The demand for Service Operation Vessels (SOV) has increased by 20% year-on-year since 2016, according to Spinergie analysis.
A critical factor in this demand increase is the rise of offshore wind and the suitability of SOVs, in comparison to others, for this work, especially in the harsh weather conditions present in high-activity offshore wind markets such as the North Sea.
Indeed, the North Sea continues to be the largest SOV market. As a regional comparison for vessel count, the North Sea contained 31 SOVs in October 2022 compared to 2 in China/East Asia and 1 in Southeast Asia/Australia. Therefore, here our main focus is the North Sea.
The SOV market as it stands today
In October 2022, offshore wind continued its trend as the dominant market for SOVs with 60.4% utilisation, compared to the 16.7% utilisation for SOVs in oil and gas. Within offshore wind, most vessel days are for O&M operations rather than construction support. O&M work is generally contracted after the commissioning, or first power, phase on a wind farm. As these vessel days correspond to long-term O&M campaigns, which are conducted after construction, they can generally be seen as a function of operational turbines. In all, an average of 11.7 OSVs (including both CTVs and SOVs) days are required for O&M on offshore wind. In 2021, 8.6% of total days were delivered by SOVs.
Construction support work has also seen a healthy uptick: around 10% year-on-year over the past eight years. As these construction support days are required during the construction of the wind farm, to support the installation of turbines and foundations, they are generally seen as a function of heavy-lift vessel days required per year.
Orsted, which primarily focuses on developing offshore wind farms in the North Sea, is the main operator of SOV time in the global fleet with 2,754 days over the past 12 months, all for the offshore wind market. The second operator is TotalEnergies, with significantly fewer days at 740 but all for the oil and gas segment. In terms of vessel management, Siemens Gamesa has secured the most working days over the past 12 months (2,271 in wind/17.3 in oil and gas) but is closely followed by Vestas (2,107 all wind).
Why are SOVs better suited to offshore wind operations?
SOVs are built to withstand more harsh weather than Crew Transfer Vessels (CTV) or catamarans, which makes them significantly more resilient to seasonality. While CTV/catamaran utilization tends to plummet during the winter months and hard weather windows, utilization of SOVs tends to remain constant or even increase. This is one aspect of how SOV time spent working on wind farm projects can be maximized.
A further factor that can maximize SOV time on wind farms is that, unlike CTVs, SOVs have accommodation on board. This means that stays of a few days offshore at wind farm sites lying further from shore are possible.
On a related point, SOVs can travel longer distances than CTVs, which are predominantly limited to their build locations. For example, most of the CTVs in the North Sea are based on UK shores. This is why in 2020, the UK accounted for only half the SOV demand compared to Germany, despite having twice the installed capacity of wind farms.
Converted vessels have the advantage on newbuilds
With demand rising in the SOV space, the market has seen an uptick in the number of vessel conversions. Platform Supply Vessels (PSVs) are the best candidates for conversion into SOVs due to their structural characteristics and their sufficient generating capacity for additional energy demand. PSVs offers a large deck area ideal for new equipment installations such as walk-to-work gangways, accommodation modules, helidecks, and sister ships.
Converting an existing PSV to an SOV has a number of advantages compared to newbuild vessels. First and foremost, it is a cost-effective method, allowing for major savings on emissions.
Data extracted from Spinergie’s SpinConstruction shows that emissions from converted units are estimated at up to 6,000t CO2e compared to the 25,000t CO2e that would arise from a new build unit due to the transportation of materials involved in the latter.
In addition, a conversion project is usually completed in less than six months, compared to the two years that are required on average between the announcement and delivery of a new build SOV.
Since 2016, seven PSV hulls have been converted to SOV to support offshore wind projects. Included in that number are three units currently undergoing that conversion. The Norwind Breeze, formerly, MMA Responder (deck area: 830m2), and Koenigsborg, formerly Hermit Viking (deck area: 850m2), are located in Norway and the Netherlands, respectively. The third, announced more recently, is Norside Cetus (deck area 840m2), which is currently being converted to an SOV with ESS (Energy Storage System) for OSM Offshore at Ulstein Verft Yard, Norway. Previous conversions include REM Energy (2021), Orient Constructor (2021), Northern Ocean (2021), and Norside Supporter (2020).
Demand for SOVs is expected to continue to rise
Theforecasted uptick in the wind market means that more conversion activity will likely be required to meet th demand for SOVs. Spinergie analysis indicates that the number of operationalwind turbines in Europe and the US will increase three-fold by 2030. By this metric, we can consider a couple of scenrios for how this will impact SOV demand in the future.
Spinergie has devised two scenarios: high and low. The high scenario suggests that SOVs will dominate O&M vessel demand in the North Sea, with penetration rising to 30%. This scenario suggests that 60% of the total SOV supply continues to be engaged in the O&M market. The low scenario suggests “business as usual,” and SOV penetration will remain at current levels with only slight growth from 8.6% to 12%. Fleet utilization will also remain constant at 2021 levels.
Further insight into the SOV market can be found within the SpinConstruction database. Monitor SOVs in real-time while leveraging Spinergie’s contextual data to understand better vessel activity at fields, blocks, and wind farms. Contact us for a demo today.