The development of new renewable power generation capacity worldwide may be slowed by the Covid-19 crisis, at least in the short term. Despite that, offshore wind energy is set to be one of the more resilient sectors and is poised for further strong growth. 

Siemens has expanded its presence in the North Sea offshore Siemens wind energy sector.

International wind energy organisations are pushing the idea that global efforts to reboot general economic growth following the pandemic should include substantial additional investment in the renewable energy industry as a whole, and offshore capacity in particular.

The Global Wind Energy Council (GWEC), for example, has called on governments, intergovernmental bodies and lending institutions to “put wind energy investment at the centre of their economic recovery and growth plans.” Senior executives with major multinational logistics service providers active in the offshore wind sector generally appear to believe that will be the case.

“We see green energy, including offshore wind, being high up the list of sectors targeted for investment by many governments around the world, both in the short to medium term to boost economic recovery from the effects of Covid-19 and in the longer-term,” commented Brian Sørensen, head of business development port service and wind logistics, Esbjerg, for global project forwarder Blue Water Shipping.

Christian Hoffmann, head of marketing and corporate communications for ocean carrier SAL Heavy Lift, voiced a similar view. “When there is more public spending I am pretty sure offshore wind will be one of the beneficiaries of that.”

Francisco Rodrigues, global segment lead – offshore wind for heavy lift services provider Mammoet, suggested that in the light of the future decarbonisation plans already published in many countries and the immediate impact of Covid-19 on oil and gas projects, “it is expected that renewables, including offshore wind, will continue to prosper and even move to new areas globally.”

Expanding market

“Offshore wind is becoming an increasingly interesting energy resource for all countries, even those with deeper water, which will soon be able to leverage floating offshore wind technology developments. That will allow governments to utilise more local content requirements and so create new jobs,” he added.

As far as the immediate impact of Covid19 on offshore wind industry activity is concerned, views are more varied. Some sources report there has been some disruption while others say the previous pace of development has continued more or less unabated.

GWEC, for example, stated earlier this year that while an additional 50 GW of new offshore wind capacity could be installed worldwide by 2024, “as projects in emerging markets with ambitious targets for offshore wind such as the USA, Taiwan, Japan, Vietnam and South Korea are realised”, such forecasts will “undoubtedly be impacted by the ongoing Covid-19 pandemic, due to disruptions to global supply chains and project execution in 2020.”

Similarly, Lailah Soon, regional business development manager – energy (Asia Pacific and Indian Subcontinent region) for global integrated shipping and logistics services provider GAC, suggested lockdowns around the world had affected an industry “which is dependent on many raw materials, equipment and components that are sourced from different countries.”

“Manufacturing operations, project execution and other commercial activities have also been affected in a similar manner by the movement restrictions, safe distancing and other measures to curb the spread of the pandemic,” she added.

Pandemic effects

However, a renewable energy market update published recently by the International Energy Agency (IEA) provided a revised outlook for the overall global renewable power industry through 2020/2021. It said the impact of Covid-19 on offshore wind deployment in that period remains limited.

“Offshore projects have longer construction periods than onshore projects. Most projects in our forecast for 2020 and 2021 are either partially commissioned or at an advanced stage of development, particularly in Europe, which is the largest offshore market,” stated the IEA.

SAL Heavy Lift is involved in two segments of offshore wind industry logistics – the transportation of large foundation components, notably monopiles and transition pieces, and sub-contracted installation work. Hoffmann reported: “To date, we have not seen any negative impact on offshore wind sector activity resulting from Covid-19… In fact, we are currently seeing a lot of enquiries coming in from the industry regarding logistics services to support projects, so business levels still seem to be steaming ahead untouched by the whole pandemic scene. Many of the manufacturers and contractors in this sector currently have pretty full orderbooks which they need to execute.”

Mammoet’s Rodrigues made similar observations. The company’s activities in the offshore renewables sector range from helping equipment suppliers through R&D and the design of tools, to the logistics associated with the transport and load out of

foundations, pre-assembly of turbines and the installation of topsides and substations.

“The industry is continuing to deliver projects as per its plans for the current year and we believe that future projects will also be executed as planned,” he commented.

“Production in factories has not suffered drastically, which shows the commitment and confidence offshore wind inspires. Power generation is expected at the levels planned across the sector, so deadlines will therefore put us all under pressure to deliver the anticipated numbers and continue to push the industry forward.”

Ports handling offshore wind turbine components report that Covid-19 has, to date, not seriously affected volumes of offshore wind energy components.

That is the case at Bilbao on Spain’s Atlantic coast, for example, whose activities include the handling of components and serving as a manufacturing location for turbine equipment suppliers like Haizea Wind, Lointek and Navacel.

We are currently seeing a lot of enquiries coming in from the industry regarding logistics services… so business levels still seem to be steaming ahead untouched by the whole pandemic scene. – Christian Hoffmann, SAL Heavy Lift

‘No slowdown’

“Between January and May this year, 75,700 tonnes of wind power components were loaded in the port, 23 percent more than in the same period last year,” commented a spokesperson for the port authority.

“Therefore, there is no evidence of Covid-19 having negative consequences on that traffic.” However, “the agreements and orders relating to that business are made well in advance so there is no guarantee that the pandemic will not impact those projects in the long run”, the spokesperson added.

Ole Haugsted Jørgensen, sales manager for Lindø port of Odense in Denmark, whose current involvement in the sector includes the support of nacelle production for MHI Vestas Offshore Wind and the foundation production for Bladt Industries, was also positive about the current picture.

“We have not experienced any negative effect of Covid-19 on our offshore wind activities. All production on our Lindø site has continued without major problems,” he said.

Similar optimism was expressed by Roland Schneider, head of sales and business development at Cuxport, a multipurpose terminal operator in the German North Sea port of Cuxhaven that provides logistics facilities and services to the offshore wind power industry.

“So far this year, we have not seen any manufacturing shutdowns or disruptions to supply chains in the offshore wind sector,” he commented.

“Looking ahead, we are encouraged by the German government’s recently announced aim to increase the country’s offshore wind power capacity five-fold by 2040 to 40 GW, up from about 7.5 GW at present. It has also raised the target for 2030 from 15 GW to 20 GW.”

That last point was also cited as an example of the potential for further substantial offshore wind industry development over the next decade by Thore Schreiber, head of business development and sales for Rhenus Offshore Logistics, an international provider of logistics solutions for offshore wind farm/platform projects based in Bremen, Germany.

“In addition to the increase in offshore wind developments through to 2030 very recently communicated by Germany, Norway has released a significant volume of additional offshore wind projects to be built in the coming years,” he reported.

“More generally, we do not foresee a reduced availability of finance for offshore wind projects. In fact, from a private investment perspective, we even see a chance of increased availability of finance as the overall renewables industry has proved to be very stable and unaffected by the Covid-19 pandemic.”

Port investment

The general optimism that offshore wind will continue to be a growth market over the next few years and beyond is reflected in continuing port industry investment in facilities to service this sector (a more detailed report on some of the latest such developments will appear in a ports and terminals supplement to be published in the October/November issue of HLPFI).

Lindø port of Odense, for instance, is currently undertaking a 400,000 sq m expansion of terminal facilities for handling offshore wind activities. Due for completion by the end of this year, it will boost the port’s total site area to 3.9 million sq m.

Another example is Brest in Brittany, northwest France, which is constructing a large new marine renewable energy terminal to handle offshore turbine components – features include 400 m of quay and 40 ha of industrial land, primarily to service the fabrication of jackets for fixed offshore turbines.

In that context, Iberdrola made a final investment decision on its new 62-turbine, 496 MW capacity offshore wind farm being constructed off the coast of Brittany in Saint-Brieuc bay, due to become operational in 2023. More than half the jacket foundations will be assembled in Brest. The port is also expected to handle some of the logistics and transportation of components to the wind farm site.

Individual port terminal operators are also investing in new offshore wind facilities. In Germany, for instance, Cuxport has developed an 85,000 sq m storage area that provides 290 m of quay length with 15 m draught where jack-up vessels can jack up without any further seabed preparations.

When asked which parts of the world might see the most new offshore wind power activity over the next few years, SAL Heavy Lift’s Hoffmann suggested that while Northern Europe had already seen a lot of projects, the recent announcement by Germany could signal further major development in that region.

“The pace of offshore wind capacity expansion also seems to be picking up in certain other parts of the world. The US East Coast is interesting, with some big projects going on, while in Asia, Taiwan is currently a hot market and Japan will probably become the same in two or three years’ time,” he commented.

Hoffmann pointed to test piling work that SAL Heavy Lift undertook last year for Taiwan’s Greater Changhua offshore wind farm development.

So far this year, we have not seen any manufacturing shutdowns or disruptions to supply chains in the offshore wind sector. – Roland Schneider, Cuxport

Huge potential

Soon of GAC is also cited Asia as a market of “huge potential” and the company is currently looking to transfer its extensive experience in the UK offshore wind sector to that region.

“Offshore wind development in Asia has so far been slow compared with that in Europe, due to technological, cost and grid availability challenges,” she commented. “However, we are now seeing growing interest in the development of offshore wind projects in that region, particularly in China, Japan, South Korea, Taiwan, India, Indonesia and Vietnam.”

Blue Water Shipping has worked on some 35 offshore wind power projects off the coast of northern Continental Europe and the UK over the last 20 years. While maintaining its foothold in that market, the company is now developing its involvement with projects in other parts of the world, notably the USA.

This year, for example, Blue Water has already handled offshore wind turbine components for Siemens Gamesa Renewable Energy in the port of Esbjerg destined for new installations in both regions – specifically Borssele wind farm 1 and 2 off the coast of the Dutch province of Zeeland and Coastal Virginia Offshore Wind off the coast of Virginia Beach on the US East Coast.

This article has been taken from the August/September 2020 edition of HLPFI.