NMI 2009 – Volume 14

Will offshore wind farms offer a new market?

The bleak prospects for the future of Norwegian shipbuilding industry, with almost empty order books after 2012, have raised the question of how the industry can pursue new opportunities and identify possible new markets. Or would it be more relevant to strengthen the belief in the reviving of old markets, like coastal fishing vessels, ferries, short sea vessels and offshore vessels.

Eigthy-eight huge wind turbins are to be installed on Sheringham Shoal, UK / Photo:Statoil

More than 80 per cent of the output from Norwegian yards the last couple of years has been for the offshore oil and gas market, indeed an indication of the industry’s ability to specialize and be competitive in one specific segment. The future of this particular market is of course dependent on the future oil price and subsequent the major oil operators willingness to make further investments in exploration, development and production. Regardless of this, existing offshore infrastructure and operations will prevail for many years. Consequently there will be need for regular renewal of the complete offshore fleet for many years.
The ferry market is another, though limited source of employment for at least a few yards. Norway is the kingdom of ferries, with more than 2000 permanently inhabited islands and countless coast side mainland settlements lacking roads. In 2008 there were 127 ferry connections in Norway, trafficked by about 150 ferries making 1.6 million sailings. The majority of these 150 ferries are old with an imminent need for replacement. Norwegian yards having specialized in the building of ferries could be in a good position to catch the bulk of the contracts that shortly will emerge, although the competition from foreign yards is tough.
Coastal fishing vessels is another segment that will have to pick up in the coming years, if the fishing fleet is to maintain it’s standard. But again this is a very limited sector and a limited number of yards.

SignifiCat – a special designed service vessel for offshore wind turbines. Designer Ola Lilloe-Olsen, building yard: Målæy Verft AS.

So what with the new offshore industry – wind farms? Can this industry come to the rescue of the ailing Norwegian yards?
The offshore wind energy sector is a brand new industry with a tremendous growth. In Europe it has virtually exploded the last couple of years. Only in 2009 the growth was 54 per cent. Europe has now 828 operating wind turbines offshore in total.
Figures from the European Wind Energy Association (EWEA) reveal that the sector is growing rapidly, with 577 megawatts (MW) of development in 2009, up from 373MW the previous 12 months.
In 2009, eight new offshore wind farms were constructed, while ten schemes are expected to reach completion in 2010, adding 1,000MW to the network, a 75 per cent increase on 2009.
Building work has begun on a total of 17 new offshore wind farms in Europe, which will generate an estimated 3,500MW of energy when completed, with half of the developments based in UK waters. The EWEA recently welcomed an announcement by the British government that it has approved the development of nine offshore wind projects with an overall capacity of more than 32 gigawatts, calling it a “significant step forward” for the industry. The largest one – on Dogger Bank – was awarded to Statoil and Statkraft (and two additional companies).
Outside Europe the development is slower. However, it is anticipated that it will pick up when the technology is fully proven and cost has come down. In U.S. it seems that onshore wind farms are likely to be preferred, because the U.S. has very large onshore areas that are suitable for wind development, and not so much suitable offshore area. Onshore wind farms can provide significant economic development in the form of tax revenue to hard-pressed rural communities and rent payments to farmers. Onshore wind farms can therefore make a significant contribution to reducing and reversing the decline of rural communities that has been seen in the Plains States over the last several decades.
One of the largest offshore areas in the U.S. with shallow water is off Cape Cod, where a major wind farm has been proposed. Much of the rest of the U.S. coastline has at least some potential for wind development, but typically, turbine foundation costs increase rapidly with increasing water depth and wave height. The cost of connecting with utility power lines also increases rapidly as the distance from shore increases.
In general, regardless of geography, there are advantages to siting wind farms further offshore. Wind speeds tend to be higher and the wind is steadier. This means that turbines built further offshore should capture more wind energy. Many hope that the technical challenges will be overcome and that in the future offshore wind farms will be built much further offshore, perhaps even on floating platforms at sea.
Developers intentionally site wind turbines outside of established shipping lanes, thereby avoiding conflicts with routine traffic. Should a ship inadvertently go off course, its radar will readily detect the wind turbines, which are excellent radar reflectors. Wind turbines are also equipped with warning devices to alert ships in foul weather.
So what about the environmental challenges. Could they stop a further development of offshore wind farms, as many environmentalists and fishermen seems to hope? Given the relatively small area of seabed that is required there is no evidence to suggest that total fish catch will decline as a result of wind farm developments; if anything the opposite is true. Fish stocks have been in decline for many years due to overfishing. Many environmental groups believe that wind farms will provide welcome sanctuary for fish spawning as well as refuge from intensive fisheries activity.
The wind industry is working actively with the fishing industry to ensure, as the oil and gas industry has done before it, that the fishing industry is not disadvantaged by the growth of offshore wind farms.
There are three significant stages of a wind farm from the point of view of marine life: construction, operation and decommissioning. Construction and decommissioning have the potential to generate the most amount of disturbance, and the wind industry, as well as several marine conservation groups, is currently investigating these impacts on marine life.
However, it is important that such impacts be considered in the context of other marine activities such as fishing, shipping, oil and gas extraction, etc. Also, it should be noted that the duration of the construction and decommissioning will be about six months only. For the 20-year operational period there are no known impacts on marine life.
It has been suggested that the noise from wind turbines will travel underwater and could disturb sea life. But studies carried out on the impact of noise from existing offshore turbines note that the noise is very low frequency, and many species are actually unable to hear it.
As with any other local impact issues, these concerns will be addressed while a wind farm project is going through the permitting process.
In conclusion – the offshore wind industry has most probably come to stay for many years. And this industry will need service and support, both in the construction, ordinary operations and decommissioning phases. The industry will need purpose built ships for the installation of wind mills, for bringing people back and forth for maintenance purposes, and eventually for taking them down when they have served their time.
Today it is impossible to predict anything that make sense about the scope of this market. But the first shipowning company for this particular purpose has already been established – in 2000 in Denmark.  The company A2Sea of Fredericia has a market share of 60 per cent and has recently been sold to state owned Dong Energy. And the first Norwegian purpose built boat has already been ordered at a yard – Måløy Verft – by Offshore Windservice ApS, a Danish company owned by FOB Shipping of Bergen. The vessel – a semi-submersible catamaran of 26 meter – is designed to ensure a smooth transfer of people from boat to windmill and the other way around, even in 2,5 meters significant wave-height. The vessel will be named «FOB Swath» and able to carry 24 service personnel.
This is just the beginning. A new market is definitely emerging. The decisive question is to what extent the Norwegian shipbuilding industry is able to grasp the possibilities, be innovative and develop new concepts. And bring them to the markets.