chinese offshore wind industry is turning to European and Scandinavian expertise
New markets 16 Offshore wind projects are being proposed in the Baltic, Asia, Caribbean and elsewhere
Turbine technology 18 Evidence suggests that much larger wind turbines could soon be brought to market
31
Finance 20 Finance for floating offshore windfarms is increasingly in focus as demonstration projects take to the water
Service operation vessels 22 Service operation vessels that have entered service recently or are on order highlight the trend towards combining a high level of operability, low operating costs and logistics innovations
Legal matters 26 Richard Booth, a senior associate at HFW, considers what constitutes a defect, a contractor’s liability and the owner’s typical remedies, as well as practical approaches to managing defects
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Offshore Wind Journal | 4th Quarter 2017
contents Project focus 28 The Rampion offshore windfarm – the first on the south coast of the UK – is approaching completion
Manufacturer profile 31 Osbit in the UK specialises in cost-effective offshore access solutions, but also designs bespoke solutions
4th Quarter 2017 volume 6 issue 4 Editor: David Foxwell t: +44 1252 717 898 e: david.foxwell@rivieramm.com
Offshore access/walk-to-work
Commercial Portfolio Manager: Bill Cochrane t: +44 20 8370 1719 e: bill.cochrane@rivieramm.com
33 A new type of highly capable, energy-efficient walk-to-work gangway has entered service in UK waters as an established player unveils new units and manufacturers add lifting capability to offshore access systems
Head of Sales – Asia: Kym Tan t: +65 9456 3165 e: kym.tan@rivieramm.com
Operations & maintenance 36 As Philip Woodcock explains, there is a growing need to reduce O&M costs on offshore windfarms, but a consensus has yet to be reached on how to do so
Profile 40 Andy Evans, managing director at Offshore Energy in Australia, believes the proposed Star of the South offshore wind project is a potential winner in many respects
Next issue • Area reports: Denmark, Japan & France • Operations and maintenance • Foundations • Turbine technology • Turbine components • Cable lay • Role of classification/certification • Offshore wind supply chain • Corrosion control • Testing facilities • Project focus • Turbine maintenance & repair.
Front cover photo: A turbine for the Hywind Scotland floating offshore wind project is installed (photo: Statoil)
Sales, Australasia: Kaara Barbour t: +61 414 436 808 e: kaara.barbour@rivieramm.com Production Manager: Ram Mahbubani t: +44 20 8370 7010 e: ram.mahbubani@rivieramm.com Subscriptions: Sally Church t: +44 20 8370 7018 e: sally.church@rivieramm.com Chairman: John Labdon Managing Director: Steve Labdon Finance Director: Cathy Labdon Operations Director: Graham Harman Head of Content: Edwin Lampert Executive Editor: Paul Gunton Head of Production: Hamish Dickie Business Development Manager: Steve Edwards Published by: Riviera Maritime Media Ltd Mitre House 66 Abbey Road Enfield EN1 2QN UK
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Offshore Wind Journal | 4th Quarter 2017
Disclaimer: Although every effort has been made to ensure that the information in this publication is correct, the Author and Publisher accept no liability to any party for any inaccuracies that may occur. Any third party material included with the publication is supplied in good faith and the Publisher accepts no liability in respect of content. All rights reserved. No part of this publication may be reproduced, reprinted or stored in any electronic medium or transmitted in any form or by any means without prior written permission of the copyright owner.
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Acta Marine expands dedicated Walk-to-Work fleet
• Safe and stepless people and cargo transfer by motion compensated gangway up to Hs 3.0 metres • 3D motion compensated knuckle boom crane for 6 ton cargo handling in sea conditions up to Hs 2.5 metres • Optimized hull form with Ulstein X-BOW and X-STERN to offer unmatched workability in adverse weather conditions Acta Marine’s new built Ulstein SX195 walk to work construction support vessel Acta Auriga will enter service by end Q1 2018. Upon delivery Acta Auriga will join Acta Orion and as such form the second vessel in the Acta fleet dedicated for walk to work, offshore logistics and accommodation services for a variety of clients in the offshore renewable and oil and gas industry.
• State of the art hotel facilities to accommodate up to 120 persons • 1,000 m2 deck space for cargo storage
Acta Auriga will play a crucial role in logistics and support in offshore wind construction projects, offshore maintenance and/ or related markets such as decommissioning and O&G services; the vessel will break new grounds in workability, in-field agility, offshore logistics and comfort on board for 120 persons combined with a low fuel consumption.
www.actamarine.com
info@actamarine.com
+31 (0)88 03 20 900
perle.no photos: uptime.no © 11 | 2017
PROVEN GANGWAYS from 6m to 57m Adjustable PEDESTAL Integrated or Standalone
ELEVATOR TOWER INCREASE UPTIME through
SAFE ACCESS PERSONNEL and CARGO Transfer from vessel warehouse to work
COMMENT | 5
STANDARDISING AND EXTENDING HELP DRIVE FURTHER COST REDUCTION
A David Foxwell, Editor
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stounding is not a word that is often used in the energy industry about contracts, but it is the right word for those handed out for new offshore windfarms in the UK. The low price of the contracts really is astounding, but more astounding still is the effect they will have in the renewable energy industry and energy sector as a whole, in the UK and elsewhere. Apart from making use of larger turbines, standardisation is emerging as a key lever in the process of reducing the levelised cost of energy (LCOE) from offshore wind, as is extending existing assets. Having assimilated the results of the recent auctions for offshore wind energy in the UK, attention in the industry has turned to exactly how those record low bids were achieved. Experts at BVG Associates in the UK have been analysing the auctions and how they think each of the bidders achieved such lowprices. Kate Freeman, an associate at BVG Associates who leads the company’s modelling and analysis, said that, at Hornsea 2, Dong Energy can “go big”. Effectively, they can build a very large extension to Hornsea 1. “Standardisation across the whole area and a designated supply chain producing and servicing the equipment can drive down LCOE,” she explained. “Dong Energy already knows the winds and waters, and it also knows the performance of the turbines. With such a large site, it is easier to hold spares in common and have technicians’ know how utilised to install and operate turbines. Dong Energy has also talked about reducing cost in the transmission link, which, at over 100 km, is important and could have an impact of €1.50– 3.00/MWh (US$1.77–3.54/MWh). “For Moray Firth, we think next-generation, 10 MW+ turbines may well need to be used to get the low LCOE implied by their winning auction bid,” said Ms Freeman. “This will probably require a new marine licensing application to raise the maximum allowable tip height. If EDPR can finance the
“STANDARDISATION ACROSS THE WHOLE AREA AND A DESIGNATED SUPPLY CHAIN PRODUCING AND SERVICING THE EQUIPMENT CAN DRIVE DOWN LCOE”
project without this new technology risk impacting significantly on the weighted average cost of capital, then an LCOE of €62/MWh is achievable.” Triton Knoll probably had a lower bid price than it received at the auction, she believes. “It’s a good site and can reap the rewards of the levelised cost of energy savings that we’ve seen recently in Germany, Denmark and the Netherlands,” she said. “It probably had its bid raised up to this auction price by one or more biomass projects with this price or by the owners of that biomass project thinking that Triton Knoll has this price and bidding accordingly.” Giles Hundleby, a director at the company, notes that, although the UK system looked like it put less competitive pressure on bidders, constrained their technology choices and exposed them to more risk compared to the Danish or Dutch markets, the levers developers found to pull to achieve results at Kriegers Flak and Borssele 3 and 4 “look to have been pulled just as hard in the UK”. Mr Hundleby said that, in particular, the bidders at Hornsea and Moray Firth are likely to have taken the same view as the bidders in the recent Dutch, Danish and German projects did regarding the future availability of larger, more cost-effective turbines. OWJ
Offshore Wind Journal | 4th Quarter 2017
6 | NEWS FOCUS
CFD AUCTIONS SEE NEW PARADIGM ESTABLISHED IN UK ENERGY SECTOR RECENT WEEKS HAVE BEEN PARTICULARLY IMPORTANT ONES FOR THE INDUSTRY IN THE UK, WITH PUBLICATION OF A CLEAN GROWTH STRATEGY, RECORD LOW AUCTION PRICES AND A GOVERNMENT COMMITMENT TO BUILD AT LEAST 10 GW MORE OFFSHORE WIND CAPACITY
The government in the UK has confirmed a commitment to 10 GW of new capacity, possibly more
I
n October 2017, the UK Government published its long-awaited and much anticipated Clean Growth Strategy, which includes a sector deal for offshore wind that could see more than 10 GW of new offshore wind capacity developed. The Clean Growth Strategy aims to improve the route to market for renewable technologies such as offshore wind by committing up to £557M (US$736M) for further ‘Pot 2’ contract for difference (CfD) auctions, with the next one planned for early 2019.
The government confirmed its commitment to work with industry on an “ambitious” sector deal for offshore wind, which could result in 10 GW of new capacity, with the opportunity for additional deployment if this is costeffective, built in the 2020s. The latest auction in the UK saw the cost of new offshore wind fall by 50% compared to the first auction held in 2015 and resulted in over 3 GW of new generation. RenewableUK’s chief executive Hugh McNeal said the announcement “secures
Offshore Wind Journal | 4th Quarter 2017
cheap, home-grown, clean energy for the UK”. He said the government is helping to build a world-leading offshore wind industry that can power a clean industrial revolution, creating new jobs and attracting billions of new investment. “This amazing cost reduction is a reminder of what innovative industry can deliver when backed by competitive auctions,” Mr McNeal said. As Tom Edwards, a senior consultant at Cornwall Insight, succinctly put it “The conclusion from [the new auctions] is
this: the epoch of renewables as the most cost competitive technology has arrived. Even without the added and essential benefit of its zero-carbon footprint, policy makers would – at these prices – be hard pushed not to press ahead with bigger growth in renewables on cost grounds alone, even if there was not a legally binding carbon budget to achieve. There could be no greater accolade than that. A new paradigm has arrived.” “We have got some significantly better results than many of us dared to hope for,” BVG Associates director Giles Hundleby told OWJ. “The low prices have also allowed more capacity to be funded – nearly 3.2 GW – when the best many were expecting was just over 2 GW.” As Mr Hundleby noted, the levelised cost of energy implied by the CfDs demonstrates they are on the same trend with those we have seen over the last year at Borssele 3 and 4 in the Netherlands and Kriegers Flak in Denmark. “Most remarkable is that Moray Firth has been able to be as competitive as Hornsea 2 – presumably both of these are planning to exploit their extra time to use the same future large turbines as have been mooted for Borssele 3 and 4 and Kriegers Flak,” Mr Hundleby said. “Surely with this really excellent result, the UK Government will get solidly behind even more offshore wind capacity.” Mr Edwards agreed that the clear winner of this auction
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NEWS FOCUS | 7
mechanism looks to be the 860 MW Triton Knoll project, which bid into 2021–22 and which – by extrapolating from the auction rules – must, he said, have had its clearing price uplifted by fuelled technologies to a price of £74.75 per megawatt hour (MWh) (US$98.54/MWh). Two other offshore windfarms also cleared, the 1.3 GW Moray East offshore windfarm and the 950 MW Hornsea windfarm, both at £57.5/MWh for 2022–23. “Because of the way these auctions work, this implies that one of these windfarms is highly likely to have bid in even lower than this price and was uplifted,” Mr Edwards said. “The low offshore wind prices should come as no surprise. Offshore wind auctions and tenders on the continent have been clearing lower than estimated levelised costs for some time, with some German auctions clearing close to the expected wholesale power price. There had been speculation that deeper water, construction risks, higher transmission and connection costs and the exchange rate could all have been factors leading to higher prices than in peer European markets. As it happens, it seems we are now reaping the same benefits of acquired learning and greater efficiency in the wider European offshore wind market, which has a mature supply line, larger turbines and plenty of valuable experience at sea.” Moreover, as Mr Edwards also highlighted, the winners are not confined to this auction. The Neart Na Gaoithe project, which won a CfD in the first CfD allocation round, must also be set to benefit. Several years of legal delays due to a dispute with the RSPB has probably deferred their supply chain commitment, and now they could take advantage of clearly reduced turbine costs
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TOP: Keith Patterson: “new prices are almost exactly half those of two years ago” ABOVE: Lord Adonis: “being close to being subsidyfree is in no small part due to consistent policy”
but with the benefit of a CfD priced at £114.39/MWh in 2012 money. “The resonance of these prices should increase the incentives for government to run further CfD auctions. If offshore wind is now lower than the levelised cost of nuclear and other traditional thermal stations, the decarbonisation of our network looks set to accelerate so long as policy allows it to,” Mr Edwards concluded. Reflecting on the role of the UK Government in supporting offshore wind energy, Lord Adonis, chair of the National Infrastructure Commission in the UK, said being “close to being subsidy-free” was a remarkable success, thanks in no small part to consistent policy from successive governments, which has enabled the industry to develop at scale. He noted that using auctions to allocate subsidies has also led to competition between developers and reductions in costs. The successful design and execution of these have been a testament to the skill of officials at the Department for Business, Energy and Industrial Strategy (BEIS), the Electricity Market Reform delivery body and the Low Carbon Contracts company – and all this has led to lower bills. “But politicians must also be given credit for supporting the development of offshore wind over the past decade, even when that meant larger subsidies for the early projects,” he said. “The consensus across successive governments to develop the industry at scale has given windfarm developers the predictability they need to find cheap finance and invest in the supply chain to manufacture, install and maintain the turbines. Peter Ward, a director at Burness Paull, said the recent
contract awards had the potential to create thousands of new jobs and provide power for approximately 3.6 million homes. “Given the results that have been achieved, it is not hard to recall attending an offshore wind conference in Aberdeen only a few years ago and hear (what seemed to be) highly aspirational targets of reducing offshore wind development to less than £100/ MWh by 2020,” Mr Ward said. “It will be interesting to track the opportunities that arise for local communities and the UK supply chain in light of the government’s overall industrial strategy for offshore wind development. It is to be hoped that, given the size and scale of investment required, a joined-up approach from local, Scottish and UK government can fully realise such benefits,” he told OWJ. Keith Patterson, a partner at Brodies LLP, told OWJ that, given that the lowest strike price for offshore wind in the first CfD auction was £114.39 (US$152.12), the new prices represented an almost exactly halving of the price in just two years. “While this price decline looks astonishing, it is only half the story – the decline in subsidy costs is even greater,” he said. “The market price fluctuates currently within a range of about £40–45/MWh. A strike price of £57.50 represents an average subsidy of around £15/MWh, while £114.39 represents a subsidy of around £70–75/MWh. Therefore, while prices have been cut in half, the subsidy cost is less than a quarter of the subsidy cost only two years ago.” Mr Patterson said the policy implications have yet to sink in, and Professor Dieter Helm’s report into the cost of energy – which the BEIS recently published – will make “interesting reading” as a result of the auctions. OWJ
Offshore Wind Journal | 4th Quarter 2017
8 | NEWS FOCUS
Acquisition gives EPCI specialist turbine installation capability In acquiring A2SEA earlier this year, GeoSea, part of Belgium’s DEME Group, has added to and broadened the range of services it provides in the growing offshore wind industry
L
ate August saw GeoSea, part of DEME Group, complete the acquisition of A2SEA from Dong Energy and Siemens International Holding BV after the transaction obtained all necessary regulatory approvals. The acquisition was originally announced on 7 July 2017. Denmark-based A2SEA specialises in installing offshore wind turbines and foundations for turbines. The company has approximately 160 employees and operates the offshore installation vessels Sea Challenger and Sea Installer. A2SEA recently completed installation of the turbines on the Burbo Bank Extension offshore windfarm and has also been working on the Dudgeon and Race Bank offshore windfarms. Upcoming projects include turbine installation on
the Arkona, Hornsea Project One, Horns Rev 3 and East Anglia ONE windfarms. Dong Energy’s executive vice president and chairman of A2SEA Thomas Dalsgaard said he was pleased that the company had found a new owner of A2SEA. He described the company as a pioneer in the industry and one of the leading players in the market for offshore wind turbine installation. “However, owning an offshore wind turbine installation company isn’t within the scope of our core business, and we’ve therefore been looking for a new owner,” he said. “With the new owner, I feel confident that A2SEA will be in very good hands. GeoSea is in a position to contribute to A2SEA’s continued stable operating results and ensure the continued positive development of the offshore wind installation
company. Based on A2SEA’s expertise and track record for installation, we expect A2SEA will still be a key supplier to Dong Energy’s future projects. This transaction won’t change that fact.” GeoSea’s managing director, Luc Vandenbulcke, said A2SEA “represents a strong and complementary fit with GeoSea’s operations”. With the acquisition of A2SEA, the company will also gain a group of highly skilled and specialised employees. Mr Vandenbulcke noted that, whilst GeoSea mainly specialises in foundation works and in the engineering, procurement, construction and installation of the balance of plant for offshore windfarms, A2SEA specialises in transporting and installing turbines. “Many times GeoSea has worked on projects where A2SEA later on installed turbines. Our
combined organisation will be well positioned to provide a broader range of integrated services and solutions to renewable energy customers,” he said. Michael Glavind, CEO at A2SEA, said the company was very pleased to become part of GeoSea, which he described as a highly respected contractor in offshore wind. “To both companies, safety is of paramount importance, and we take pride in delivering projects to the full satisfaction of our customers.” Since its formation in 2000, A2SEA has installed more than 1,500 turbines and 400 foundations. Shortly after the deal was announced A2SEA confirmed that it would be installing the transition pieces on the Merkur offshore windfarm in Germany and that it was taking on the project for its new parent company. It will use Sea Challenger to transport and aid in installation of the transition pieces. In 2016, A2SEA said it planned to focus on its core business in future and sell its cable installation and crew transfer vessel businesses. This development saw the company’s cable installation business CT Offshore and its vessels and equipment sold. A2SEA also decided at the time that crew transfer vessels would no longer be part of its product portfolio. OWJ
Acquiring A2SEA has given GeoSea turbine installation capability to add to its EPCI and foundations expertise
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10 | AREA REPORT Scotland
SCOTS SEE PROMISING FUTURE FOR OFFSHORE WIND INDUSTRY AFTER EARLIER DISAPPOINTMENTS WHEN OFFSHORE WINDFARMS IN THE COUNTRY FAILED TO SECURE CONTRACTS FROM GOVERNMENT AUCTIONS, SCOTLAND’S OFFSHORE WIND ENERGY INDUSTRY HAS THE WIND IN ITS SAILS
Projects such as Hywind (shown here), Beatrice, Aberdeen Bay, Kincardine and Moray East are part of a new chapter for Scotland’s renewable energy industry
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ecent months have been good ones for Scotland’s burgeoning offshore wind industry, with Hywind Scotland, the world’s first floating offshore windfarm, starting to deliver electricity to the Scottish grid, having been formally opened by the First Minister of Scotland, Nicola Sturgeon, and EDPR’s Moray offshore windfarm off the northeast coast of Scotland. After a further challenge to the project by RSPB Scotland, the fate of another project, Neart na Gaoithe, hangs in the balance, despite potential economic impacts associated with building it that are said to amount to £827M (US$1.1Bn) to the Scottish economy, but the industry is in an optimistic frame of mind, as Scottish Renewables’ head of policy Michael Rieley told OWJ.
Offshore Wind Journal | 4th Quarter 2017
“Offshore wind “holds huge promise for Scotland” he told OWJ, noting that the country is quickly emerging as an international centre of offshore wind innovation. “Scotland is home to approximately 25% of Europe’s offshore wind resource, and we are now starting to build out projects that will harness this potential,” said Mr Rieley. “Projects like Beatrice, Hywind, Aberdeen Bay, Kincardine and Moray East are part of a new chapter for our renewable energy industry. They will enable our offshore wind supply chain to start to capitalise on the experience it has gained working on projects in the rest of the UK and further afield and begin to deliver increased benefits in Scotland. In addition, the Scottish Government
has shown its ambition to generate the equivalent of half of all energy consumed from renewable sources by 2030, and offshore wind can play a key role in meeting that goal.” Asked about his reaction to the UK Government’s Clean Growth Strategy and the funding allocation for 2019, Mr Rieley said Scottish Renewables believed that the strategy provides some important commitments that will further the transition to a low-carbon economy and, potentially, benefit industry in Scotland. “The renewed support for offshore wind deployment and innovation and the commitment to work with the industry on a sector deal is to be welcomed and will help move the UK towards its goal of reducing carbon emissions while delivering affordable energy and clean growth,” Mr Rieley said, “although it is disappointing that no commitment has yet been made to allow onshore wind and solar PV – the cheapest forms of new power generation – to compete for contracts to sell the clean power they produce. “The strategy includes a number of positive steps,” he told OWJ, “but the government still expects to miss the fifth carbon budget unless it purchases international carbon credits, and although the announcements made in the strategy on cutting carbon in the heat and transport sectors in particular are welcome, the government will need to go further still if it is to meet its legal requirements on climate change and its global commitments under the Paris Agreement.” Overall, said Mr Rieley, the Clean Growth Strategy includes a number of measures with potentially positive effects for renewables and Scottish renewable projects. These include the fact that the government remains committed to carbon
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Scotland AREA REPORT | 11
pricing to help reduce emissions in the power sector, with further details on carbon prices for the 2020s to be set out in the autumn 2017 budget. The Levy Control Framework will be also replaced by a new set of controls beyond 2020/21. These will be set out later this year. On renewable technology and projects, the strategy stated that the Department for Business, Energy and Industrial Strategy will “improve the route to market for renewable technologies such as offshore wind.” On offshore wind specifically, Mr Rieley noted that the government said it will work with industry as it develops an “ambitious sector deal for offshore wind” and that, provided costs continue to fall, this could result in 10 GW of new capacity built in the 2020s with opportunities for additional offshore wind deployment in the 2020s, if this is cost-effective and deliverable. The government also said it will work with The Crown Estate and Crown Estate Scotland to understand the potential for deployment of offshore wind in the late 2020s and beyond. Asked how important Crown Estate Scotland’s role might be in this process, Mr Rieley said that, since its establishment in April 2017, Crown Estate Scotland has said it is committed to continuing to support industry and help Scotland meets its ambitious renewable energy consumption targets. “The Crown Estate has worked with developers and licensing bodies for many years to plot the potential energy resource under, on and above our seas and to help deliver the technologies that are now enabling us to capture that resource,” he explained. “We fully expect that Crown Estate Scotland’s role in future will remain just as vital to the development of a sustainable offshore renewable energy sector. “In particular, Crown Estate Scotland has said it will work with offshore renewable energy developers to identify new development rights and additional targeted capacity for new projects, as well as creating policy for extensions to existing commercial and test sites. That is work that will allow the continued development of offshore renewables in Scotland, bringing down costs and helping tackle climate change by reducing the carbon emissions from our energy sector.” The government, in partnership with the Research Councils and Innovate UK, is also expected to invest around £177M (US$233M) to further reduce the cost of renewables, including innovation in offshore wind turbine blade technology
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Michael Rieley: “Clean Growth Strategy includes a number of measures affecting Scottish renewable projects”
and foundations. Asked what role Scotland might play in this, Mr Rieley told OWJ that cost reductions displayed by many renewable energy technologies – and particularly offshore wind – to date have been “astounding” and highlighted the fact that further innovation could be made possible by the funding in turbine blade technology and foundations, and new innovation opportunities are likely to arise in a number of areas, including floating offshore wind. “In September 2017, a Scottish windfarm – the Moray East project – was awarded a contract for difference at just £57.50/MWh (US$75.85/MWh), showing that the efforts of developers and the supply chain over recent years are bearing fruit,” Mr Rieley told OWJ. “The Scottish supply chain has played a part in the deployment of offshore wind across Europe, providing skills and technology that have enabled these rapid cost reductions. That supply chain’s continued development, particularly now that projects like Beatrice, Hywind, Aberdeen Bay, Kincardine and Moray East are either under or approaching construction, will continue to provide benefits to a rapidly developing industry at a time of unprecedented cost reduction.” Asked about the Offshore Renewable Energy Science and Innovation Audit that was commissioned by the government to set out the UK’s strengths in key areas, Mr Rieley said the report highlighted the strong contribution Scotland and the north of England make to offshore renewables, noting in particular worldclass research and a strong supply chain, as well as the many innovation programmes and strong collaborations between industry and academia. “Of particular interest in the audit was Scotland’s expertise in heavy industry, specifically in offshore oil and gas,” said Mr Rieley. “Offshore renewables contracts that have been awarded in Fife, Nigg and Stornoway have already shown that expertise can be tailored towards the needs of the green energy sector, and it is hoped that further linkages between fabricators and port facilities can provide more of a compelling offer to offshore developers, increasing the UK share of major contracts and growing UK GVA.” The findings of the audit will now be used to develop the government’s industrial strategy and as evidence to support negotiations on a sector deal for offshore wind. OWJ
Offshore Wind Journal | 4th Quarter 2017
12 | AREA REPORT US
Northeastern states could build close to 8 GW of offshore wind, reports claim A high market scenario of 8,000 GW by 2030 could create more than 16,000 jobs in the US
The states of Massachusetts, New York, and Rhode Island have released reports that set out the context for offshore wind development in the northeast of the US and reveal its potential economic development benefits
T
he northeast has the potential for offshore wind deployment of between 4,000 to 8,000 GW by 2030 and the creation of up to 36,000 jobs according to the reports, which were produced for representatives of the Massachusetts Clean Energy Center (MassCEC), the Massachusetts Department of Energy Resources, the New York State Energy Research Development Authority (NYSERDA), the Rhode Island Office of Energy Resources, and the Clean Energy States Alliance, as part of the Roadmap Project for MultiState Cooperation on Offshore Wind Development. One report also detailed conceptual
plans for two Jones Actcompliant vessels to serve the offshore wind industry. The three reports are: • Northeast Offshore Wind Regional Market Characterization identifies the opportunities and challenges that will shape the offshore wind market. It estimates the scale of potential offshore wind deployment to serve northeast markets through 2030, given the nature of the offshore wind resource, federal lease opportunities, state policies, regional energy needs, existing electricity generation and planned retirements, and transmission capacity. The report finds that a low regional deployment trajectory could lead to
Offshore Wind Journal | 4th Quarter 2017
4,000 MW of offshore wind generation by 2030 off the Atlantic coast of the northeast. A high regional deployment trajectory could lead to nearly 8,000 MW, which could power almost four million homes. The report also provides background information on topics ranging from interconnection infrastructure and permitting timelines to electricity markets and relevant public policies. • US Job Creation in Offshore Wind quantifies the job impacts of offshore wind development and specifies the types of jobs to be created. A high market scenario of 8,000 MW by 2030 would yield a peak of over 16,000 full-time equivalent (FTE) baseline
jobs in the US in 2028, with baseline jobs being ones for which there are no compelling reasons why the work would not be performed by US workers. The jobs most likely to be performed in the US include project development and management, supply and installation of electrical substations and subsea cable, and windfarm operation and maintenance. Additional jobs are also possible, with manufacturing jobs seen as the sector with the greatest potential. When the additional jobs that have a high or medium probability of being performed in the US are included, the number of US jobs would climb to over 36,000 FTE annually
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US AREA REPORT | 13
between 2026 and 2028. A low market scenario of 4,000 MW would create roughly half as many baseline jobs as the high scenario and a smaller proportion of high or medium probability jobs. The high scenario would also trigger more investment in new factories and vessels in the US. • US Jones Act Compliant Offshore Wind Turbine Installation Vessel Study examines the functional requirements and costs of constructing purpose-built vessels that would comply with the US Jones Act and meet the needs of the US offshore wind industry. The Jones Act requires any vessel transporting cargo between US ports, or between US ports and offshore facilities, be built and flagged in the US. The study presents designs for two Jones Act compliant vessel options: a wind turbine installation vessel and a feeder barge. Estimating packages were sent to multiple US shipyards and indicative prices of US$222M for the wind turbine installation vessel and US$87M for the feeder barge were received. Using the cost data, a business model was created that showed 10-years of work, or a pipeline of approximately 3,500 to 4,000 MW of offshore wind capacity (roughly equivalent to the expected low regional offshore wind deployment trajectory), would provide the owner of a wind turbine installation vessel with a reasonable rate of return. “Offshore wind is gaining momentum as a significant new source of renewable energy in markets across the northeast, and these reports demonstrate that this regional resource will create thousands of new American energy jobs in the process,” said Alicia Barton, president and chief executive, NYSERDA. “New York is proud to partner with other states in the northeast
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Judith Judson: “reports are an important tool as we develop the offshore wind industry in Massachusetts”
to help advance offshore wind to market in a responsible and cost-effective way.” States will use the three reports’ findings to identify opportunities for co-operative actions that can contribute to the responsible deployment of offshore wind in the northeast at a scale necessary to reduce costs and establish a regional supply chain. The Roadmap Project is funded in part by a US$592,683 grant to NYSERDA from the US Department of Energy’s federally administered State Energy Programme. The low trajectory in the market characterisation mirrors existing state policies for offshore wind, including the 2016 Act to Promote Energy Diversity in Massachusetts, New York’s Clean Energy Standard, and authorising legislation in Rhode Island. Developing 8,000 MW would likely require states in the northeast committing to additional procurements. “We see these reports as key to laying the foundation for this growing industry,” said
State Energy commissioner Carol Grant. “The states in the region have individually taken important steps to advance offshore wind. The release of the new reports exemplifies how the states are also working together to advance offshore wind deployment and supply chain development.” “The Baker-Polito Administration is committed to supporting the growth of offshore wind in the Commonwealth, as shown by last year’s bipartisan energy diversification legislation authorising the largest procurement of offshore wind in US history,” said Massachusetts Department of Energy Resources commissioner Judith Judson. “Today’s reports are an important tool as we develop the offshore wind industry in Massachusetts and will help to inform our decision-making going forward.” For the jobs report, researchers looked at 17 sub-elements of the offshore wind supply chain – from blades, towers, cables, and foundations to project development and turbine maintenance – and determined how many jobs would be required to develop, install, and maintain the pipeline of projects in the high and low scenarios. They also identified 109 different occupations and found that there will be a significant need for technician-level workers, including in manufacturing roles; installation and commissioning positions; and operation, maintenance and service roles. While the analyses assumed that a cost premium would be paid in the early years for US offshore wind, the results in the market characterisation and jobs reports should be considered in the context of rapidly falling prices for offshore wind in Europe. This price trend
reflects the well-established infrastructure and supply chain in Europe, as well as the movement to larger wind turbines. The states are exploring ways to capitalise on this trend for offshore wind in the northeast. The Regional Market Characterization was produced by a research team led by Sustainable Energy Advantage, LLC and including AWS Truepower, Daymark Energy Advisors, and Meister Consultants Group. The jobs study was carried out by BVG Associates. GustoMSC researched and wrote the vessel study. An Advisory Committee representing a range of energy sector, economic, and environmental expertise reviewed and provided feedback on drafts of the reports. OWJ The reports are available for download at: http://bit.ly/2iq9JyG
Companies such as GustoMSC have begun to develop jack-up installation units that are aimed at the US market
Offshore Wind Journal | 4th Quarter 2017
14 | AREA REPORT China
CHINA LOOKS WEST FOR CUSTOMBUILT BLADES AND EXPERTISE CHINESE TURBINE MANUFACTURERS ARE TURNING TO WESTERN SUPPLIERS FOR CUSTOMISED BLADES FOR THEIR NEXTGENERATION OFFSHORE TURBINES
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n October 2017, Denmark-headquartered LM Wind Power unveiled what is said to be the longest blade for an offshore turbine in the Chinese market, the 75.1 m long LM 75.1 P, which was custom designed and built for Goldwind’s new 6.7 MW turbine. The first LM 75.1 P prototype blade was completed in September at LM Wind Power’s Jiangyin plant. The Chinese company’s 6.7 MW platform will be the largest offshore turbine in China and, combined with the LM 75.1 P, was designed specifically for Wind Class I areas offshore southern China off the coast of Fujian and Guangdong. LM Wind Power’s vice president, offshore, Alexis Crama said “We have more than 25 years of experience with offshore blades, including a strong track record in Europe and China. “With the LM 75.1 P, we are building on that expertise to deliver optimal performance for Goldwind’s turbine. We look forward to supporting Goldwind’s ambitions to unlock the vast potential for developing the Chinese offshore market.” The new blade continues LM Wind Power and Goldwind’s longstanding collaboration in China. In January 2017, LM Wind Power announced that its newly developed 66.9 m blades for Goldwind’s 3 MW wind turbine platform, the GW3S, had been installed on the first prototype turbine in Zhangbei. LM Wind Power currently employs around 2,500 people in China. The company operates blade manufacturing facilities in Tianjin, Qinhuangdao and Jiangyin and is ramping up production in Baodi. Shortly after the above announcement, LM Wind Power also confirmed that it had signed an agreement to develop a 71.8 m
Envision CEO Zhang Lei and LM Wind Power CEO Marc de Jong shake hands to mark the deal for the 71.8 m blade
blade for another Chinese offshore wind company, Envision. To enable it to build the new blades, LM Wind Power’s Jiangyin factory will expand and its manufacturing capacity will increase by 50%. The 71.8 m blade will be fitted to Envision’s new 4.5 MW platform and is expected to be installed for the first time in H1 2018. The new large-rotor turbine is designed to effectively meet the requirements of Wind Class II and III areas offshore northern China. Mr Crama said he anticipates that the Chinese offshore wind market will grow on average by 40% annually for the next five years. “LM Wind Power has been part of this journey since the beginning,” he said, “and we are investing significantly in new product development and technology for the Chinese market, including manufacturing capacity and people.” In Q2 2017, LM Wind Power unveiled another blade factory in China that is now part of its manufacturing setup. The new facility will be located in the Baodi district in the northeastern part of China, 40 km from LM Wind Power’s existing plant in Tianjin, which was established in 2001. The Baodi facility will be LM Wind Power’s fourth Chinese blade plant and the company’s 15th worldwide.
Siemens-Gamesa unit gets GWO accreditation Elsewhere in the Chinese offshore wind market, there was another important development in October, when the first Chinese wind turbine manufacturer was certified for basic safety training to the Global Wind Organisation (GWO) standard. Working with Lloyd’s Register (LR), Siemens-Gamesa has become the first wind turbine manufacturer in the country
Offshore Wind Journal | 4th Quarter 2017
to be certified to provide GWO Basic Safety Training (BST). The GWO BST framework was used by LR to assess SiemensGamesa’s approach to achieving a safer work environment. The certificate was presented at Siemens-Gamesa’s Tianjin Training Centre, which is now authorised to provide safety training to other companies in China to help reduce risks for employees working in the
wind power industry. The end goal of the GWO BST is to verify that an organisation can consistently deliver training for its own employees, or to other companies’ employees, to the relevant GWO standards that are set by its members. This approach helps to develop common industry training and best-practice processes on health and safety and reducing risks. OWJ
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16 | NEW MARKETS
Offshore wind projects being proposed
in the Baltic, Asia, Caribbean and elsewhere
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indEurope and the Estonian Wind Power Association have presented a declaration to the Government of Estonia, urging it to help replicate in the Baltic states what has already been done with offshore wind in the North Sea. The Baltic is a promising market for offshore wind energy in Europe with a favourable climate, strong and stable winds, low waves and shallow water. According to the recently launched WindEurope analysis on wind energy scenarios for 2030, the Baltic Sea, where 1.5 GW of offshore wind is grid connected today, will represent the second-largest basin for offshore wind, with potentially 9 GW installed by 2030. At the end of September 2017, WindEurope signed the Baltic Sea Declaration on Offshore Wind in Tallinn.
Offshore wind projects are being proposed in an ever-increasing number of countries – among the latest to consider developing wind as a source of clean energy are Ireland, Canada, Jamaica and the Baltic states The document, co-signed by wind energy associations from Estonia, Denmark, Finland, Germany, Latvia, Lithuania, Poland and Sweden, asks governments to enhance their regional co-operation with a view to supporting offshore wind deployment in the region. At the same time, WindEurope chief executive Giles Dickson and the chairman of the board of the Estonian
Wind Power Association, Martin Kruus, handed over a declaration to the permanent deputy secretary general for energy of the government of Estonia, Ando Leppiman. They urged the Estonian Government, which currently holds the EU Presidency, to build the political momentum that will help replicate in the Baltics what has already been done for the North Sea. The declaration covers several aspects of regional co-operation in the Baltics, from the need to set stable and clear legal frameworks to enhanced co-operation on spatial planning and grid connection. The final goal is to make full use of the renewable energy potential that the basin is offering to support the EU’s goals of decarbonisation, costeffectiveness and security of energy supply. A first step towards
achieving these objectives is to ensure that governments draft clear national energy climate plans that spell out the volumes of offshore wind they want to deploy post-2020. The long-term outlook and visibility will help create confidence and an attractive market for project developers and investors. On 11 October 2017, WindEurope kicked off the Baltic Sea Task Force as part of its Offshore Working Group. The task force will work towards achieving the goals set in the declaration. In Ireland, Parkwind, one of Europe’s leading offshore wind developers, has agreed an investment to become a partner in the Oriel windfarm, a 330 MW offshore wind project in the Irish Sea that would be Ireland’s first. The partners in the project note that Ireland has “vast” offshore wind energy potential, and they expect it to be developed in
Offshore wind energy has been primarily a European phenomenon but is now being considered around the world
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NEW MARKETS | 17
the coming decade. Parkwind believes it can support the Irish Government in establishing an Irish offshore wind industry, while generating economic activity and employment over the entire lifetime of the project. Oriel project director Peter Caluwaerts said “We are confident we can play a vital role for the emerging Irish offshore wind industry. It is our ambition to finalise the construction of the Oriel windfarm in 2020, thus assisting Ireland in reaching its 2020 renewable energy targets. To achieve such an ambitious timeline, we will immediately invest in the development of the windfarm and set up a full-scale project team, consisting of our own experienced people from Parkwind on the one hand and dedicated Irish professionals on the other hand.” Dong Energy and NaiKun Wind Energy Group have signed a letter of intent (LOI) that gives Dong Energy exclusive rights to negotiate a joint development agreement for the Haida Energy Field offshore wind project in British Columbia, Canada. The LOI also gives Dong Energy the
WindEurope chief executive Giles Dickson has urged Estonia to replicate in the Baltic what has already been done in the North Sea
opportunity to establish a long-term partnership with NaiKun Wind Energy Group. Located in Hecate Strait, between Haida Gwaii and Prince Rupert on the British Columbia mainland, the Haida Energy Field location has some of the strongest, most consistent winds in the world. If developed, the shallow water there would enable the project to use bottom-fixed
structures. Dong Energy said the Haida Energy Field could significantly contribute to meeting British Columbia’s future energy needs. “This agreement effectively connects the largest offshore wind developer in the world with a project that offers one of the strongest, most consistent wind resources in the world,” said Michael O’Connor, president and chief executiveof NaiKun. “Offshore wind is a reliable home-grown energy source, and we are excited to explore the Canadian market,” said Thomas Brostrøm, president, Dong Energy Wind Power North America. “We see this opportunity as a first step to bringing offshore wind power to Canada in what could become a strategic partnership with the nation’s front-runner project.” The US Trade and Development Agency (USTDA) has awarded a grant to the Petroleum Corporation of Jamaica (PCJ) supporting the development of an offshore windfarm in Jamaica. The feasibility study for the project will evaluate the viability of installing an offshore windfarm that, if built, would be the first
offshore windfarm in Jamaica and the greater Caribbean region. The USTDA said the project “offers potential export opportunities for a range of US equipment and services related to the design, development and operation of offshore wind power generation and transmission infrastructure”. PCJ has selected Keystone Engineering (KEI), a Louisiana-based energy firm specialising in the engineering, design, procurement, project management and construction support for offshore wind and oil and gas platforms, to conduct the feasibility study. KEI was the foundation design engineer for the first offshore windfarm installed in the US, the 30 MW Block Island windfarm off the coast of Rhode Island. “The Government of Jamaica has identified renewable energy development as a major pillar in its strategy for energy security,” said PCJ’s group general manager, Winston Watson. “This study will help the PCJ to get valuable data that can attract overseas investment for the development of our offshore wind resources.”
Tan Thuan project could be precursor to Vietnamese offshore wind
European expertise being applied in Taiwan
USTDA has awarded a grant to Power Engineering Consulting Joint Stock Company 2 (PECC2), a Vietnamese engineering company, to support development of a 100 MW nearshore windfarm in southern Vietnam. PECC2 has selected DNV Kema Renewables in Seattle to carry out the project design and feasibility study. DNV Kema has significant expertise in
DNV GL has signed a memorandum of understanding with several regional players in Taiwan and established a certification team in Taipei to support local and foreign companies planning projects there. Taiwan is a rising offshore wind market, with its long-term visibility in terms of policy, financial support and development, and is Asia’s second-largest offshore wind market after China. DNV GL’s Energy Transition Outlook report forecast that Asia will become the leading global offshore market, taking over from Europe, with 33% of global capacity to be installed in China alone by 2050. Industry stakeholders who signed the memorandum of understanding include the CR Classification Society, Electronics Testing Center Taiwan, Metal Industries Research & Development Centre, Taiwan Electric Research and Testing Centre and Taiwan Institute of Economic Research. OWJ
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renewable energy, particularly offshore wind, including direct experience with offshore wind in Vietnam. PECC2 is developing the 100 MW Tan Thuan windfarm in two phases. The first phase will be 24 MW and the second phase 76 MW. The windfarm will be built in Ca Mau province in southern Vietnam, an area notable for having the highest average wind speed in the country.
Offshore Wind Journal | 4th Quarter 2017
18 | TURBINE TECHNOLOGY
Low prices bid in recent auctions strongly suggest that developers know much larger turbines are in development and will be available for future projects
DEVELOPERS AND CERTIFIERS PREPARING FOR MASSIVE TURBINES Fast growth in the size of turbines is often cited as a major driver of cost reduction. Growth has been incremental to date, but statements by developers and by certification bodies such as DNV GL suggest much bigger units could soon be brought to market
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ast growth in the size of offshore wind turbines has been highlighted by Vattenfall, the developer of the proposed Norfolk Vanguard offshore windfarm in the UK, which is considering using turbines of up to 20 MW for the project. Kicking off the consultation process for Norfolk Vanguard, Vattenfall said it was considering using between 90 and 257 turbines with generating capacity of 7–20 MW each for the project. 20 MW is far larger – more than twice the size – than any turbine currently installed on any windfarm and well beyond the size and generating capacity of those currently available. The company is not committed to using any type or size of turbine at the moment but evidently feels confident that much larger turbines will be available within the project timeframe. Norfolk Vanguard would not be up and running until the mid-2020s. The potential of much larger, new-generation turbines has been cited as one reason that the cost of offshore wind energy is falling so quickly, enabling low and zero-subsidy bids to become established. The Swedish energy group has published its statutory consultation plans for the 1.8 GW Norfolk Vanguard project, known as a statement of community consultation. It has also set out, in a newsletter, its latest thinking on onshore infrastructure for the windfarm. When up and running in the mid-2020s, Vattenfall says Norfolk Vanguard will produce enough fossil-free electricity every year to meet the equivalent annual electricity demand of 1.3 million UK households, almost 5% of UK household demand. Norfolk Boreas, Norfolk Vanguard’s sister project, is in an earlier phase of the UK’s nationally significant infrastructure planning process, and its environmental impact assessment is ongoing. At about the same time that the Norfolk Vanguard consultation got underway, DNV GL’s renewables certification manager
Offshore Wind Journal | 4th Quarter 2017
confirmed to OWJ that his division is reviewing multiple turbines for certification that could generate more than 10 MW of power. Siemens and MHI Vestas Offshore Wind were mentioned as two of three manufacturers with designs currently in front of the classification society. “They’re all 10-plus MW. You can quote me on that,” said DNV GL executive vice president Dr Kim Mørk. However, DNV GL senior consultant Eeke Mast said getting to a projected 20 MW turbine in the next five years could be “problematic”. Ms Mast works on comparative and conceptual cost assessments on offshore windfarms in the renewables advisory section at DNV GL. “For our economics, we don’t go for 20 [MW ]. But I would always be very careful not to say we would never go to 20,” Ms Mast said. “[In an economic sense] in terms of both weight and cost of materials, [the optimal size] would be around 15.” “You would need some kind of disruptive technology to go to that 20 [MW].” Dr Mørk said one of the challenges in cutting manufacturing costs was the larger turbine blades needed. He said the blades require a great deal of manual work during production, which increases cost. The cost of energy produced by offshore wind has seen a dramatic drop recently, and much of that drop has been attributed to the increase in the size and power of the turbines being produced. MHI Vestas’s 9.5 MW turbine launched in June, and a number of analysts are predicting the possibility for 12–15 MW turbines in the foreseeable future. DNV GL has recently released a forecast projecting an incremental increase in size for wind turbines annually, reaching the 20 MW mark by 2023. OWJ
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20 | FINANCE
FLOATER FINANCE IN FOCUS
AS DEMONSTRATION PROJECTS TAKE TO THE WATER AS FLOATING OFFSHORE WIND PROJECTS MOVE FROM DEMONSTRATION TO THE COMMERCIAL PHASE, QUESTIONS NEED TO BE ASKED ABOUT HOW THEY WILL BE FINANCED, AS MARTIN GUZZETTI* EXPLAINS
From a financing perspective, floating offshore wind has some similarities with bottom-fixed windfarms, but also has important differences
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ntil now, utilities and technology providers may have been willing to bear the cost of demonstration projects for floating offshore wind on their balance sheets but will want third-party funding for their projects in future to reduce risk and to get external validation of the technology. It stands to reason that lenders and investors will work from what they know (offshore wind using bottom-fixed foundations) and try to understand how different floating offshore wind is from a risk perspective. The good news is that bottom-fixed offshore wind is something that lenders and investors are comfortable with, and the risk analysis with respect to items such
as turbine technology, regulatory context and price regimes will be based on what has already been done in the bottom-fixed sector and will not, for well-structured projects, raise new issues. The focus will therefore move to foundation technology, raising some questions. An obvious starter is, does the technology work? Do the foundations provide a stable enough base for wind turbines in all sea conditions, and can we be sure that they don’t create unexpected stresses on the turbine? Do engineers understand the combined effects of waves and wind on the structure of a turbine? Specific due diligence and transparency will be required on components that are new to the financial community, such
Offshore Wind Journal | 4th Quarter 2017
as the interaction between the operation of the turbine and the motion of the substructure, the export and inter-array cabling, the dis/connectivity of cables and the mooring lines (for maintenance purposes) and issues such as the type of ballast system used (active or passive) and the use of a floating offshore substation (which would be a first for the offshore wind industry). A second question would focus on cost and feasibility of construction. Is it possible to build these huge structures in the numbers required and the timescales contemplated? Is the onshore infrastructure available to do that? Other questions will be raised about the operations and maintenance (O&M) strategy for floating offshore
windfarms. How will maintenance on floating turbines in deep waters be carried out? Is it do-able, or cost-effective, to bring turbines back to shore to repair them? And what about maintenance of foundations, mooring systems and power cables? If the answers to these technical questions are satisfactory, questions will then move to contractual responsibility of the parties involved. Can the responsible party be identified if a problem occurs, or is there a risk of dispute between the turbine supplier and the foundation provider? Are foundation suppliers strong enough, financially, to provide the necessary guarantees backing their technology? Bottom-fixed offshore wind forced financiers to deal with multicontract construction and to understand the corresponding interface risks. They have done so, but are always very cautious about it. With floating offshore wind, we are once again in a multicontract situation, but with a new set of interfaces and risks that financiers will need to be comfortable with. In addition to turbine manufacturers and marine civil contractors, there will be a new, critical party involved in the form of a shipyard and/or a floating technology provider. In particular, the design of the floating foundation must
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ensure that the wind turbine generator remains within its operational envelope. Full co-operation from the turbine supplier will be required to delineate the integrated design requirements and to confirm acceptability of the substructure’s performance. Not only must the responsibility of each party be clearly defined, but financiers will also want to be comfortable that the operational envelope can be measured in a way that is acceptable – and binding – for all parties if problems arise. They will also need to know that the consequences – and potential cost – of moving outside the agreed parameters are understood, whether it is ‘just’ lost production or if it precludes the need for repairs to any part of the equipment. From a contractual point of view, design certification by a reputable classification body is an obvious ‘must have’, but that will not eliminate the need for a detailed interface matrix for the operational phase of a floating windfarm. Availability guarantees for the turbine and the substructure, together with the power curve warranty, will be the ‘hot items’ to negotiate, as will the commitments of the technology provider. Conversely, risk allocation during construction is likely to be more straightforward than with bottom-fixed foundations, because most of the construction work can be carried out ashore where there is limited weather risk. Floating offshore wind will, in many cases, also have a more straightforward installation process than that for bottomfixed foundations with, in many cases, the structures being towed to the location rather than assembled there. Well-known principles of contractual strategy, which have facilitated project financing for bottom-fixed projects, can also be applied
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*Martin Guzzetti is a financial analyst and contracting adviser at Green Giraffe. He joined the renewable energy financial advisers in 2016 and has provided contracting advice to the developer of a pilot floating windfarm in France and collaborated with a floating technology provider in regard to its project developments in Scotland. Mr Guzzetti's blog was originally posted on Green Giraffe's website and edited/adapted for publication in OWJ.
to floating offshore wind. Like bottom-fixed windfarms, the contracting strategy for floating offshore wind will see the scope of work broken down into well-defined lots, priced on the basis of fixed lumpsum amounts; the inclusion of delay damages and delay schedule rates into contracts, in order to protect developer and contractor against possible underperformance; and the implementation of absolute liability caps for contractors that are high enough to compensate for losses resulting from an employer being sued. The turbine availability track record of floating offshore wind technology and strength of
industrial counterparties will be important to investors and lenders, and technology that has been used successfully in demonstration projects that have a good track record is more likely to be financed on a non-recourse basis. Ample contingency budgets, both for the construction and maintenance phases, together with a comprehensive insurance package will be essential components of the contractual and financing package. One aspect of floating offshore wind that will differ from bottom-fixed windfarms is the very different political context. Support for renewables in countries such as Taiwan and the US is relatively untested. Some projects have faced obstacles such as challenges to permits or, as in Spain, retroactive changes to pricing regimes. Financiers will want to be comfortable with the specific regimes put in place for floating offshore wind and be reassured that such regimes are sustainable. This means that tariffs must be reasonable – not too different from those for bottom-fixed offshore windfarms and other renewable energy technology – and they will need to feel that there is sufficient strategic rationale to develop the technology in a country and demonstrated public support for doing so. Private sector financiers will probably want to see multilateral financing institutions (such as the European Investment Bank, export credit agencies or public development banks) involved in early projects to provide ‘political cover’ to a certain extent. If all of this can be resolved via technical and legal due diligence, it is likely that the commercial terms of the first deals for floating offshore wind will be guided by traditional offshore wind market
precedents but end up, at least initially, being rather more conservative. One can expect lower leverage (with 50:50 debt to equity ratios rather than the 70:30 that is common for bottom-fixed windfarms, for example) and higher debt pricing (with probably a 50–100 basis point premium on margins above traditional offshore). Prior to the first commercial deal, project developers and technical advisers must take the time to educate the financial community so that investors and lenders understand the risks associated with floating offshore wind technology and are comfortable that the risks can be managed. Funding for early commercial-scale floating offshore windfarms will be subject to strict conditions. This means that the cost base of early projects may not be the most competitive. However, early deals will nevertheless be vital for the industry and will enable floating offshore windfarms to build up a track record that will reassure investors and enable subsequent deals to be done on more favourable terms. OWJ
Finance providers will need to be sure that floating foundations can maintain a turbine within its operational envelope
Offshore Wind Journal | 4th Quarter 2017
22 | SERVICE OPERATION VESSELS
PURPOSE-DRIVEN DESIGN CREATES
LOGISTICS-LED SOLUTIONS
Service operation vessels that have entered service recently and are on order highlight the trend towards designs that combine a high level of operability, low operating costs and logistic innovations
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mong the most innovative of service operation vessels (SOVs) currently on order, the Louis Dreyfus Armateurs (LDA) newbuild has a number of features that distinguish it from other examples of the type. Designed by Salt Ship Design in Norway and being built by Cemre Shipyard in Turkey, LDA’s SOV is the subject of a long-term contract with Dong Energy. It will operate on four offshore windfarms off the German coast – Borkum Riffgrund 1 and 2 and Gode Wind 1 and 2 – providing a base for windfarm technicians. Due to be delivered by the Turkish yard in the fourth quarter of 2018, the 83.0 m vessel has a beam of 19.4 m and will be equipped with a dynamic motion compensated gangway with what Salt
Ship Design describes as “a unique onboard logistic solution.” LDA worked closely with Salt Ship Design to develop a vessel tailored for the needs of the offshore wind industry. “This has resulted in a very purpose-driven SOV,” said the Norwegian naval architect. “LDA is expanding its range of services in the renewables industry. Its personnel have been working closely with us for a long time to develop a vessel tailored to meet the needs of the offshore wind industry,” a spokesperson for Salt Ship Design said, “in particular, focusing on enhanced operability and efficient logistics. The contract is an important milestone for us because the renewables industry is becoming an increasingly important market.” The ship will have accommodation for a minimum of 60 windfarm technicians and will provide them with comfortable
conditions, including individual cabins, a gym and a cinema. The technicians will be transferred to the wind turbines via a specially designed daughter craft (in case of good weather conditions) and will use the motion compensated gangway in heavy seas. The daughter craft will be capable of transferring eight windfarm technicians and 1 tonne of cargo to a turbine. The motion compensated gangway will have a range of approximately 19 m and will be complemented by a unique motion compensated crane with a lifting capacity of 1 tonne at 23 m. LDA has opted for the construction of a highly specified vessel that combines a number of innovative ideas, not least in terms of its environmental impact and operating costs, which will both be reduced as a result of the adoption of a
Designer Damen describes Bibby WaveMaster 1 as a "total access and accommodation solution”
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SERVICE OPERATION VESSELS | 23
hybrid diesel-electric propulsion system combining diesel engines and batteries. The windfarm service vessel will have a DC power distribution grid that will allow batteries to be integrated into it, making the ship more environmentally friendly and efficient. ABB is installing the DC grid along with what it calls a power and energy management system enabling the generators to run at variable speeds while also charging the batteries. In a statement about the system, ABB marine and ports global product manager for the Onboard DC Grid John Olav Lindtjørn said “Energy storage can be used for many purposes on board. Sometimes it serves as the sole energy source, but for this windfarm vessel, it is being deployed as an effective supporting element for the main engine.” The DC grid will integrate two sets of batteries that will be used primarily for spinning reserve and peak shaving so that power peaks during operation can be covered by the battery rather than starting another engine. Battery power can also act as backup for running generators, reducing the need to run spare generator capacity. The level of operating efficiency available in a hybrid power system reduces wear and tear on engines and significantly increases fuel efficiency at lower loads where, in traditional AC power systems, generators run at a fixed maximum speed regardless of the power demand on board. Apart from enhancing the ship’s green credentials in the environmentally conscious offshore wind industry, ABB also points to a benefit for the vessel’s crew: reduced vibration when the hybrid system is on battery power. MAN will supply the 8L21/31 variablespeed gensets for the vessel, which will also feature the company’s EPROX energy-saving electric propulsion system, which will further reduce the vessel’s fuel consumption and emissions. The engines will be prepared for IMO Tier III and set up in such a way that they can be retrofitted at a later date with a selective catalytic reduction system. This is to cater for the possibility that IMO Tier III NOx emission limits could be introduced, without obligation, in NOx emission-control areas in the North and Baltic. Uptime in Norway will supply the walkto-work gangway for the LDA newbuild. TTS Group and Ulstein will provide the motion compensated crane. Together, the companies have been awarded a contract for a TTS Colibri motion compensated
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LDA’s new vessel will be the first with the TTS Colibri motion compensated crane
crane for the SOV. The new crane combines TTS’s expertise in crane design and manufacturing with Ulstein’s expertise in motion technology and analysis. “Two features make the TTS Colibri unique compared to other solutions in the market,” claimed Ulstein Equipment managing director Gilbert Rezette. “Firstly, the Colibri system is a stand-alone addon device for a standard offshore crane. It adds functionality, while the crane maintains its functionality as a fully-fledged offshore crane including deepwater subsea capabilities. However, what makes this system truly unique is its groundbreaking anti-sway technology, which also allows it to mitigate wind-induced motions that act directly on the load. “3D motion compensation technology is not new to the industry and has enabled greater operability for personnel transfer between vessels and fixed offshore platforms through the use of motion compensated gangways,” he said. “However, operations typically require personnel and equipment to be transferred between a vessel and platform. Hence, TTS Colibri is a natural step in enhanced vessel operability, providing motion compensated lifting to match the increased operability offered by motion compensated gangways.” “Joining forces has enabled both our companies to offer a serious and commercially very attractive alternative in this market segment,” said Carl Herland, sales manager at TTS Offshore Solutions, a
subsidiary of TTS Group. “Colibri is suitable for retrofit to existing cranes, making it a viable solution for upgrading cranes that are already in service. Hence, it offers shipowners the ability to enhance the flexibility of their existing fleet.” Of the SOVs that have recently entered service, one of the most noteworthy is Bibby Marine Services’ Bibby WaveMaster 1. Although primarily intended for the offshore wind industry, this vessel is also well suited to work in the offshore oil and gas industry, as contracts already awarded to the vessel demonstrate. Designed by Damen and built by the Dutch group’s yard in Galaţi, Romania, Bibby WaveMaster 1 completed sea trials in the Black Sea earlier this year and set sail for the UK, where it began work on its first project, supporting offshore construction work on Innogy’s Galloper offshore windfarm off the east coast of England. The vessel was chartered by James Fisher for three months (plus options) of work related to the commissioning of the substation and turbines on the windfarm. Having completed work on the Galloper windfarm, Bibby WaveMaster 1 will transition into the offshore oil and gas market early in 2018, having clinched a contract from energy group Total supporting gas platform work in the North Sea. The SOV can accommodate up to 90 workers and crew and has a heightadjustable walk-to-work gangway with a six-stop elevator for 100% stepless access. There is a helideck and daughter craft for
Offshore Wind Journal | 4th Quarter 2017
24 | SERVICE OPERATION VESSELS
various access and support functions. Launched at Damen Shipyards Galaţi on 24 March 2017, Bibby WaveMaster 1 is an innovative design that has been customised in order to ensure that windfarm technicians – or oil and gas maintenance personnel – can directly access the ship’s gangway from the warehouse areas. The helideck, daughter craft and crew transfer vessel landings (with refuelling) complement the vessel’s versatility. Damen’s director of business development and market intelligence Peter Robert explained that the focus of the design was on providing safe, comfortable access to far-from-shore windfarms including, in a worst-case scenario, severe central North Sea conditions. This resulted in a vessel capable of providing turbine access in up to 3.1 m significant wave height that is able to remain at sea for periods of up to one month at a time. Bibby Marine Services Ltd chief executive Stephen Blaikie said the vessel is built around a stable dynamic positioning class 2 platform so it offers a very high level of operability. “It will provide safe offshore transfers for personnel by way of a motion compensated access system. Equipment will be securely transferred by way of a heave compensated offshore-rated knuckleboom crane,” he said. Mr Blaikie said working efficiency is one of the key drivers behind the design of the vessel. The space inside has been carefully planned in terms of storage, workflow and logistics to ensure that the movement of both people and goods is smartly optimised, and the ship will also be as ‘green’ as possible, with minimal emissions and low fuel consumption. Comfort is also paramount, and the vessel will have Comfort Class 2 standard accommodation with all of the 60 ensuite berths equipped with TV, wifi and
Stephen Blaikie: “Bibby WaveMaster 1 will provide a very high level of operability”
leisure facilities. As well as offering a high standard of living, the vessel hullform has been designed with comfort in mind, ensuring exceptional seakeeping abilities and minimising motion sickness to ensure technicians are fit for work. Mr Robert describes the new unit as “much more than just a vessel.” He sees it as a “total access and accommodation solution.” He highlighted the fact that its length, breadth and draught all reflect the metocean data Bibby has studied in the area that it is likely to encounter in UK Round 3 projects. “At 90 m, the hull is longer than that of a conventional platform supply vessel as used in the offshore oil and gas sector, from which some SOV designs are derived, and the bow section has been lowered by 1.5 m to create a V shape,” he told OWJ. “This feature offers significantly reduced slamming and facilitates inclusion and improved offshore operation of the bow thrusters. The aft ship has been adapted specifically to the tasks that the vessel is designed for, including stern to waves operation.” The most pronounced features that have been included are the strong V shape in the frames in the aft ship to reduce slamming and the concentration of volume in the mid-ship region to achieve a slender aft ship. Mr Robert says both features should make stern-to-weather operations more comfortable than on a vessel derived from a conventional PSV design. As Mr Robert also explained, ergonomic design sees the interior spaces grouped together into similar task areas. This not only separates ‘clean’ and ‘dirty’ tasks but ensures short lines of communication and eases workflow. The accommodation has been placed in the midships area for additional comfort – the location reducing vertical acceleration by as much as 15%.
MHI Vestas stipulates low fuel consumption for newbuild SOV MHI Vestas and Esvagt are building on their existing relationship with a fuel-efficient SOV design for the Deutsche Bucht (DeBu) offshore windfarm. The SOV is due to enter service in August 2019. It will operate in support of the DeBu windfarm on a 15-year contract between the companies, which is the longest in Esvagt’s history and its largest in terms of value. The SOV for the DeBu project will be equipped with a walk-towork gangway system with a bespoke tower with a crane placed on top of the tower. Together with Esvagt’s Safe Transfer Boats (STBs), they
Offshore Wind Journal | 4th Quarter 2017
will be used to transfer personnel from the vessel to wind turbines. Esvagt’s chief operating officer Kristian Ole Jakobsen said “MHI Vestas prioritised a fuel-efficient ship, and we are proud to be able to deliver a vessel of this size with remarkably low energy consumption,” noting that the STBs will be able to make port calls independently of the vessel, thus further reducing its environmental impact. Havyard, the designer of the vessel, said it will have particularly low levels of fuel consumption thanks to the use of diesel-electric propulsion and a hydrodynamically optimised hullform. OWJ
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Service Operation Vessels - the preferred crew transfer option at fixed and floating offshore wind farms
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26 | LEGAL MATTERS
MANAGING DEFECTS IN THE OFFSHORE WIND INDUSTRY Richard Booth,* senior associate at HFW, considers what constitutes a defect, a contractor’s liability and the owner’s typical remedies, as well as practical approaches to managing defects
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nsurprisingly, defects are one of the major causes of dispute and construction litigation in the offshore industry, but there is often disagreement when it comes to identifying what constitutes a defect. In short, a defect is work that fails to comply with the requirements of the contract such that the non-compliant work is a breach of contract, for example, a failure to comply with the contract terms, the specification or drawings, as well as any implied terms as to quality, workmanship, performance or design. It may be difficult to identify whether the completed work is defective or not. While some standard form contracts, such as FIDIC, do not define what a defect is, it is common practice to define a defect in the offshore sector. At its simplest, a defect is defined as any damage or defect arising from a failure of the works to comply with the contract. If a definition is not included, then whether or not the work is defective can be influenced by local law and practice. An owner will normally wish to have express rights
Richard Booth: “it may be difficult to identify whether work is defective or not”
Offshore Wind Journal | 4th Quarter 2017
to take action upon discovery of any defective work. Such an express right also helps to avoid the argument that the contractor does not need to correct the defect until completion. Typical rights include the right to inspect, monitor and open up the works. If a contractor refuses to correct a defect, the owner will typically have a number of remedies available to it prior to take-over', for example, to do the work itself (or through others), require a reduction in the contract price or terminate the contract if the effect of the defect is to deprive the owner of ‘substantially the whole benefit of the works or any major part of the works’. If the contract does not include an express termination right and if the defect is such that it goes to the root of the contract, the owner may be able to claim that the contract is repudiated for fundamental breach. At take-over, works are generally accepted when they are practically complete. It is invariably the subject of some form of certification. Defects in work that are significant will prevent certificates of practical completion from being issued. However, a certificate does not usually mean that the works are defect free (as defects may not have become apparent). In addition, for example, clause 10.1(a) of FIDIC, minor defects are often allowed to pass over into the defects notification/defects correction period (DLP). The contractor will be subject to an express contractual obligation to repair, rectify or
make good defects within the DLP (with an entitlement to be paid for repairing defects that are not due to its own fault). The length of the DLP will be subject to negotiation but is typically five years for offshore cabling contracts, with shorter periods seen in turbine supply agreements (TSAs). Whether the same DLP applies to all inter-array cables or turbines (for a TSA) will depend on how the contract is structured. It is generally more practicable to have a DLP covering all a particular contractor’s scope ending on a common date (rather than a number of DLPs expiring on different dates). The DLP is typically extended if a defect arises (known as an evergreen warranty), subject to a longstop date. We typically see long-stop dates of around seven years following takeover (with shorter periods for TSAs). Evergreen warranties are intended to prevent a contractor from just doing the minimum work necessary for the repair to last until the end of the original DLP. A DLP ought to be clearly worded to oust any parallel claim the owner may have for damages for breach of contract. This is because the obligation on the contractor to return to remedy a defect is generally expressed as the owner’s exclusive remedy. The owner also retains a cash retention for the duration of the DLP as security for the contractor’s performance. Owners increasingly seek ‘serial’ defect provisions (particularly under TSAs). This is if an agreed number
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LEGAL MATTERS | 27
of or more identical parts or components are discovered to be defective due to the same root cause. If this occurs prior to take-over, the contractor will be obliged to stop all work on the affected parts or components, identify other potentially affected parts and the root cause of the defect and submit a root cause analysis report including a methodology for how the contractor proposes to eliminate the root cause. The owner will be entitled to approve the analysis and methodology before any works are recommenced. Serial defect provisions can also be imposed following take-over. If the owner does not agree with the approach being proposed, it may commission its own independent expert, with the contractor bound by the recommendations. Given the risk of being bound by an owner’s expert, a contractor will often seek to incorporate an interim dispute resolution process into the contract (such as contract adjudication) as a pre-condition to the owner’s expert’s view being binding. A contractor often warrants that the works will be ‘free from defects’ at completion. What is often little appreciated is that a contractor is regularly obliged to build in accordance with a design or a standard, even though it has been proposed, or even drafted, by the owner. If the contract incorporates such a requirement and the contractor promises to design or build in accordance with it, it is binding, irrespective of who initially produced or proposed it. If the works do not achieve the stipulated performance guarantees due to the ownerspecified design or standard, the contractor cannot avoid liability by contending that the extent of its obligation was tempered by the fact the offending design or standard was proposed by the owner. Irrespective of the length
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Although some standard form contracts, such as FIDIC, do not define what a defect is, it is common practice to define ‘defect’ in the offshore sector
of the DLP, a contractor will be liable for defects that may arise after the end of the DLP. In England, this liability arises under the Limitation Act 1980, with contracts executed as a deed attracting a 12-year liability period. An owner is not obliged to give the contractor an opportunity to rectify a latent defect; it can instead rectify a latent defect itself. If an owner chooses not to use the original contractor, it is likely the amount it may recover from the contractor will be limited to the amount it would have cost the contractor to rectify the defect itself. That said, if an owner demonstrates that it lost faith with the original contractor, it may be able to recover the full cost of appointing a different contractor (as this will not be considered a failure to mitigate). Parties often focus on agreeing where risk lies for unforeseeable ground conditions, perhaps also limiting a cable installation contractor’s liability for its cable burying performance to ‘reasonable burial endeavours’, and give careful consideration to interface risk between packages. Why, however, do parties also not expressly clarify what is not to be considered a defect? For example, a cable installation contractor ought to exclude liability for seabed movement from what is a defect. As well as agreeing the
duration of the DLP, it is possible to reduce the 12-year statutory limitation period for latent defects. This can be reduced to a shorter period, or a financial sub-cap could be agreed. At its most extreme, a contractor may seek to limit its liability to the DLP by ousting liability for latent defects. This can be done by agreeing that the certificate issued at the end of the defects period has ‘conclusive’ effect as to the contractor’s liability under the contract. It is often supported by an exclusive remedies clause making clear that the employer’s remedies are limited to those contained in the contract. During negotiations, it is important for a contractor to seek to secure a back-toback position with its own supply chain to avoid being left with liability for a defect that is the responsibility of its own subcontractor. If a defect materialises in the cables or a turbine, it often costs upwards of £1M (US$1.3M) to rectify the defect (principally due to the cost of mobilising a vessel spread to the windfarm). On this basis, it is sensible for parties to pay close attention to how the contract requires a defect to be notified. The contractor will want prompt notice of any suspected defects, together with adequate particulars as to what the defect is. This will allow it to react and mitigate the extent of the
defect or associated damage. The contract should permit the contractor to attend any inspections of the suspected defect, whether at the windfarm or, if the offending component or part has been removed, at another location. Parties should maintain their records of the installation works (and impose similar retention policies on its supply chain). A contractor may have liability for up to 12 years following take-over, and its own records may be essential for determining liability for a defect that arises a decade or more after take-over. The owner should maintain a comprehensive register of defects, including a log of any incidents that could have impacted on the parts of the windfarm (such as anchor drags). A party notified of a disputed defect should consider retaining an external expert to advise about issues of liability from an early stage. The expert will be able to help direct the focus of the contractor’s own investigations to assist with the identification of the root cause of the defect. OWJ *Richard Booth specialises in construction and engineering matters and has wide experience of working on both in the UK and internationally, with a particular focus on renewables such as offshore wind and solar.
Offshore Wind Journal | 4th Quarter 2017
28 | PROJECT FOCUS
RAMPION REACHES MILESTONE AS FINAL TURBINE IS INSTALLED
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ince the first MHI Vestas 3.45 MW turbine was installed for the Rampion offshore windfarm in early March 2017, two jack-up vessels – MPI Discovery and MPI Adventure – have been at work on the project. Together, the vessels have been transporting the components for eight turbines at a time from Esbjerg in Denmark to the site, which is 13 km off the Sussex coast. Each turbine consists of an 80 m tower, weighing approximately 200 tonnes, which has been lifted and positioned on a foundation; a nacelle, fitted to the top of each tower, which houses the generator and gearbox; and three blades, each measuring 55 m in length, which have been hoisted and connected one at a time.
September 2017 saw the last of a total of 116 turbines installed on the Rampion offshore windfarm off the south coast of the UK
Installation of the turbines on the Rampion offshore windfarm was completed in September
Offshore Wind Journal | 4th Quarter 2017
Rampion Offshore Windfarm development and stakeholder manager for the project, Chris Tomlinson, said “We’re proud to have achieved this feat, installing all 116 turbines, ahead of schedule, in just over six months. This milestone sees the safe installation of all physical components visible above sea level, representing the full extent of the windfarm. “Since the spring of 2017 we have also completed the lay and burial of 112 km of array cables, which connect the turbines to the offshore substation, which was installed in April. “We now look forward to Rampion’s first generation of electricity later this year and to working towards completion and full operation in 2018.” Further construction and commissioning work will now continue on the offshore and onshore substations, as well as work to complete the onshore cable route, before the electrical infrastructure is complete and ready to carry power generated by the windfarm. According to consultancy and market research company 4C Offshore, first power from the project was originally anticipated in 3Q 2017, but this plan was delayed, possibly, it said, due to cabling issues. With offshore construction approaching completion, work continues on land, with the operations and maintenance (O&M) base for Rampion due to be completed in 2018. The base will be home to a 60-strong O&M team, who will operate the windfarm once it is constructed. The new facility will incorporate offices and welfare facilities,
as well as an industrial warehouse for storage of parts and equipment for the maintenance of the windfarm. The 400 MW project is being built by Eon, the UK Green Investment Bank Ltd and Canadian energy infrastructure company Enbridge. When complete it will provide enough electricity to supply almost 347,000 homes a year, equivalent to around half the homes in Sussex. Development of Rampion commenced in 2010 after Eon was awarded the exclusive rights to develop the area by The Crown Estate. It then started to undertake engineering and environmental surveys, and early stakeholder engagement to inform draft proposals. In 2012 the company consulted on the initial proposals, which included a 12-week community consultation period where we sought views on the project. As a result of continuing consultation and engineering design works, the proposed project continued to be refined, and in March 2013 Eon submitted an application for a development consent order to the (then) Secretary of State for Energy & Climate Change. The project plans and documents that were submitted were formally examined by the Planning Inspectorate on behalf of the Secretary of State, from July 2013 to January 2014. On 16 July 2014, the Secretary of State formally granted consent for the Rampion project, which is now set to become the first windfarm off the south coast of England. OWJ
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MANUFACTURER PROFILE | 31
Cost-effective, customised solutions help drive offshore costs down Long known as a supplier of access systems for the offshore sector in Europe, UK-based Osbit recently broke into the Chinese market for the first time, and believes it has solutions that will help reduce energy costs in many other countries
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ctober 2017 saw Osbit secure contracts that demonstrated its ability to produce cost-effective offshore access solutions whilst also developing bespoke equipment that provide solutions to projectspecific challenges. The northeast of England offshore engineering and technology company has completed its first project in the Chinese offshore wind market, successfully delivering a bespoke MaXccess crew transfer system, but also announced details of quite a different project, to deliver an innovative boat landing and access system that will be fitted to a jack-up accommodation vessel destined for Dong Energy’s Hornsea Project One offshore windfarm. Speaking exclusively to OWJ, Brendon Hayward, the company’s managing director, highlighted what he described as China’s “very ambitious” offshore wind targets, along with potential opportunities in Asia, in markets such as Taiwan and Japan. However, these countries are not the full extent of the company’s export ambitions – Mr Hayward also highlighted opportunities elsewhere, such as in the Middle East, in related markets, such as offshore oil and gas. In the Middle East, environmental conditions are more benign than in the North Sea and some other regions, Osbit’s ability to provide cost-effective solutions could come into play. In regions such as this, Mr Hayward believes, there is growing recognition that ‘bump and jump’ is no longer a satisfactory – or sufficiently safe – way of transferring personnel from boat to boat or boat to platform. Equally, said Mr Hayward, in other parts of the world, demand is growing for access solutions for vessels that can compete with helicopters for long-range personnel transfer. “Unlike some companies in the offshore access system market, we are not seeking to be a rental company,” Mr Hayward told OWJ. “Our focus is on supplying the best possible equipment and on problem-solving for clients with specific requirements. The Chinese deal saw Osbit deliver an improved T12 walkto-work system that will be installed on a 20 m crew transfer vessel that is under construction by Aurora Yachts shipyard in Dalian, China. The vessel will be used by State Power Investment Corporation (SPIC), one of China’s top five power suppliers, as part of its Binhai windfarm projects. Providing engineers with safe access to offshore wind turbines, the MaXccess T12 can operate in 2 m significant wave height. Assembled at Osbit’s facility at Port of Blyth, the T12 is being transported to the Dalian yard where it will be installed and commissioned on the vessel with the support of a team of Osbit engineers.
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Osbit says the boat landing system for the Hornsea Project One offshore windfarm is an example of its problem-solving ability and bespoke solutions
The T12 is part of Osbit’s growing range of active and passive modular access systems, which support catamaran crew transfer vessels, service operation vessels (SOVs) and jack-up accommodation vessels. The project built on Osbit’s previous activity in southeast Asia, which includes a T18 MaXccess system that has been operating successfully at the Fukushima offshore windfarm in Japan for the past three years. The innovative boat landing and access system for the Hornsea Project One offshore windfarm demonstrates another aspect of the company’s capability. It was commissioned by Aberdeen-based Gulf Marine Services (GMS) UK Ltd and will be installed on one of its self-elevating, self-propelled, dynamically positioned ‘largeclass’ accommodation vessels. GMS required the development of a system to facilitate crew transfers to and from a jacked-up vessel to crew transfer vessels and offshore substations. Utilising a unique access tower with an integrated boat landing, technicians will be able to safely access transfer vessels regardless of whether the accommodation vessel is in a floating position or has been jacked-up to a pre-determined deck height of 21 m above sea level. Osbit’s system, in accordance with GMS’ requirements, is integral to allowing work crews to remain offshore, rather than making daily trips to and from shore and will facilitate up to 50 crew transfers each day. OWJ
Offshore Wind Journal | 4th Quarter 2017
Offshore Wind Journal Conference
6 February 2018, Novotel London West
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The Offshore Wind Journal conference will be held as an intensive one-day event, on the day preceding the Annual Offshore Support Journal conference. This event is a must-attend event for anyone with assets and expertise that could be used in the offshore wind sector. Having become an established part of the energy industry in Europe, offshore wind is being adopted in the US, Japan, India and many other countries, so don’t miss out on a unique opportunity to find out more about the size and scale of the opportunity and how to get into the market. The surge in interest in offshore wind will lead to significantly increased demand for all types of vessels that are required to build and service an offshore windfarm, from survey vessels, foundation and turbine installation units, cable-layers, crew transfer to offshore accommodation vessels. It will also lead to a surge in demand for equipment and technology for those vessels. Against this backdrop, the 2018 Offshore Wind Journal conference will address the latest market and technological developments. Particular focus will be placed on different vessel types and on equipment such as motion-compensated gangways for ‘walk-towork’ access. Platinum sponsor
Programme Highlights The programme is dedicated to meeting the needs of the owners, operators and managers of offshore wind vessels. It provides numerous networking opportunities during lunch, refreshment breaks and drinks reception. • Analysis of offshore wind vessel market data, business trends and developments • Key discussions on new vessel designs, builds and conversions • Breakdown of the types of vessels needed and specifications required to complete projects during installation and maintenance • Analysis of crewing requirements, challenges and best practice strategies • Future outlook for offshore wind sector including floating offshore windfarms and upcoming projects in deeper waters • New foundation and turbine installation vessels: meeting the challenge of larger turbines • Evolution of service operation vessels – what next? • New types of crew transfer vessels • Status of Jones Act application to offshore wind • Offshore companies’ potential role in floating offshore wind • What recent auctions mean for the prospects for offshore wind.
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OFFSHORE ACCESS/WALK-TO-WORK | 33
FAST-EVOLVING ACCESS SYSTEMS HAVE GREATER, FASTER LIFTING CAPABILITY
A new type of highly capable, energyefficient walk-towork gangway has entered service in UK waters as established player Ampelmann unveils new units and manufacturers add lifting capability to offshore access systems
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utch company Ztechnologies and its offshoot Zbridge have developed a new offshore access system that has been contracted to provide walk-to-work services on Østensjø Rederi’s construction support vessel Sun Enabler. The Zbridge system was mobilised in August and is currently operational on Dong Energy’s Race Bank offshore windfarm. Developed by Ztechnologies together with a specialist manufacturer of hydraulics and control systems, the Zbridge is a Bureau Veritas-certified walk-to-work system and uses a patented system to compensate for the movement of vessel pitch, roll and heave. The company says the Zbridge provides direct access with an elevator for personnel and cargo to the 18 m plus level. It allows for continuous access for personnel and cargo of up to 500 kg without undocking. It has been proven to work in 3.5 m waves and wind force 8. According to the company’s website, Zbridge was designed to operate in waves of up to 4.5 m Hs. Ztechnologies has established Zbridge BV as an independent company to further develop the Zbridge concept. Planning
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Zbridge uses a patented system to compensate for the movement of vessel pitch, roll and heave
for construction of Zbridge systems for sale or rental is now underway, said Zbridge general manager, Baastian Spruit. Mr Spruit told OWJ that, apart from its ability to transfer personnel and equipment in challenging conditions, the design of the system means that it will use significantly less energy than competing systems. One of the founders of the walk-to-work sector, Ampelmann has teamed up
with Seaqualize, a Dutch marine motion technology specialist, to develop a new version of its offshore access system for smaller vessels, such as crewboats. The Ampelmann S-type motion compensated offshore access system is designed specifically for integration into large, high-speed vessels such as those involved in crew change operations. It is designed to compensate for the
sometimes challenging motion characteristics of these vessels when in dynamic positioning (DP) mode alongside a platform. This is combined with a significant reduction in power requirement and weight of the gangway, which has made it possible to install it on small vessels. The solution Ampelmann has developed incorporates heave compensation technology from Seaqualize.
Offshore Wind Journal | 4th Quarter 2017
34 | OFFSHORE ACCESS/WALK-TO-WORK
This patented technology engages the non-linear force of a gas spring to create an easily adjustable counterbalance, enabling balanced heave compensation. Numerical and scale models have demonstrated the energy efficiency of luffing can be increased to more than 90%. A full-scale prototype of the S-type was funded by a subsidy of the Dutch Ministry of Economic Affairs. While primarily targeting the crew change market, the offshore wind market will also hold opportunity for this new generation of gangway, due to the reduction in power requirements and weight. Ampelmann’s commercial manager Wiebe Jan Emsbroek said “The crew change market requires a lightweight transfer system that enables a safe and cost-effective alternative to other crew change methods, such as helicopters. “Integrating balanced heave compensation technology into the S-type will offer a huge energy saving of up to 50% compared to our current gangways. It utilises electric actuators as opposed to conventional hydraulics, which results in significantly reduced fuel consumption for the vessel and significant overall project cost savings.” Production is due to start on the S-type in early 2018. In total, claims Ampelmann, the cost of operators using the system on a crewboat will be around 30% cheaper than helicopters. Ampelmann has also enhanced its existing E1000 gangway to speed up conversion from personnel to cargo mode from around 10 minutes to less than one minute. As with a number of personnel transfer systems, the E1000 can transform from a gangway into a crane boom. It is 30 m in length and is capable of transferring people and up to 1,000 kg of cargo in wave heights up to 4.5 m.
Ampelmann has enhanced the E1000 gangway to speed up conversion from personnel to cargo mode
Van Aalst Group in Dordrecht says its 28 m long ‘Seagull’ access system is able to compensate for vessel movement in a significant wave height of up to 3.5 m when installed on a typical 75 m long supply vessel. The company claims that this results in an operating window that is “significantly higher” than other available systems in the market. The first SafeWay gangway is currently installed on the 95 m offshore construction vessel Olympic Intervention IV. The dynamic positioning class 2 vessel has been providing accommodation and work space for up to 100 offshore workers having been chartered by Adwen for maintenance activity on three windfarms in the German sector of the North Sea. “Under sometimes challenging weather conditions, with significant wave heights exceeding 2.8 m, 851 transfers have been carried out after a total of 173 landings on a turbine,” said the company. The unit also carried out an additional 301 cargo transfers. The gangway incorporates a
Offshore Wind Journal | 4th Quarter 2017
compensated lifting capability with a separate winch to transfer loads of up to 400 kg. Adwen site manager Ralf Schuckert, said the company had experience with other offshore access systems but believes that the Seagull has some advantages compared
to others, not least its ability to lift loads 10 m vertically and its ability to ‘hover’ above the target to which personnel and equipment are being transferred. “Not only does the vessel get more freedom in heading, it also gives the access system greater workability compared to other systems,” he said. Step-less 10 m height adjustment, enabling the access system to maintain a nearly horizontal position in all conditions, means offshore workers don’t have to walk up or down an inclined system. The master of Olympic Intervention IV, Endre Stakvik, said “I have never worked with a walk-to-work system that can be lifted vertically. It was amazing to witness the speed of personnel and cargo transfers.” Another well-known manufacturer, Uptime in Norway, says its 23.4m active motion compensated gangway has achieved TRL 7, Statoil’s highest technology readiness level. During the approval process, the gangway was mounted on Island Offshore’s vessel Island Crown during a walk-to-work charter for Statoil.
SMST ACCESS AND CARGO TOWER FOR ESVAGT SOV SMST in The Netherlands has been awarded a contract for the delivery of an access and cargo tower for Esvagt’s new service operation vessel. The vessel is being built by Astilleros Zamakona in Spain and will work on the Deutsche Bucht offshore windfarm under contract to MHI Vestas. The access and cargo tower combines a gangway and elevator for personnel and cargo. The equipment will enable safe, stepless transfer of personnel and cargo from the vessel to wind turbines in up a significant wave height of 3 m Hs. A landing height-adjustable trolley at the heart of the system will enable personnel and cargo to access wind turbines from different deck levels on the vessel up to a height of 23 m. SMST has also been contracted to supply remote controlled cargo transporters that can transport 400 kg of cargo from below deck to offshore structures. A 3 tonne active heave-compensated offshore knuckleboom will be installed atop the tower that will be capable handling wind turbine components. OWJ
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36 | OPERATIONS & MAINTENANCE
Growth and integration key to survival As Philip Woodcock* explains, there is a growing need to reduce O&M costs on offshore windfarms, but a consensus has yet to be reached on how best to do so
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ver the last 12 months, the offshore wind industry has basked in the warm glow of public approval as the level of subsidy required for new projects has fallen steeply and zero-subsidy contracts have been achieved As the winners are all experienced industry players with shareholders to answer to, they will undoubtedly have developed strategies for making money in this new normal. Larger and larger turbines have been identified as the most important driver of cost reduction, but cost reduction in operations and maintenance (O&M) will also be paramount and have a fundamental impact on the supply chain. The concept of servicing or inspection, maintenance and repair (IMR) of balance of plant covers everything outside the nacelle of a turbine, but the market for this kind of work is extremely fragmented, with service providers ranging from subject specialist
companies in blade repair and thickness measurements through to general project management companies who subcontract in all of the services needed to complete a work scope. Some windfarm operators maintain balance of plant themselves and contract in any expertise they do not have inhouse; others give all the work out in the form of large service contracts. However, to date, the parties that have won large-scope balance of plant maintenance contracts do not have all required specialities inhouse themselves and have to subcontract packages out to specialist companies. Undoubtedly, the need to reduce O&M costs will force windfarm operators to look closely at their balance of plant service strategies in the coming years. The scope of a large maintenance contract could include marine logistics, foundation inspection, infield and export cables and scour protection of cables
Maintaining the balance of plant on a windfarm demands a wide range of expertise, from blade repair to project management
and foundations. It could also include IMR of the blades themselves. Other large maintenance contracts include the operation, maintenance and monitoring of offshore transformer and substations or operations and IMR of wind turbine generators and associated equipment. The latter require much higher levels of proprietary technical knowledge and are often limited to the original equipment manufacturers (OEMs), at least for the initial warranty periods. The Gemini offshore windfarm offshore the Netherlands is an example where the balance of plant and transformer station IMR work was contracted out to commercial third parties Offshore & Wind Assistance (OWA) and EWE Offshore Service & Solutions (EWE-OSS). The effect of cost control on the balance of plant service sector has yet to be determined and has those in the sector wondering what the outcome will be. There is no clear path, and a variety of different scenarios will evolve, depending on the inhouse capabilities and ownership structures of the windfarms. The larger, integrated windfarm operators such as Ă˜rsted (formerly Dong Energy) or Statoil may wish to leverage costs they have already sunk in a project in inhouse service
OPERATIONS & MAINTENANCE | 37
for balance of plant service providers ability and eliminate the middle men; non-operating owners such as Blackrock or Northland Power may look to further delegate responsibility through large service contracts. The latter approach would encourage consolidation and integration, with a few large multiskilled service providers emerging with the financial capability to assume the liability of lump sum contracting. The third option is to maintain the status quo of ‘divide and conquer’, where windfarm operators contract a large number of small parties and use the power of ‘survival of the fittest’ to drive down costs. Recent conversations with one windfarm operator indicated a frustration with the balance of plant service arrangements in place, as their service provider subcontracted another company to execute part of the scope and placed a significant margin on top. The operator stated that, in future, he would bring this responsibility inhouse and either execute the work with his own team or do the subcontracting himself. Large operators such as Orsted always maintain a large operations team on each windfarm combined with significant back office engineering and contracting resources, so it is logical that they will further leverage this overhead by bringing more and more of the scope inhouse. Any skills gap, such as subsea services, can easily be sourced via their contracting teams, which allows them to manage this kind of work directly, without intermediaries. One strategy for institutional investors in new projects or existing windfarms will be to keep operational overheads and liabilities low by awarding large contracts protected by performance guarantees. However, recent examples of the award of large balance of plant contracts demonstrates that the winners, such as OWA or Deutsche Windtechnik, are not able to provide all of the services inhouse and act more as project managers. For windfarm operators to properly de-risk operations and reduce costs, balance of plant maintenance companies will need to be able to provide fully integrated services and have sufficient
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New ways of working – and new technology, such as drones – could have an important role to play maintaining and inspecting offshore windfarms
capability to make margins worthwhile. To provide integrated services and have the financial clout to take on large lump-sum contracts, there will have to be consolidation in the market. Early signs of consolidation are there, with James Fisher’s acquisition of increased diving and blade inspection capability from Hughes Sub-Sea Engineering and ROTOS360. Other examples include Global Marine’s bid to improve on recent under performance of large assets by combining them with the service engineers, small vessel logistics and contacts of CWind, and EDF Energies Nouvelles’ acquisition of German service provider Offshore Wind Solutions and its existing contracts on the Bard Offshore 1 windfarm. The status quo could also form part of the strategy going forward. From a supplier’s perspective, it seems logical to consolidate into larger, more capable companies, but this is not a phenomenon witnessed in the service side of the windfarm industry. Whether it is a conscious tactic or an unintended positive outcome, the divide and conquer method of supporting fragmentation over consolidation has ensured that the balance of control remains with the windfarm operator. As the majority of
service providers are small enterprises, it is easy to apply pressure to force down prices. The crew transfer vessel segment is a prime example of this, where the number of owners has increased almost at the same pace as the number of vessels but rates and terms and conditions have deteriorated. The failure of the fleet of Turbine Transfers to be sold ‘en bloc’ is a clear example of the market’s reluctance to consolidate. As windfarm operators strive to find new models in a world of significantly reduced or zero subsidies, they will be looking at every aspect of their supply chain to de-risk and reduce cost. No matter what tactics windfarm operators use, it will be wise for balance of plant service providers to explore the ability to provide integrated services and to assume lump-sum risk in an effort to defend market position and margins. By increasing the scope of their services and financial strength, integrated service providers should be able to secure larger contracts from operators who want to derisk projects. If large windfarm operators bring everything inhouse, suppliers will not be able to compete. OWJ *Philip Woodcock, general manager, Workships Contractors
Offshore Wind Journal | 4th Quarter 2017
Annual Offshore Support Journal
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BEST OF THE WEB | 39
BEST OF THE WEB
owjonline.com
Offshore Wind Journal’s website covers the latest developments in the offshore wind sectors. Our news coverage is now exclusively online and free to read. Here are some of the most popular stories covered over the last few months
to 80% of offshore wind resources are in deep waters (+60 m), where bottom-fixed installations are not suitable, floating offshore wind is expected to play a significant role in the growth of offshore wind going forward.”
World's first floating offshore windfarm enters operation
A study by researchers at the University of Delaware has concluded that the most costeffective way to build offshore windfarms is to assemble turbines and foundations in port. Working closely with industry partners, University of Delaware (UD) researchers have developed what they claim is a new method for constructing offshore windfarms. They claim that it is less expensive and faster than alternatives, and could make possible offshore wind deployment at a scale and pace that would keep up with the region’s scheduled retirement of nuclear and coal-fired power plants. The researchers calculated that their innovative process will cost up to US$1.6Bn less per project than conventional approaches and take half the time.
Hywind Scotland, the world’s first floating offshore windfarm, has started to deliver electricity to the Scottish grid, having been formally opened by the First Minister of Scotland, Nicola Sturgeon. The 30 MW windfarm, operated by Statoil in partnership with Masdar, is 25 km offshore Peterhead in Aberdeenshire, Scotland. “Hywind can be used for water depths up to 800 m, thus opening up areas that so far have been inaccessible for offshore wind,” said Statoil’s executive vice president of new energy solutions, Irene Rummelhoff. “Statoil has an ambition to reduce the cost of energy from the Hywind floating windfarm to €40-60/MWh by 2030,” said Ms Rummelhoff. “Knowing that up
http://bit.ly/OWJHywind
Study says port-based construction is best way to industrialise
http://bit.ly/2guIOFb
Hywind Scotland is now feeding power into the grid
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First French floater ready to be towed out to sea The first floating offshore wind turbine to be installed in French waters, Floatgen, has reached a key milestone and is due to enter into operation early in 2018. France’s minister of state for ecological and inclusive transition, Sébastien Lecornu inaugurated the floating offshore wind turbine in Saint-Nazaire on 13 October 2017. Floatgen is one of a growing number of demonstration projects for floating offshore wind. Its main objectives are to prove the technical, economic and environmental feasibility of floating foundations in deepwater. The Floatgen floating offshore wind turbine is due to be installed for two years, 20 km off Le Croisic. Energy produced by the 2 MW Vestas wind turbine will be injected into the French electrical network. The floating foundation for the turbine was developed by IDEOL using its concrete ‘damping pool’-type unit. http://bit.ly/2ykfHez
PPA's have potential aplenty if opportunity can be unlocked Renewable energy bodies including Wind Europe say the EU’s Clean Energy Package could herald steep growth in demand for green power in the private sector. The private sector accounts for around half of Europe’s electricity consumption, and providing corporate consumers with renewable energy could deliver a massive reduction in CO2 emissions, according to Wind Europe. It could also save businesses money and make it easier for people to invest in renewables. The volume of corporate renewable Power Purchase Agreements (PPAs) – which allow companies to purchase renewable energy directly from an energy generator – almost tripled in Europe in 2016, with over 1 GW of capacity contracted. http://bit.ly/2zAT2IU
Offshore Wind Journal | 4th Quarter 2017
40 | PROFILE
AUSSIE WINDFARM PLAN HAS PLENTY TO RECOMMEND IT
A Andy Evans: “Star of the South would have numerous potential benefits from state of Victoria”
lawyer for 20 years, Andy Evans, managing director of Offshore Energy in Australia, first worked on renewable energy projects in 2006. The company was established in 2012 to investigate and develop potential offshore renewable energy projects off the coast of Australia, the most important example of which currently is the Star of the South offshore windfarm off the coast of Gippsland in the state of Victoria. A preliminary planning and environmental study has already been undertaken by WSP/Parsons Brinckerhoff, and the company is currently in what it anticipates will be a three-year feasibility study phase. If that goes according to plan, Offshore Energy could start the first phase of the proposed 2 GW project in or around 2022. Speaking exclusively to OWJ, Mr Evans said the Star of the South project could have an investment value of approximately A$8Bn (US$6.2Bn), including potentially half local content, and generate approximately 12,000 direct and indirect jobs during the construction phase and 300 ongoing jobs. Another important advantage of the plan is that the windfarm would connect to existing infrastructure in the Latrobe Valley. If built, it will be connected via 95 km of subsea and underground high voltage transmission cables (four cables each of 500 MW capacity) to a connection point on the Victorian grid. At the moment, the plan is that the windfarm will use around 250 turbines, each of 8 MW, but with ever-larger turbines being developed, the capacity of the turbines – and ultimately of the windfarm – could increase by the time it is actually built. Mr Evans said 12 MW turbines might well be available by the time an investment decision is made. Building and connecting the offshore windfarm would require the upgrade and expansion of existing nearby port facilities to enable construction and operation and maintenance operations and construction of at
Offshore Wind Journal | 4th Quarter 2017
least two offshore substations and a network of cables to connect the turbines. “We anticipate that we can deliver approximately 8,000 GWh of electricity per year, which is approximately 18% of Victoria’s power usage,” he told OWJ, noting that, although turbines would almost certainly be imported and installed by international vessel owners, there was every reason to think that foundations could be manufactured locally. “We have a string of steel works in the area,” he noted. There is extensive Australian oil and gas infrastructure and expertise on which to draw in the Bass Strait. The project, which Mr Evans anticipates would be built in phases, probably in the order of 500 MW each or maybe a little more in the first phase, would not be eligible for subsidies of the type that helped kick-start the offshore wind energy industry in Europe, but he is confident that, even on current cost, offshore wind provides a new and exciting option for Australia’s energy capacity and security. “We expect technology and installation costs to continue to come down,” he said. Offshore Energy has held discussions with local and international investors with experience in offshore wind development, and Mr Evans believes that the project has the potential to play a major role in transitioning the Gippsland economy, place downward pressure on wholesale electricity prices and improve power system security and reliability. “Our project provides an opportunity for Australia to meet a number of energy security, economic and environmental objectives and, importantly, creates large and sustainable opportunities for the local community,” he explained. “It’s been really well received by the financial sector in Europe.” Looking further ahead, Mr Evans said there are three or four other sites offshore Victoria that could well host offshore windfarms, although the Star of the Southy is “by far the best of them.” OWJ
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