Offshore Collaboration: Offshore wind developers’ north star amid ship shortage 5.10.2024 Share (A "bubble curtain" encircles the installation vessel, reducing sound waves in the water, during the construction of the Coastal Virginia Offshore Wind pilot project. Credit: Dominon Energy / Courtesy) By Pascal Radue, Executive Vice President, Generation and Transmission, Nexans The renewable energy industry has its sights set on ambitious goals for the future, including meeting a growing demand for offshore wind. Globally, offshore wind capacity is poised to quintuple between 2022 and the middle of the next decade, according to BloombergNEF. But as the size of wind turbines grows to increase output power of energy projects, developers also need access to bigger ships that are capable of installing these bigger turbines. After years of supply chain strain, growing cost of materials, and increasing interest rates, a global specialized ship shortage is another challenge the renewable energy industry faces in achieving its ambitious offshore wind projects. Combining logistical bottlenecks with outsized growth objectives leaves little room for error. It will require functional, counterparty, and regulatory alignment. If all stakeholders involved are not forward-thinking and collaborative, the industry will be challenged to meet its objectives. Ship shortages: A compounding problem Part of creating solutions and collaboration is digging deeper into the friction points in the system. Leaders in offshore wind development are certainly concerned about how shifts in the supply chain impact manufacturing and development goals. One of the primary consequences of the ship shortage is the extension of project timelines. Delays in securing installation vessels can push back the completion dates of offshore wind projects, sometimes by several months or even years. These delays not only increase project costs but also introduce uncertainty for developers, investors, and utilities, jeopardizing the financial viability of projects and undermining investor confidence in the sector. Moreover, the scarcity of installation vessels impedes the development of new offshore wind projects. Developers are competing for the limited number of available vessels – only a handful globally, outside of Asia, are capable of handling large turbines – driving up costs and potentially stalling project development. As a result, the industry faces challenges in expanding its capacity to meet renewable energy targets and contribute to the decarbonization of the energy sector. Coordination and sustainability: Guiding streamlined solutions Unfortunately, change at this scale happens slowly. Even if vessels could be committed towards specific offshore wind projects in advance – a situation that is still a challenge in the U.S. under current permitting regulations – it still takes years and millions of dollars to build a single new installation ship. In the short term, collaboration among stakeholders, including developers, manufacturers, shipping companies, and regulators, is the most important factor in accomplishing offshore wind development goals. Cooperation at every level of the development process has the potential to unlock new efficiencies. Consider the capabilities of existing vessels: working together, offshore developers can better optimize the allocation of existing vessel capacity and prioritize projects based on urgency and environmental impact. Streamlining regulatory processes and permitting requirements can reduce delays and uncertainties, enabling more efficient project development and deployment of installation vessels. While some projects have found successful ways to work around U.S.-specific regulatory challenges like the Jones Act, a modern regulatory environment that allows collaboration and reflects the push for sustainability goals will remove barriers much quicker. Join us at GridTECH Connect California, June 24-26, 2024, in Newport Beach, CA! With some of the most ambitious sustainability and clean energy goals in the country, California is at the cutting edge of the energy transition while confronting its most cumbersome roadblocks. From electric vehicles to battery storage, microgrids, community solar, and everything in between, attendees will collaborate to advance interconnection procedures and policies in California. Collaborative efforts to standardize industry practices across the globe, such as turbine component sizes and installation procedures, can further streamline operations and reduce costs. Sustainability must also be part of future solutions. Retrofitting existing ships for large wind turbine installation is both sustainable and quicker than building anew, but leaders shouldn’t stop there. Ships and wind turbines both require raw materials which are limited resources. Both problems share a solution in sustainability. Recycling raw materials and integrating reused materials into new production can help incrementally alleviate strain on supply chain and inflation while reducing carbon emissions. Act now: three steps to create change The challenges working against offshore wind development are multifaceted; they can’t be solved by one leader, one company, or one team acting alone. Consider the following ways to jumpstart change and collaboration within your organization: Advocate for government policies that support growth: No matter what part of the value chain you support in your work, government systems and regulatory agencies play a role in how progress is made in any renewable energy project. To bring about faster change in energy infrastructure, we need to change the policies and regulations that facilitate development and incentivize investment the support systems – like large installation ships – that keep projects moving forward. Permitting reform, for example, would be a great first step towards change. But we need to collaborate with state and federal government leaders to help that happen. Engage in industry collaborations and partnerships: As humans, we can solve complex problems faster when we share knowledge and solutions. The same should be true in the renewable energy sector. The technology available to us today is hundreds of times more powerful than what was available when the energy grid was first designed. We have technology that makes information sharing instantaneous. As an industry, we should share best practices, resources, and expertise for problems like optimizing supply chains and vessel operations to bring about solutions even faster. Prioritize minimizing carbon emissions: Every additional kiloton of carbon emissions required to build renewable energy projects increases the length of time for those projects to be truly carbon neutral. It is easy to overlook sustainable steps when the objectives are so daunting, but if sustainable development is not a centerpiece of renewable energy projects, we lose heart of the matter. With so many competing projects, weighing their impact before they are complete and after they are operational is a sound framework for prioritizing limited resources. Producing as much power as possible with minimal carbon output is the true goal we should all be working towards. But given the scale of the challenge ahead, it is easy to lose sight of why we have such ambitious goals for renewable energy projects. If we do not advocate for this change, work together to achieve it, and honor the end-goal throughout development, we are far less likely to achieve these goals. About the author Pascal Radue is Executive Vice-President, Generation and Transmission, at Nexans. He has more than 20 years of experience in leading international teams around the world and has held a wide range of senior positions in project management, executive management and business transformation. He began his career with Alstom Power in Belfort, France, in 2001. During his tenure with Alstom and later GE, Pascal held various leadership positions, most recently as CEO of GE Hydro. As Executive Vice-President, Generation and Transmission, he will actively contribute to the Group’s ambition to become a pure player in electrification worldwide. Pascal Radue holds a Master of Engineering (Hons) degree in naval architecture from Southampton University in the UK. 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