Meeting offshore wind supply chain challenges: Insights from Carl Trowell, Acteon Group Chief Executive
Q. What does all this mean for the supply chain?
For us, it means continued growth and offshore wind soon becoming our largest market. I’m particularly excited about applying our mooring and anchoring expertise to help commercialise floating wind, and supporting emerging markets by building on our integrated, global services.
However, we should not underestimate the scale of the challenge, and some sectors of the industry will be severely stretched.
I’m concerned that not all developers and installers yet appreciate the impending shortage of key equipment and services, especially as turbines and foundations continue to increase in size.
Q. How do we meet growing demand, especially in new markets?
Installation services cannot simply be transplanted or extended from Europe into emerging markets. For a start, they will be needed in Europe to meet growth in that region, and many countries across the world have strict local-content requirements. The industry needs to create and grow local supply chains. For Acteon, this means continuing to invest in and add to our network of logistical bases in Brazil, Norway, Singapore, the UK and the USA, and forming partnerships with local suppliers as we have done, for example, in Taiwan.
Another challenge is that, beyond the tier one engineering, procurement and construction providers, the supply chain is fragmented. To put this into context, there are ten times more vendors involved in a typical wind development than one for oil or gas. That’s a massive administrative burden for installers and developers, and there is potential for inefficiencies and project delays. To address this, I expect we will see supply-chain consolidation across the industry.
There will likely be more infrastructure installed in the sea over the next two decades than has been installed during the entire history of the oil and gas industry. All this infrastructure needs to be engineered, constructed and then maintained during its life-cycle. There is the opportunity for new global service companies to develop in order to service this new industry. We are only at the beginning of this evolution and I hope Acteon will play a key role. Accordingly, we are expanding our service offering and global footprint and have recently simplified our business structure to make life easier for our customers to engage with us at a global scale.
With respect to new markets, there are two ways to view this. Firstly, there is the obvious issue of expanding offshore winds into new territories, such as the USA or Asia and the challenges this brings when building capacity in marine basins that do not have a highly developed offshore supply chain. But secondly, there are the “new markets” brought about by the technological challenges of pushing offshore wind into more challenging water depths and into areas where the seabed does not lend itself to the simple installation of monopile foundations.
To enable the efficient installation of ever larger turbines, and to allow turbines to be installed in challenging substrates, we need to move to more integrated foundation systems in which the pile, pile handling, drive-drilling system, and grouting systems are integrated with each other and the installation vessel. This is an area where Acteon is uniquely placed to help define new installation techniques. We’re making good progress on this front and are continuing to focus on efficiency through integration.
To give you an example, Vestas’s 15-MW V236 turbine is immense, with a 236-m rotor diameter. That means it is necessary to install XXL monopiles, which requires foundation systems like our “gentle giant” MENCK MHU 4400S hydraulic hammer. This, along with our other equipment and our expertise, has been developed over decades, in step with the growth in turbine and foundation size. Growing the supply chain is an urgent industry priority, much of the equipment required to install the turbines of the future does not yet exist or requires a massive step up in CapEx investment.
As the installed base grows, so too will demand for operation and maintenance services. Here, too, there is potential to reduce turbine downtime and operational costs through integration, working alongside specialist service providers, like Siemens Gamesa to provide above-water and subsea balance of plant operations and maintenance services.
Q. What about floating wind? Even modest projects will need many kilometres of chain and numerous anchors.
Indeed. To give you an idea of the scale, currently, there are three operational floating wind farms with 14 turbines altogether. Over 70% of the ScotWind leases awarded this year are in water depths greater than 70 m, which means many hundreds of, possibly more than a thousand, floating structures. With each turbine needing four to eight mooring lines, that’s a lot of chain and anchors. There is seabed characterisation and inspection, monitoring and maintenance work to consider too. That’s in Scotland alone. Incidentally, local supply chain commitments had to be made as part of the ScotWind bidding process, which we are providing from three logistical bases in Scotland, which underlines my earlier point about the need for local content.
Overall, the process of engineering, constructing, installing and then maintaining floating wind farms will be far more supply chain intensive than for fixed wind turbines. We are in a strong position to support floating wind growth as we can draw on decades of experience mooring floating assets across the globe, dealing with complex logistics and moving multiple floating structures simultaneously; and we have the world’s largest mooring inventory, deep supply chain knowledge and procurement agreements with established vendors. Floating foundation engineering studies have also given us valuable insight.
However, there is no escaping the shift in scale needed, even simply for securing enough mooring chain.
Q. Is the future all about floating wind?
By 2030, floating wind is expected to be about 7% of the installed base with 16.5 GW capacity but will continue to grow thereafter. Floating wind has the ability to expand the geographic areas from which we can generate offshore electricity, but it needs to be delivered at scale and at a cost-efficient level. Acteon is one of a handful of companies capable of supplying the complex engineering, mooring and anchoring solutions needed. So, we see floating wind being a major part of our business – alongside fixed wind.
One of the drivers behind floating wind is that we are running out of the “easy real-estate” for fixed wind. The industry needs to find solutions for deeper water, more distal locations and areas where the seabed is consolidated such that monopiles cannot be simply driven. We have the technology and experience to anchor and moor floating assets and the challenge is mostly about scaling up resources. However, in other new areas such as offshore France or California, there are harder substrates where new foundation designs and technologies will be required, not just floating wind. No one has the perfect solution yet, although we, and I am sure others, have innovative research and development programmes in place through which we aim to develop solutions.
Q. What can developers and installers do to help?
We all need to work together to meet the challenges. One of the things installers and developers can do is work with us early in-order to consider installation cost and complexity into the project design. Currently, each new wind farm tends to have bespoke foundation designs. This drives up installation costs and risks, limits available equipment and means there is often no equipment redundancy. One solution is to design wind farms around already available installation systems.
A second area is to recognise that there is now a very large number of installation projects being planned for the period from 2023 to the end of the decade and there is going to be a shortage of critical equipment and capacity unless CapEx planning begins now.
Q. Can you give us an example in which early engagement or integration has made a difference?
Yes, there are many. Traditionally, geotechnical studies are commissioned following geophysical surveys, but there are advantages to an integrated, collaborative approach, in which the two surveys are combined to ensure faster site assessment and targeted geotechnical work.
Another example is where we are engaged with a floating wind developer at an early stage. We are working on a joined-up study by which we are engineering the mooring and anchoring system in conjunction with the installation processes, with the aim of reducing installation risk and cost at the design phase.
Q. What more can the supply chain do to meet demand while reducing costs?
The LCoE from fixed-foundation turbines has reduced rapidly, making offshore wind increasingly competitive, and high oil and gas prices are tipping the balance further in favour of offshore wind. I’m confident that the same rapid cost reductions will happen for floating projects. Indeed, Equinor is aiming to reduce the cost of Hywind Tampen, in the Norwegian North Sea, by 40% compared with Hywind Scotland.
We have a key role to play through technology development and optimising, integrating and industrialising processes. This is happening constantly across our services. As I’ve mentioned, we are increasing seabed site characterisation efficiency and data quality by combining geophysical and geotechnical surveys. We are also using autonomous surface vessels to double geophysical survey coverage and halve its carbon footprint, and we have developed a new Portable Remotely Operated Drill (PROD5) specifically to increase productivity and cut costs for the offshore renewable energy industry.
For fixed foundations, we have developed the world’s most powerful hydraulic hammer, equipped with cutting-edge noise mitigation technology, and have the largest grout mixing system in the industry, which produces grout to a very tight density tolerance. For floating wind, we have reduced anchoring costs by combining the advantages of suction piles and plate anchors in our proven Suction Embedded Plate Anchor (SEPLA).
Our VALOR (Versatile and Lightweight Observation ROV) helps to further reduce installation and inspection costs by punching above its weight. It’s the most powerful observation ROV in its class and is highly versatile, and its size and efficient piloting can lower mobilisation and operation costs.
There are many more examples and new technologies in development and testing. For instance, as mentioned previously, we are looking at efficient ways to install fixed and floating wind turbines in areas with hard or challenging soils.
Our divisions work together and with strategic partners to develop integrated and holistic approaches. We are currently collaborating closely with developers and hull manufacturers to provide dynamic engineering and mooring designs, installation cost comparisons and suitability analyses for different floating foundation types.
Q. And finally…?
The industry is facing unprecedented growth, which will bring tremendous opportunities, but could also lead to supply chain challenges. The supply chain system for supporting offshore wind is still immature, and I don’t think the industry has yet fully woken up to the meaningful consequences of the amount of installation that is due to happen over the next decade. Furthermore, I believe it is time that the industry recognised and seized upon the engineering and installation expertise that has been built up by the offshore oil and gas supply chain. As offshore wind projects become more challenging we do not have to reinvent the wheel. I’m sure these issues will be hotly debated at Wind Energy Hamburg later this month. Let’s do that, but let’s also redouble our efforts. Together, I’m confident that we will meet the supply chain challenges and continue to help drive down the LCoE for fixed and floating wind to provide cleaner, more secure energy.
Carl Trowell Biography
Carl Trowell became Acteon Group Chief Executive in 2020, during which time he has focussed Acteon Group on becoming a leading supplier of engineering and services to the offshore wind industry. He has more than 25 years of experience in a wide range of roles across the energy sector, including with Schlumberger as managing director for the North Sea region and global head of marketing and sales, before becoming president of three of the Schlumberger service divisions. Carl was also CEO of Ensco PLC and an advisor to EVPE energy investors.