Clarksons Renewables Offshore Wind and Vessel Newsletter Week 41

HIGHLIGHTS OF THE WEEK

Industry experts convene at London HQ to address challenges and explore opportunities amid turbulent times by David Matthews, Head of Strategy, Clarksons Offshore

Clarksons Securities, Clarksons Offshore & Renewables, and Green Giraffe Advisory jointly hosted the "Offshore Wind Investment: Mind The Gap" seminar at Clarksons' headquarters in London. The event brought together key stakeholders, including investors, developers, and suppliers, to provide valuable insights into the offshore wind industry's current landscape. Despite the challenges and negative headlines that have clouded the offshore wind industry recently, the seminar provided an encouraging outlook on how investment can help unlock supply/demand bottlenecks, promote innovation, and ensure more realistic electricity prices. The prevailing sentiment among developers, investors, and supply chain stakeholders is one of optimism, with the belief that the current setbacks are temporary and surmountable. Industry veterans recognize that setbacks are not uncommon and have been overcome before. ?

Conclusion: A Bright Future for Offshore Wind

The offshore wind industry stands at a turning point, facing a mix of challenges and opportunities that will shape its future. The good news is that we have clear solutions at our disposal:

1. Streamlined Auctions: To keep the industry efficient, we should maintain Contracts for Difference (CfD) and Feed-in Tariff (FIT) auctions. By refining these mechanisms—removing unnecessary price caps, fully indexing, and speeding up auction-to-construction timelines—we can make them work even better.

2. Long-Term Planning: It's crucial to set out well-defined, long-term plans in all participating countries. These plans, including targets for 2030, 2035, and 2040, capacity allocation, and transparent tender rules, ensure a stable outlook for the offshore wind industry.

3. Boosting the Supply Chain: The supply chain is the backbone of offshore wind. By supporting the financial development of the supply chain, we can relieve margin pressure, attract investment, ensure steady production, and meet project timelines.

4. Cost Stability: Anticipated reductions in inflation, especially for materials, are a positive signal for the industry. With costs already decreasing from their peaks and lower expected interest rates, cost stability becomes a hallmark of offshore wind projects.

5. Government Collaboration: Governments play a pivotal role in the offshore wind industry's future. They should actively reevaluate and realign tenders for offshore wind capacity. This not only affects pricing but also shapes the regulatory framework to foster a favorable environment for offshore wind development. ?

In summary, the offshore wind industry isn't just resilient; it's on the brink of significant growth. By putting these solutions into action and navigating the challenges, the industry can continue to lead the charge toward a more sustainable energy future. Offshore wind remains a critical player in the global transition to cleaner energy sources, and these strategies will ensure its enduring success. Through innovation, cooperation, and strategic planning, offshore wind will thrive amid evolving challenges.?

EU members to increase share of Renewable energies This week, the EU revised its Renewable Energy Directive (RED), requiring member states to lift the share of Renewable energy in their overall consumption to 42.5% by 2030. This seems very ambitions, and targets have been raised through the revision of the RED. The EU can however potentially reach this target. The graph below displays split between fossil and non-fossil fuels in Europe’s primary energy consumption. Please note that the graph is looking at all of Europe, whereas RED naturally addresses EU member states only. In Europe, as of 2022, 29% of primary energy consumption was non-fossil, while 71% was fossil. Note that there are also some nuances between “non-fossil” and “renewables”, as renewables is defined by EU’s RED (non-fossil below naturally includes nuclear, hydro etc.) The bottom line as Clarksons sees it:

1. These targets can actually be reached
2. To do so will require massive additional investments into Renewables by 2030, predominantly solar and wind

OFFSHORE RENEWABLES NEWS

North Star’s second service operating vessel (SOV) has started operations at Dogger Bank offshore wind farm. The SOV Grampian Derwent?set sail for the 3.6 GW Dogger Bank offshore wind farm in the UK. After completing the final commissioning testing by the technical and rescue teams at North Star, the vessel set sail from the company’s home harbour of Aberdeen to the Dogger Bank Wind Farm and the Port of Tyne. This is the second?of four SOVs designed and being built by Vard that have been chartered to support operations and maintenance (O&M) work?at the offshore wind farm. Source: Offshore WIND

CWind has announced their acquisition by Inspirit Capital, a UK-based investment firm. This transforms CWind into a standalone company, no longer affiliated with Global Marine Group, the subsea cable solutions provider. CWind completes approximately 60,000 crew transfers annually, utilising their fleet of 12 owned/operated crew transfer vessels (CTV), including the world’s first hybrid Surface Effect Ship CTV, CWind Pioneer. The company has played a role in over 50 UK and European offshore wind farms since 2010. In 2017, Global Marine Group acquired CWind, and the following year, established CWind Taiwan in partnership with International Ocean Group, a Taiwanese Offshore Wind services provider. In July 2023, International Ocean Group purchased Global Marine Group’s shares in CWind Taiwan to become sole owner. Source: CWind ?

Boskalis' heavy lift crane vessel Bokalift 2 has installed the first monopile of the 882 MW Moray West. The Scottish offshore wind farm will include 60 Siemens Gamesa wind turbines with a capacity of 14.7 MW and two offshore substations, all anchored on monopile foundations. Dajin Heavy Industry will supply 48 monopiles, while Navantia Seanergies and Windar Renovables will contribute 14 units. Lamprell will manage the production and delivery of all 62 transition pieces for the offshore foundations. The installation of the 2,000 tonne monopile foundations and the two offshore substations is expected to be completed by June 2024. The installation of the monopiles and the topsides of the substations is expected to be completed by the end of March or early April 2024, with all transition pieces installed by June of the following year. Ocean Winds, the main developer, is the majority owner, while Lithuania's Ignitis Group holds a minority stake. Source: Offshore WIND ?

Dogger Bank, the world’s largest offshore windfarm under construction, has started producing electricity for the first time. The 3.6-GW Dogger Bank windfarm is being constructed 130 km off the coast of Yorkshire and in three 1.2 GW phases known as Dogger Bank A, B and C. Power from the project’s first offshore wind turbine at Dogger Bank A is now being transmitted to the UK’s national grid via a high-voltage direct current (HVDC) transmission system, this being the first-time use of HVDC technology on a UK windfarm. First power followed the installation of the first of GE Vernova’s Haliade-X 13MW turbines. This is the first time Haliade-X units have been energised offshore anywhere in the world. Source: Clarksons Renewables Intelligence Network ?

Ignitis Renewables and its partner Ocean Winds will develop the first offshore wind project in Lithuania. This was announced by the National Energy Regulatory Council (NERC) after it finished the screening of the provisional winners regarding their compliance with national security interests. It is estimated that the 700 MW wind farm, located in the Baltic Sea, could generate around 3 TWh per year, which would meet a quarter of Lithuania's current electricity demand. Following the NERC's announcement, Ignitis Renewables and partners must set up a joint company in Lithuania within a period of 3 months. The joint venture company will be responsible for managing and implementing the project. The company will be awarded the development and operation permit, granting the right to use the maritime area for electricity generation for 41 years. Lithuania’s first offshore wind farm was put out to tender without an offer for state support and will operate under market conditions, with the developer to carry out site investigations and surveys at its own expense. Source: Ignitis and Offshore WIND ?

Jumbo Offshore has been contracted by Van Oord for the transportation and installation of transition pieces for the Baltic Eagle offshore wind project. The operations on the project in the German Baltic Sea are to commence in October 2023. Due to the close cooperation and extensive experience between the Jumbo Offshore and Van Oord project teams, the preparation time has been very efficient. Under the contract, Jumbo Offshore will be responsible for the transportation and installation (T&I) of transition pieces from the marshalling yard to the offshore wind farm site. According to Jumbo Offshore, the company has transported and installed over 400 transition pieces with our DP2 heavy lift vessels. Source: Jumbo Offshore

DEME Offshore has been awarded the cable contract for Baltic Power in Poland. DEME is responsible for the design, procurement, construction and installation of both the inter-array and export cables for the wind farm. DEME Offshore, together with consortium partners NKT and TFKable Group (TELE-FONIKA Kable and JDR Cable Systems), will sign a contract for approximately 130 km of export cables and 127 km of inter-array cables. According to DEME, the contract is worth between 150 and 300 million euros. Baltic Power is the first offshore wind farm to be built in Poland. The 1.2 GW wind farm will be located 23 km off the Polish Baltic coast near ?eba. It is being jointly developed by ORLEN Group and Northland Power, with construction scheduled to start in 2024 and commissioning in 2026. Source: DEME

Bladt Industries and Semco Maritime have been awarded the EPCI contract for the two offshore substations for the Baltic Power Project. Both companies have together with their primary sub-contractor, ISC Consulting Engineers, already completed most of the engineering scope, both for the substations as well as for the monopiles and transition pieces, which will also be supplied by Bladt Industries. The two substations will be constructed and established in the coming years. The project is planned for offshore installation in 2025 and completion of commissioning in 2026. Each substation will be a 2.5 thousand-tonne steel structure standing on foundations and rising about 20 meters above the sea level. Source: Semco Maritime ?

Jan De Nul and Hellenic Cables has signed export cable contracts for Baltyk II & III offshore wind farms. The consortium will design, manufacture, transport and install a package of four 220 kV HVAC export cables to connect the Polish offshore wind farms to shore. Design and manufacture of the cables will take place at Hellenic Cables’ plant in Corinth, Greece, after which Jan De Nul will transport, install and bury the cables. Baltyk II and Baltyk III are developed by the joint venture of Equinor and Polenergia. Both wind farms are located in the Polish sector of the Baltic and will each have a capacity of 720 MW. They will connect to the onshore grid via a total of four HVAC submarine cables with a combined length of 256km. Source: Jan de Nul ?

Semco Maritime and PTSC M&C have been named the preferred suppliers for CIP's Taiwan offshore wind farm. The consortium is responsible for providing the substation for the 500 MW Fengmiao project. This selection came from the initial auction of the Round 3 Zonal Development phase held in December last year. CIP’s Taichung Fengmiao offshore wind farm, planned for the waters off Taichung City, is being developed to have an installed capacity of 1,800 MW. The offshore wind farm will include turbines with a capacity of 9 MW to 20 MW, resulting in a minimum of 90 and a maximum of 187 units, depending on the turbine capacity selected. These wind turbines will be installed on foundations with three or four legs. Source: Offshore WIND

Meridian Energy and Parkwind have signed a memorandum of understanding (MOU) for the exploration of offshore wind generation in New Zealand waters. Efforts will focus principally on the Taranaki coast and build on work already undertaken by Parkwind, including engagement with the iwi of Taranaki and key stakeholders. Depending on the outcome of the joint exploration, the two parties may decide to work towards a feasibility permit. Both parties are interested in long-term investments and relationships, following a build to own and operate business model. Source: Parkwind

MEET CLARKSONS AT RENEWABLES EVENTS

5th Japan Wind Energy Day, Tokyo 17th – 18th Oct. | More information?

Wind Energy Taiwan, Taipei? 18th – 20th Oct. |?More information

10th Asia Offshore Wind Day, Busan? 24th Oct. |?More Information

Offshore Energy, Amsterdam 28th – 29th Nov. |?More information

Contacts

OSLO

Frederik Colban-Andersen?|?Managing Director?

Erik T?nne?|?Managing Director, Market Analysis

Jens Egenberg?| Head of Research Renewables

Anders C. Hagen?| Chartering Walk-2-Work, Subsea

Vegard Volls?ter?| S&P and Newbuilding T&I/CSOV

Espen Bj?rnson?| Chartering Subsea & Wind

HAMBURG

David Matthews?| Head of Strategy Renewables

Rouven C. Willner?| Projects SOV, CSOV

Tim?B?rner?|?Chartering Walk-2-Work, Gangways

Henning Leverkus?| Chartering CTV, Tugs & Workboats Sina Ingber?| Marketing & Projects

COPENHAGEN

Gabriel Andersen?| Principal Consultant Logistics and EPC ?

LONDON

Neil Buchan?| Head of APAC Subsea & Wind?

Mikkel Nielsen?| Principal Consultant Logistics & O&M?

Chris Roberts | Chartering and Renewables Consultant

ABERDEEN

James Braid?| Divisional Director Logistics, Transport & Installation

Olivier Candeel?| Chartering & Consultant Transport & Installation

Oliver Thompson?| Market Analyst, Transport & Installation

Chris Tweedie?| Chartering Subsea and Offshore

HOUSTON

Jonathan Lints | Director Subsea and Renewables

Jack Fitzgerald?| Chartering Jones Act Specialist?

Tylor Bojé | Chartering?OSV / Jones Act Lead

SHANGHAI

Jack Qiu?| Projects Newbuilds and China?

SINGAPORE

Tilly Manley?| Chartering APAC Renewables ?

Smarter decisions.? Powered by intelligence.?

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