Clarksons Renewables Offshore Wind Project and Vessel Newsletter

RECENT EVENTS

PTMEW Offshore Wind – Logistics & Supplies conference in Gdynia Poland

Gabriel Andersen participated from Clarksons Renewables presenting Clarksons view on the C/SOV market. The conference was well attended by all the major developers and joint ventures active in Poland. On technical side of things discussions revolved around the required supply chain for achieving the political targets for the Baltic Sea – here the supply chain definition covers anything from technicians and fabrication to ports and vessels. The conference also touched upon Power to X (P2X) potential in the Baltic Sea and the various technologies for green vessels and whether they would be relevant in the construction and O&M phase, respectively. Clarksons is currently seeing high and increasing interest from developers on the topic. On the development side of things, the topics were the status of the round 1 projects, the upcoming decision on round 2 seabed permits and even a potential round 3! As for the (not yet planned) round 3 many participants pointed out the large potential for floating wind in the Baltic Sea.

Global Offshore Wind Awards 2022

Mikkel Nielsen also attended the first?Global Offshore Wind Awards 2022. It was great to see the Godfather of Wind, Benj Sykes, which got a price for his exceptional service for offshore wind. MJR also won the “Supply Chain Innovation” category for their offshore charging system.

WEEK 43 IN A REVIEW

Referencing our “Wind Support Vessel Market update” (available for clients), covering CSOV/CTV activities in Q3 2022, the installation season has started to taper off. Rates for CSOVs have come down since the peak in the summer season, in line with trends overserved other years. The number of outstanding requirements is starting to increase, as charterers are starting to tender for the 2023 season, as well as longer term planning. Rates for IMR/subsea vessels (Tier 3) have yet to come down following the substantial increase during the summer, and with an improved oil&gas / subsea IRM market, rates are not expected to fall. We are increasingly seeing Tier 3 vessels fixed on longer term contracts in the offshore oil & gas market. With limited availability/deliveries of Tier 1 ships in 2023, the market is expected to be tight for the coming 2023 season. Rates for longer term SOV contracts, are still increasing in line with higher newbuildings and financing costs.

Newbuilding prices are still trending up, with prices increasing in all regions, due to high activity level at shipyards, as well inflationary environment especially for key equipment. S&P activity, as always dominated by Subsea IMR ships, is also increasing. Prices have come substantially up, and is expected to remain elevated, as most “forced sellers” have now been taken out.

Same trends are observed in the CTV market. The European market has been very busy in the spring/summer season with mostly all CTVs being on charter throughout the summer. When a CTV came off a charter, it typically went on a new contract right away. Demand is especially high for 24 Pax CTVs, also for requirements with no need for more than 12 Passengers. We have oberserved high dayrates in the spot market, with rates peaking above EUR 5,000 for 24 Pax CTVs, basis 24/7 operations. There is also high level of activity in the US, however more focused on medium to long term charters, for both construction support and O&M phase. Due to limited local supply, most contracts are linked to a newbuilding order.

Sector consolidation is still a major topic in the CTV market, and due to the wide spread of owners, we expect more to come. Several CTV companies are still marketed for sale / looking for new owners. During this quarter, Manor Renewable Energy acquired OPUS Marine, and Purus Marine acquired HST. S&P values for CTVs have keep flat over the quarter, while Newbuilding prices have come up for CTVs, in line with other vessels segments in the offshore wind industry.

OFFSHORE RENEWABLES NEWS

GC Rieber Shipping announced end of week that the company has ordered 2 x SOVs at Cemre Shipyard in Turkey. The first two vessels will be delivered in Q1 2025, and includes options for further two units. The vessels, called "WindKeeper", is built on a Swath design technology, and is expected to offer lower emissions, according to the company. The vessels will be 100% owned by GC Rieber.

Edda Wind?has taken delivery of the Edda Brint, a newbuild service operation vessel (SOV) designed to operate on hydrogen that is ‘zero-emissions’ ready. Edda Brint?will have its motion-compensated gangway installed, and then start a 15-year contract with Vestas at the Seagreen offshore windfarm in Scotland in January 2023.?The vessel is prepared for zero-emission operation using hydrogen as a fuel for fuel cells with the hydrogen stored in a liquid organic hydrogen carrier (LOHC).?Edda Brint?is a Salt 0358 design. The vessel is 82.9 m long with a beam of 18.6 m and can accommodate up to 60 people in high standard cabins

Van Oord’s?new cable-laying vessel?Calypso?is on its way to the?Vard Brattvaag?yard in Norway for the construction process to be completed. The vessel was launched at?Vard Tulcea?shipyard in Romania last week. The vessels will be delivered end of 2023, in time for a very busy 2024 cable lay market.?Calypso?will mainly be used to install inter-array grid and export cables for offshore wind projects, including high-voltage direct current (HVDC) cables. The cable-lay vessel will be able to operate?on biofuel and e-fuels once they are available.

Following the award of a long term contract for one of its F-Class vessels two weeks ago, the company has secured an LOI for a long term contract with a bluechip customer for one of the O-Class vessels. The vessel will be used for work in Northern European and US waters. The start-up date of the contract will occur after the completion of the crane upgrade, which will increase lifting capacity to 1,600 metric tons at a radius of 40 meters and increase hook height to 160 meters above the main deck. The crane upgrades are expected to be completed by early 2024. The contract could potentially involve an O&M scope, for a leading OEM/developer, in our view. Longer term contracts, which has been rare in the WTIV market to date, are in our view needed to stimulate shipowners to order these high capex vessels.

The UK government has announced the draft timeline for the latest Contract for Difference (CfD) auction in offshore wind, where renewable energy developers may bid for 15-year government-guaranteed CfDs. The structure of the auction will be announced in December, while the application window for developers will formally open in March 2023 and is expected to close in April 2023. Under the shortest timeline scenario, the actual auctions may begin as soon as June 2023. The UK is one of the world's largest markets for offshore wind, with around 13 GW of connected capacity across 44 sites and a target of 50 GW by 2030.

Avangrid has postponed construction for Park City Wind and Commonwealth Wind. The company is citing lack of supply chain and inflation for the delay as key factors for the delays.

SeaRenergy is building its position in the substation installation support market, by securing logistics contract for the DolWin 6 converter platform.

Contacts

Research

Jens Egenberg?+47 92 02 01 70

Erik T?nne +47 95 75 01 77

Oslo

Frederik Colban-Andersen?+47 91 82 28 04

Anders C. Hagen?+47 91 80 07 61

Vegard Volls?ter?+47 92 68 48 55

Espen Bj?rnson?+47 90 94 44 39

Hamburg

Rouven C. Willner?+49 174 933 0093

Tim?B?rner?+49 173 631 4996

Henning Leverkus +49 172 589 3520

David Matthews?+44 790 095 6539

Sina Ingber +49 162 213 2764

Aarhus

Gabriel Andersen?+45 81 95 95 43

London

Neil Buchan +44 77 7139 5479

Mikkel Nielsen?+44?77 4704 3014

Aberdeen

James Braid +44 780 840 3790

Olivier Candeel?+44 788 422 5030

Oliver Thompson +44 122 425 9621

Chris Tweedie?+44 773 606 6412

Houston

Jack Fitzgerald?+1 713 235 7469

Shanghai

Jack Qiu: +86 13 8117 88836

Singapore

Tilly Manley: +65 9665 1034