Sectors with are available niches will be opening up in the US OW Supply Chain. How can companies position themselves to exploit existing strengths?
In our last blog, we saw that there were constraints on the development of the supply chain for US Offshore Wind. Probably the most challenging one is the Jones Act, which we have covered in various blogs. Other areas look more fruitful to enter the supply chain or collaborate with US partners.
Skills and Training
US enterprises will need trained and experienced labour, in both the installation and operations phases. Although some people possessing these skills will be available from the oil and gas industry, labour shortages would be reflected in higher wage competition to attract top employees. These are primarily older professionals, many near to retirement. It surely makes more sense to train new, young talent to ensure they are going to be with the industry for a long time and some of whom will grow to be Offshore Wind leaders of the future.
See our earlier blog about jobs and training in the OW industry. It used research from JEDI (Jobs and Economic Development Model) of the building and operation of a 1600 MW wind farm concluded that the first two phases would create between 2,279 and 3,171 direct job-years, plus another 7-9000 supply chain and local economy jobs, and O & M would create a lower number of 964 – 1,748 annual job-years during the operation of the array. Many of these would be new workers as it is uncertain whether workers will be able or willing to transfer from O & G or fishing industries.
So a training programme will be necessary. The most viable option is partnering with Further/Higher Education Institutions in the USA to offer vocational training for people wishing a career in the industry, - preferably linked with an apprenticeship, internship or graduate entry programme to incentivise participants with a job offer at the end of it.
As wind turbines get larger, the difficulties of transporting them become greater. Although most of the early projects will have turbines made in Europe, like the Block Island Haliades, and shipped to the location, but that will undoubtedly give way to US OEMs entering the field, especially as they are already manufacturing onshore turbines.
Wood Mackenzie already noted in a report in January this year that bottlenecks were looming in the onshore renewables and most of those issues relate to OW as well: “looming unforeseen supply chain bottlenecks could lead to project cancellations and postponements, putting as much as $2.1 billion of revenue at risk.”
- Specialised Trailer capacity is maxed out.
- Expert drivers for oversized loads are in high demand
- Rail capacity is limited due to being needed for transporting other large items
- Some OEMs should share their dedicated railcars
- Planning and coordination is necessary to spread the transportation load, so it is not crowded into a limited installation window
Cabling, Transmission, Logistics
This is another area where the US industry is a fledgeling. Offshore wind is going to need a lot of intra-array and export cabling, landside substations and grid connections, as well as all the smaller but still essential systems that will be required, for example, monitoring instrumentation. Many suppliers across the globe have the expertise to provide these products to the offshore wind industry, and of course, they have been tested in existing arrays.
There will also be advances in software for enhancing installation, as well as monitoring operations and energy production, as well as new, advanced systems incorporating AR and "digital twins" of the turbines, to forecast problems before they occur.
Logistic networks will also need to be put in place, to supply the components to where they are necessary. Modern systems are now pioneering blockchain technologies to seamlessly monitor the progress of parts across the globe, without paper, human error, or other inefficiencies due to outdated methods: “But today there is a significant amount of trapped value in logistics, largely stemming from the fragmented and competitive nature of the logistics industry. For example, in the US alone, it is estimated that there are over 500,000 individual trucking companies. With such a huge number of stakeholders involved in the supply chain, this often creates low transparency, unstandardised processes, data silos and diverse levels of technology adoption.”
Environmental Surveying, Simulations and Testing
Before a turbine can be put into the water, it needs to be designed and tested. Much work needs to be done surveying the site and analysing the environmental effects of the wind farm to be built. Again, here in Europe, many organisations are adept at these processes. This is not the case in the USA, and there will be a need to create new facilities specifically for the US market. It is to be expected that the environmental and weather conditions will be different off the US coastline. Marine flora and fauna are diverse, fish shoaling and migration, as well as the infamous hurricanes and tornadoes which have ravaged parts of the states in the last few years, will need their own investigation and analysis. Partnerships between experienced non-US universities, OW developers, environmental groups, and other stakeholders will be necessary.
Testing tanks and computer simulations will be needed. At the very least, two test centres will be required, one in the NE Atlantic area, and one off the Pacific Coast later on, as it would be too expensive to move a large turbine across the continent simply to test it.
Ports, Docking and Support
Although this is probably more a straightforward US issue, as the country possesses everything necessary, new facilities will need to be built or existing ones upgraded to service the installation and maintenance of offshore arrays. Investment of €0.5-€1Bn (US$0.45-0.9Bn) will be required in the next few years to enhance European ports to service the existing OW industry, add new turbine arrays and repower old ones.
The US industry is not as developed but nevertheless will need to invest in port facilities if it is to grow strongly in the next few years. Cranes, assembly areas, warehouses, docking for jack-up or DP vessels and a myriad of other facilities will be needed. According to the Floating Wind Joint Industry report "few European ports are capable of accommodating all the quayside manufacturing and assembly required for building and operating large-scale floating wind farms." If the US moves towards floating wind, as some commentators think it might, then new facilities will be essential.
This is another area where the US might need advice and consultancy from existing operators on this side of the Atlantic. So there will be potential input into the sector from experienced consultancies with knowledge of best practices and how to implement them.
Entering the US supply chain will be discussed at the 4th Annual US Offshore Wind Conference, June 10-11, 2019 in Boston.Click here to read more about the Boston US Offshore Wind 2019 Conference and Exhibition.