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US OFFSHORE WIND (OSW) – Jones Act, Logistics & O&M Challenges

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Tariq Siddiqui's picture
COO Upstream EP Advisors LLC

Oil & Energy | Business Development | Capital Projects | Offshore Wind -  Proven leader in offshore development and operations, with 25+ years’ expertise in managing business through cycles...

  • Member since 2021
  • 121 items added with 77,105 views
  • Feb 11, 2021
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Premise

I was recently contacted by industry group working on climate change initiative and challenges faced by the offshore wind industry in US, with 34 projects in the development pipeline (in various stages of maturity). Group specifically, wanted to know the installation and operations & maintenance (O&M) challenges faced by offshore wind (OSW) industry and the impact of Jones Act on installation and operations, and what learnings from offshore oil & gas industry can be leverages to kick-start OSW in US.

Climate change threat and Paris Agreement limit are pushing the governments and the energy industry towards swift transition and transformation of energy industry to greener energy solutions. Fossil fuels still contribute about 63 % for electricity generation in USA, renewables only 17%. US has a tremendous offshore wind potential (+2000 GW), yet we only have 2 fully commissioned projects; The 30 MW Block Island windfarm, offshore Rhode Island, and a 12 MW Coastal Virginia offshore wind farm.  Lessons learned by European developers can fast-track US OFW.

Lessons Learned from UK & Oil Industry

UK has the largest OSW industry, more than rest of Europe and lessons learned are important. In the beginning, the UK OSW industry faced severe challenges, and the industry heavily relied on oil & gas sector for the supply vessels. There was a competition for their availabilities that inflated the rates for the vessels, that were sometime not ideally suited or sized for OSW operations. Many were retrofitted, for nearshore benign environment. 

But, as the OSW farms moved to deeper and further offshore to benefit from economy of scale and higher revenues, logistics and marine environment also become more challenging. The cost and schedule became pivotal; the installation and O&M cost offshore, account upto 30 % making OSW energy less competitive. Therefore, later vessels in tougher meteorological environment were dynamically positioned (DP) and purpose-build to optimize logistics and reduce cost. The US OSW industry lacks, specialized vessels that are jones-act compliant.

Jones Act and Implication (Short & long-term)

The Jones Act has long been a point of concern for the offshore wind sector in US. It requires that any components moved between US ports, be transported using a vessel; that is manufactured, flagged and operated by US staff. Rather than being an impediment to the U.S. market’s development, the Jones Act could, according to one Avangrid official, “spur the creation of new ways of approaching offshore wind logistics that will benefit markets around the world.” It is no longer considered as a drawback, rather a ‘peculiarity in the US’ market.

The Block Island windfarm which is fully commissioned, serves as an example. The Norwegian developer supplied the foreign-flagged jack-up that transported nacelles to the port from France. Once at the port/project site, US-flagged, Jones-Act compliant feeder-vessels, supplied the balance of plant to the offshore installation site, where installation was done with foreign-flagged ships. The installation, vessels never went to US ports. The US OSW industry currently lacks specialized vessels like; wind turbine installation vessel (WTIV), Cable laying vessels (CLV), Service operating vessels (SOV). This feeder-barge strategy may be Ok for a pilot or a small demonstration project, but will not be a cost-effective long-term solution, given the federal governments ambitious plans of additional large development (24 GW) areas in the Northeastern USA, that will require purpose-built vessels. This requires understanding the logistics and challenges faced.

Offshore Wind Installation Phases & Challenges 

Offshore wind farm installation is similar to offshore oil and gas installation. To understand the technology challenge, we need to understand the logistic challenges and the installation phases.  

There are eight (8) distinct installation phases in OSW that require a specific vessel: 

  1. Survey & Dredging
  2. Foundation laying
  3. Transition piece connection
  4. Wind Turbine Generator (nacelle, tower, rotor)
  5. Scour protection
  6. Pre-lay Grapnel Run (PLGR)
  7. Cable Installation
  8. Cable Burial

In addition to installation phases, developers face further logistic challenges that may require vessels to be retrofitted or purpose-built. These challenges are:

  1. Distance from the shore
  2. Turbine size
  3. Water Depth
  4. Weather severity.

The key lessons learnt from UK OSW industry is that in early shallow water windfarms in benign weather service, small turbines (2-3 MW) were mounted on mono-pile foundations with mostly retrofitted installation vessels from oil and gas industry. However, as the industry matured; projects moved to deeper, challenging meteorological conditions, purpose-built vessels were used for tougher service; heavier gravity based/jackets foundations supporting larger turbines (7-8 MW).

Offshore Wind (OSW) - Installation Vessels & Service

1-Survey & Dredging

Survey is done well in advance of construction.  It informs team on obstacles and seabed integrity and recommends the need for dredging

  • Dredging 
  • Vessel
  • Benign condition: simple barge, with backhoe excavator
  • Tough conditions: DP, Trailing Hopper Suction design (THSD)

2-Foundation laying

  • Vessel
  • Benign condition (mono-piles): Jack-up(JU) barge, WTIV
  • Tough conditions (Jackets): Dynamically Positioned (DP), heavy-lift vessels 

3-Transition piece (TP) connection

Transition piece (is a structural section that links the foundation and wind turbine. It provides a fendering area for crew transfer vessels to interface with the structure for either construction or maintenance tasks.

  • Benign condition: Jack-up barge & WTIV with crane (could be retrofitted)
  • Tough conditions: Floating crane WTIV (purpose-built)

4-Wind Turbine Generator (nacelle, tower, rotor)

Installation strategy depends on size and conditions; Smaller turbine fully assembled with a single-lift, usually heavy-lift vessels with large working area. 

  • Smaller turbine: fully assembled with a single-lift, usually heavy-lift vessels with large working area (JU-barges or floating cranes)
  • Larger turbines: individual sub-sections with WTIV vessels/DP-Purpose built
  • Scour protection

5-Scour protection is installed to prevent structural instability around the foundation of an offshore wind turbine.

  • Benign condition: Hopper barge & towing tug or side-stone dumping
  • Tough conditions: Fall Pipe Vessel - FPV+ROV (purpose-built)

6-Pre-lay Grapnel Run (PLGR)

PLGR is used to clear debris along the cable route before installation, ensuring that hazards do not interfere with cable laying

  • A multi-purpose vessel (MPV) with a pull of about 20 tons

7-Cable Installation

Inter array cables between turbines are not usually buried

  • Benign condition: Modified barge & towing tug 
  • Tough conditions: DP, Cable Laying Vessel (CLV)- purpose-built

8-Cable Burial

The cable burial phase is assumed to enclose both the trenching process and final burial of the cable. Export cables are buried.

  • Vessel: Modified barge & towing tug 

Operations & Maintenance Vessels

In Offshore Wind Farms, O&M cost could be staggering 34 %. Turbine O&M costs constitute the biggest portion of offshore wind OPEX spend. Blade erosion and repair remain a huge concern in the offshore space. In terms of Balance of Plant (BOP), subsea cable failures pose the highest risks to project development and operations.

Service Operation Vessels (SOV): Purpose-Built, Walk-to-work solution

  • Carries everything needed for maintenance, including technician & materials
  • Service station at sea for swift action; a Flotel; stays out 14 days

Crew Transfer Vessel (CTV): Purpose-Built (no-accommodation)

Serves as Operation Maintenance & Service (OMS) base transport vessel

  • Typically, they are catamarans; 30 knots x 30 m long; max 24 technicians (Avg. 14)
  • Load capacity of 30 tons for turbine component 

The transition and transformation in energy industry in US requires a swift action to meet the climate targets. Developing logistic and O&M capabilities in US, would be a key enabler for the developers to bring timely and cost-effective energy solutions to the consumers.  

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Matt Chester's picture
Matt Chester on Feb 11, 2021

The key lessons learnt from UK OSW industry is that in early shallow water windfarms in benign weather service, small turbines (2-3 MW) were mounted on mono-pile foundations with mostly retrofitted installation vessels from oil and gas industry. However, as the industry matured; projects moved to deeper, challenging meteorological conditions, purpose-built vessels were used for tougher service; heavier gravity based/jackets foundations supporting larger turbines (7-8 MW).

Love seeing these type of invaluable insights from the early movers. Almost makes up for the fact that the U.S. is lagging because they get the learn these the easy way. 

Tariq Siddiqui's picture
Tariq Siddiqui on Feb 12, 2021

Matt Thanks.

Offshore wind industry in US is moving fast. At present, US OSW players are relying rightly on more experienced international developers. What I want, and hope to see is US developers emerge in OSW industry, equivalent to Exxon-Mobil and Chevron of oil & gas.

Matt Chester's picture
Matt Chester on Feb 12, 2021

That would be great to see, and I know a number of East Coast states are vying to be those hubs for the manufacture of offshore wind equipment. Are any new players in the game going to be too far behind the incumbent international options, though? 

Tariq Siddiqui's picture
Tariq Siddiqui on Feb 13, 2021

At present, OSW in US is an emerging industry, so indeed developers and manufacturer have indeed some catching up to do. The Bureau of Energy Management (BOEM), despite being apparently tough on Environmental Impact Assessment (EIA) is sending right signals to the industry that should allay fears of the investors and developers alike. One of the main concerns of the investors to be hesitant with OSW, is the regulatory instability/uncertainty and government support! This may seriously erode their value and returns.

The logistic and vessels industry may be behind in time but not far behind in developing capabilities.  All they need is investors, and they will be on learning curve very quickly, thanks to existing body of knowledge and experience from oil and gas  offshore vessel industry. 

The US developers face a bit more challenge! The development experience in US is very limited, so they are currently collaborating with well established international players in the front-end development phase (before construction). They, however need to have a front-end management process, sited to their conditions, to make robust decision to create revenues and values and minimize risks and uncertainties in front-end space (my next post).

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