The Murmur of Cooperation in Offshore Wind, Boston This Week

A Tale of Two Conferences in Boston this Week

Earlier this week I was able to visit two offshore wind conferences in Boston:

The fourth annual US Offshore Wind 2019 (USOW19) conference and exhibition Tues. – Weds. June 10 & 11, 2019, at Marriott Copley Square, Boston and a smaller one-day offshore wind summit hosted by ASME and called an Offshore Wind Summit Opportunities, Realities, and the Path Forward, by the American Society of Mechanical Engineers at the nearby Fairmont Copley Hotel on Thurs. the 12th (the sites/photos/tweets are not included to save space). The first bills itself as “the world’s largest networking event for existing and new market players,” and is hosted by NewEnergyUpdate.com, part of FCBI Energy Ltd. of the UK.

Takeaways from both conferences made it clear that major hurdles and misunderstandings between US and EU businesspersons had been overcome in a comparatively short time (2-3 years) and folks are getting down to the brass tacks.

The keynote speaker for the larger event was Massachusetts Governor Charlie Baker and the opening panel for the second featured representatives from New York, Maryland, Rhode Island, and Massachusetts as well as Siemens Gamesa Renewables and was mediated by Liz Burdock, Executive Director of the Business Network for Offshore Wind.

Keynote Speakers also included the head of BOEM, so there was delivery of substantive discourse in real-time and on Twitter at #USOW19, with private meeting rooms run by Vineyard Wind, Ørsted, Siemens Gamesa, GE, MHI Vestas and other principals manned virtually around the clock, with often a coterie of appointment holders waiting in the wings

Reps from states up and down the coast as well as owners of equipment ashore and afloat from the US Gulf and beyond were there. Academics and the press spread globally attended.

The first event is said to have attracted c.1,300 persons and 50 exhibitors and it occupied over 2-3 floors of the conference center. Next year it will be moved nearby but to (presumably) a larger venue at Hynes Convention Center in the same interconnected complex.

On the supply side were shipyards, dredgers, tug and equipment owners, as well as members of non-marine engineering supply chains, folks pitching the principals and just trying to figure out where their teams back in the home office would fit, how they might fare, and when they might make money.

One US attendee said they felt that:

1 – with a NYSERDA outreach event in New York there was a “turning the corner” – you can see the NYSERDA calendar at https://www.nyserda.ny.gov/Event-Map and they have a renewable energy conference in NY in the end of June 2019.

Other observations include:

2 – European investors recognize they have to work with Jones Act as is, that there are no huge ports, just bits of smaller ones

3 – not just Europeans must learn to understand American attitudes but the other way round. However learning what kind of vessel a EU firm requires may not be enough: perhaps they only use existing vendors, maybe they need helicopters as often as CTVs?

4 – As compared with other conferences, the number of business cards from
Europeans with Native American addresses here in New England was very
encouraging. Already major participants who formed a beach-head. Ørsted has
been in One International Place on Oliver Street in the Financial District for
over three years new. They provided an anchor to other offshore wind firms,
including Spanish, Portuguese, who also set up starting around 2017-18. Others
flow in, to be announced in the MASSCEC Directory later this month (link
above).

MHI Vestas committed to move to Boston in January 2019 and should be
publicizing their locale shortly. Ørsted has also set up offices in New Bedford
for Bay State Wind, took over Deepwater Wind’s offices in Providence, and lists
six other projects down to Virginia in various stages of development. SGRE or
Seimens Gamesa Renewable Energy (Spanish HQ) are in the Orlando, FL area.
Equinor of Norway are in the Stamford and NY region where their Empire Wind and petroleum and gas desks are also situated.

Vineyard Wind prefers to be closer to their action in New Bedford. Several European firms are in Rhode Island, which sits astride a strong network of rail and
highways on the DC – Portland/Boston corridor. Others are sprinkled in Florida
and Houston and of course NY and outside DC.

See external link: http://form.jotform.com/91295936539169 – the Massachusetts Offshore Wind Supply Chain Directory to register your firm. At https://www.masscec.com/massachusetts-offshore-wind-supply-chain-directory you can also see which firms are represented and where. However, this list of 450 firms in 2018 is already being expanded vastly into an online directory due this month.

Crew Transfer Vessels/CTVs pose sensitive questions, particularly to Americans. Several US players will naturally view this segment as a way for them to make a market penetration without the scale and largely prohibitive costs of offshore wind
tower construction ships. While clearly stating that they would not be buying
or running the CTVs themselves, one principal outlined that for now at least
they had found a suitable design for a Jones Act CTV and would back
construction risks by guaranteeing a certain number of days’ employment.

The presenter said it would take two years for delivery of this design, and that
would dovetail with transfer of personnel to existing turbines. There are four
known Jones Act CTVs: a newer one used for Block Island Wind by what is now Ørsted, and three built by SEACOR (aforementioned in last blog post) for ill-fated Cape Wind. One is believed to be in the northeast US presently.

The Rhode Island-built CTV is understood/believed to be busy for Ørsted with any of their four sites listed as “in development” at https://us.orsted.com/Wind-projects

1 – Garden State Offshore Energy, LLC (GSOE), off New Jersey (contracted 2007)

2- Ocean Wind off Atlantic City NJ

3 – Sunrise Wind, 30 miles east of Montauk, NY

4 – Bay State Winds, south of Martha’s Vineyard.

What happens to tonnage like that held by SEACOR, say whether they will they be the first to return, or new boats will be inserted without them, meaning they spend their final days still in Europe?

The principals stress modern equipment and the latest safety gear, and standing on
Heligoland I’ve seen the choppers exercise strenuous safety regimens. They
practice what they preach and one dark-horse factor may be that CTVs become
less important than helicopters.

But, on the other hand, if developers start bringing older tonnage like SEACOR’s and stretching out and retro-fitting, the Block Island Wind’s vessel beyond half a decade, they could stand the risk of looking hypocritical. This is a crux of the building blocks of trust in the relationships between developers and vendors. If it becomes a case of “do as father says not as father does,” then the trust will either be eroded or relationships will be built on sand. (That said, many offshore wind turbines are built on sand…..)

By this I mean that if principals demand new US vendors deliver new-builds (not converted OSVs etc. from the laid up fleet in the US Gulf, which they would naturally prefer to offer), and instead insist that they invest in newly-minted purpose-built vessels, while they themselves cling to boats which for Block Island Winds is going on three years and the SEACOR fleet is also considerably longer on the tooth.

Another item US vendors might find irksome is if EU principals use only their existing supply chain – brokers, designers, builders operating in loco parentis in the US – and thus largely but effectively locking out the Jones Act owners, if not for operational then from buildup phases. We all know that it’s a lot harder to get to the top floor if you miss the elevator in the basement.

The comment that EU principals want to really get to know a vendor before they take a chance on sharing work (that they already know they and their existing vendors can do well) did not go unnoticed. Though relationships have strengthened, the dance continues. And will.

Logistics was a keyword on an assumption that everyone will want to build at once. But a senior leader at Siemens Gamesa earnestly begged representatives of four states to take turns and be passed and even about ordering installation services or everyone will lose out.

Assembly ships – cannot be cost-effectively built in the US nor can the be delivered in a viable time-window of about five years. The fact that Senator Jones and his colleagues created this conundrum 100 years ago to appease Seattle voters by locking outsiders out of the Alaska maritime market (and the  entire US market by extension into it), is not relevant. It’s here, its a Rock of Gibraltar, we all have to deal with it. You can ram it or work around it.

An alternative is the “mother / baby” concept of the behemoth ships – which – build ships assemblers and jack-ups settle into the seabed off New England and  fleet of supply-type boats bring folks and equipment to and fro and to and fro the towers. This can mean some very large accommodation vessels (US prisons and disaster-relief agencies have relied on these) and specialized transfer boats and choppers too.

That means some expensive European equipment coming from afar, assembly on-site offshore perhaps a-la the Block Island Wind episode, and finally a busy shuttle service with smaller vessels plodding back and forth, depending on the depth. (Some murmurs about EU engineering being bought from places like Italy to offshore US Gulf outside US waters for further work and modifications outside USA).

Because of severe weather I often see Fugro and other offshore wind-related foreign and other vessels at anchor either off Newport Harbour west of Goat Island Rhode Island or kind of “hidden” from the wind in the West Passage, between Jamestown and Narragansett / Quonset RI. Here is a photo of one of them on 22 April, 2019, sometimes there are two.

Fugro Ship Jamestown West Passsage 22 Apr 2019 fm Bridge

Several speakers at the later, smaller, engineering-focused event cited positive port offerings at Brayton Point MA, New Bedford MA, Quonset RI and Providence, RI. Presumably each state and port authority and private investors in waterfront real estate
will continue to promote their assets.

The Chancellor of University of Massachusetts Amherst said they have opened access to a campus in Newton (west of downtown Boston) exclusively for wind technology and renewables. Relevant US training academies (there are roughly a dozen including state, federal and private schools), were represented as well. U-Mass. Amherst is already bringing in faculty and moved outside Boston to make it easier for professionals to upgrade their training while working.

Overall, there is movement afoot: while there was not a specific job fair that I saw, the Massachusetts Offshore Wind Supply Chain Directory was being updated, and verbally some leads were passed around softly, almost all of them “Hiring”! Great news in any economy. Most of the principals in the Boston and New England areas have from 20 to 2 job offerings in the USA on their site/s.

As an example, the member of an Offshore Wind startup with 5 employees a few years ago now has over 80.

Boston Mayor Marty Walsh’s team said their goal is to be carbon neutral try 2050. The volume, the demand, the promises, all seem to be starting to be aligned, though far from locked in (a year ago a principle complained about the same folks who enabled development later curtailing it).

It has been three years now since I/we/many from the USA, started to investigate this space as part of a larger vision, long-term investment. Since the Europeans and American have been discussing this, so they do appear to understand each other much better now. While the sector has not disappointed and clearly the authority has been granted, the science and engineering and research are underway, not everyone on the USA side is making money – yet.

Someone described the Cape Wind as a series of starting blocks where everyone lined up eager to get going and each time the gun didn’t go off. Has it gone off in 2019 or is it just around the corner? Most would say the start is long behind us – when the first tower off Block Island Wind generated its first Watt, the business was ignited in real time and has been since.

There’s a joke in offshore sailing that if you can’t identify the functional idiot – the village idiot, ridiculing whom around everyone else unites, then you’re it! Well, it seems if people are still milling around waiting for some kind of gun to off in the US offshore wind, it’s gone off already and time to scramble. Academics can parse when exactly it went off, but the scramble to develop is on.

This author is no expert on geopolitical risk (that won’t prevent him from opining though): with tensions heightening in the Straits of Hormuz and the threat of not just a regional conflict but a global one a sad factor in the modern world, the choke-points at Straits of Hormuz (Iran and UAE), Bab-el-Mandeb Strait (between Yemen and Djibouti), and with concrete carriers apparently (allegedly) being escorted through the Suez Canal to avoid being turned into huge bricks and blocking the canal, alternatives to petroleum and its brittle supply chain are never more welcome. Offshore wind offers a US-made alternative as reliable as Nor’easters in the fall to New Englanders accustomed to the same.

As a professional sailboat captain in Newport several summers, I could set my clock to the breeze filling in from the southwest mid-morning every calm day that the land heated up, and to it petering out at sunset. The wind truly was – is – magnificently reliable on good days.

In conclusion, both conferences were highly informative: one appearing to fly at 70,000 feet, the Mechanical Engineers one very high-level as well, yet a bit more personable with a few hundred persons. Takeaways from both conferences made it clear that major hurdles and misunderstandings between US and EU businesspersons
had been overcome in a comparatively short time (2-3 years) and folks are getting down to the brass tacks. That’s all good for development, full speed ahead!

Keeping you posted as I learn new developments….

2,400 words, Eric Wiberg, Esq., 2nd Edition, 08.15 Monday 17 June, 2019

1,600 words, Eric Wiberg, Esq., 1st Edition, 14.45 15 June, 2019

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