According to a new report from IHS Markit’s Clean Energy Technology service, rapid advances in offshore wind technology, making turbines bigger and more powerful, are currently outpacing the infrastructure capacity needed to install them.
The Offshore Wind Turbine Installation Vessels market report projects offshore wind annual gross capacity additions to grow sixfold by 2030 due to dramatic cost reductions, advances in technology, favourable policies, and ever-increasing national targets. However, the industry needs to rapidly develop and invest in new infrastructure to achieve these ambitious plans, the report says. Most critically, the current offshore wind turbine installation vessel (WTIV) fleet is unable to install the new larger 15+ MW turbines that will be hitting the market in the next three years.
“Offshore wind turbines are constantly getting bigger and more powerful, reducing costs, improving competitiveness, and opening new markets. However, that presents a new challenge. As new developments are moving further offshore and into deeper waters, logistics, transit, and installation become more complex and require larger specialised self-propelled jack-up vessels with technical capabilities far beyond the existing fleet,” said Andrei Utkin, principal analyst, Clean Energy Technology at IHS Markit.
The geographical distribution of the global WTIV fleet, currently comprising around 50 vessels with two-thirds located off China (the Chinese WTIV fleet serves the local market only and does not operate overseas so has been excluded from this global supply-demand analysis) and most of the rest in Northern Europe, presents a further immediate challenge to offshore wind targets. The Chinese fleet does not operate internationally, at least at this point and much of the remaining global fleet is concentrated around and busy working in the North Sea, requiring significant time and expense to travel for installations elsewhere. Countries outside these regions will therefore face significant roadblocks to expanding offshore wind capacity unless new vessels for other regional markets are rapidly built.
The US has targeted a particularly ambitious offshore wind goal of 30 GW by 2030, but despite the restrictive terms of the Jones Act, the only US–built and flagged WTIV is not set to enter service until 2023. In order to hit its target, the country must either relax its maritime rules to permit foreign-built vessels to operate or ensure new heavy-weight vessels are built and put into service promptly.
Meanwhile, IHS Markit projects that the industry will need to invest a minimum of US$1.2 – 2 billion to build at least four new vessels to meet global demand from 2026, outside of China. Depending on where these vessels are built, the total cost maybe significantly higher if local content requirements are taken into consideration, particularly in the emerging offshore wind markets of the US and the Asia Pacific.
While seven companies have announced the intention to build up to 16 new vessels, these are not firm contracts and final investments have yet to be secured. One reason for the lack of investment in new build turbine installation vessels in the past was concerns over the longevity of the vessels as turbine technology was developing rapidly,” says Utkin. However, conditions for investment are improving as turbine sizes stabilise and the technical capabilities for installing them become increasingly standardised.