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Live from SMM Hamburg

Rapid growth of offshore wind sector creates issues for installation vessel owners

Rapid growth of offshore wind sector creates issues for installation vessel owners
Offshore wind power has the potential to supply clean, affordable energy and has a role to play in solving energy security issues, but its rapid development is causing challenges for those who have invested in installation vessels.

"As we know, and the Ukraine crisis is showing too clearly, oil and gas will continue to play important roles as both as fuels and raw materials in the coming decades," parliamentary state secretary Uwe Beckemeyer stated in his opening address at SMM's offshore dialogue in Hamburg today.

"In terms of renewable energy, the focus is increasingly on offshore wind power in Germany, and I also think, worldwide." explained Beckemeyer, adding that the German government has placed offshore wind at the centre of its renewable energy plan.

Forecasting the future costs of energy, Jan Rabe, head of strategy at Siemens Energy Sectors showed a strong argument for offshore wind. In Siemens' view, offshore wind has the potential to offer a cheaper overall cost of energy compared to fossil fuels and solar power, especially when factors such as environmental impact, land useage, geopolitical risk and social impacts such as job creation are taken into account.

Hans Schneider, coo, A2Sea outlined some of the operational challenges faced by the companies turbines and support structures for offshore wind parks. The rapid growth of rotors, from 25 m in length in 1990, through to current units due for installation in 2015 at 165 m, and the very real potential for 200 m rotors by 2020 makes it difficult to future-proof installation equipment.

The consequence for A2Sea is the difficult task of supplying installation ships to meet demand. Even their two year old vessel Sea Challenger is facing challenges. "We are already running out of space, we are running out of capacity. We have to be ingenuitive to find solutions to carry next generation turbines. People who are used to working in the maritime industry understand that to handle assets you have a depreciation period between 15 and 30 years. When you have an asset running out of capacity at two years old you have a challenge, and the industry has a challenge," said Schneider.

Building the next generation of installation vessels will depend on a sufficient pipeline of work for the ships to help convince investors of the value of constructing the asset, and in turn those projects will rely on clear future energy plans from governments.

Looking ahead to 2015 Schneider believes that there will be sufficient work for the larger established companies such as A2Sea, which has a 50% market share, but a dip in in the number of projects under construction could place pressure on smaller operators. That contraction, he proposed, could lead to consolidation within the offshore wind installation market, but whether that would take the form of smaller firms merging, large firms acquiring competitors or companies simply going out of business he would not predict.