Background
The US Offshore Wind industry is on a cusp of explosion. Spinergie expects the country's operational capacity to balloon from 42 MW today (2022) to 22,000 MW by 2030 – a whopping 500x growth in seven years! While several projects are under planning, the availability of vessels is scarce in the region, and the market seems to be relying on borrowing supply from the North Sea for the foreseeable future.
The obvious problem with this plan is that the North Sea does not have vessels left to spare. With its capacity expected to grow five-fold to 176,000 MW by 2030, vessel utilization in the market is currently at its highest (70%) – even as the supply continues to grow.
This supply deficit represents a major opportunity for American vessel managers to introduce purpose-built assets in the market, while also diversifying their revenue streams by establishing their early presence in a burgeoning sector.
Challenge
To finance the construction of a new vessel, the client needed to develop a business case for investing in these new assets. For this, the client needs to have a full picture of the current state of the offshore wind sector, and its growth in North America. Furthermore, a forward-looking view of how demand and supply will develop in the next five to eight years, in the US and globally.
The Client reached out to Spinergie to gain a better understanding of the market as well as the FIV supply and demand dynamics in the region.
Spinergie's Solution
Spinergie's Market Intelligence product has exhaustive coverage of more than 10,000 vessels involved in every stage of wind farms development from pre-qualifying surveys to commissioning, O&M and decommissioning. The movements of these vessels are constantly monitored, and further enriched with contextual information about individual activities (cable laying, geophysical surveys, installation campaigns, …) and all publicly disclosed information.
Demand
Spinergie's Offshore Wind Forecast provides an exhaustive forward-looking view into upcoming US demand. This comprehensive demand forecast helps answer various questions:
- How many vessels will be required and when?
- Which developers will require vessels, and when?
- What sizes of foundations will need to be installed?
- How will purpose-built vessels leverage competitiveness?
Capacity to be commissioned each year: Spreading out all the identified projects, and their announced schedules, gives visibility into upcoming demand for each single year. This is further enriched by analysts' insights into the likelihood of these projects to stay on schedule, based on historical trends, such as developer experience, project specs, vessel availability and current progress among others.
Number of foundations to be installed: The forecast is then converted to the number of foundations to be installed each year. This is a significantly different trend than the previous forecast, as the foundation installations can begin up to three years before the final commissioning date of the wind farm. Thus, correct calculations of this number are crucial for calculating the “true demand” for vessels.
Exact number of vessels needed: This is further translated to the number of vessels required each year, based on estimated number of working days required, typical utilization levels of vessels, and the types of FIVs that will perform these installations.
Supply
Calculations were made to determine supply side dynamics, from optimum size of the FIV to competitiveness in the market.
Optimum crane capacity: The Wind Vessel Lifting Model feature in Spinergie can be used to identify all the vessels – active or under construction – capable of installing foundations or turbines of any specific size. This model was used to measure the supply demand gap for upcoming US wind farms. This analysis further helps the Client decide which size category of wind farms are undersupplied.
Competitive Scenario: Provides a list of all the vessels available to serve the US offshore wind market, along with their forward-looking schedules. This helps further narrow down how much of the supply is actually tied up in commitments to existing projects in the North Sea and East Asia.
Result
The resulting study was received very positively by the Client. The results not only matched but further enriched Client's existing findings (obtained from an expensive internal study) and were produced in a fraction of the time.
It was presented to the Board members along with the business case proposal, for final strategic considerations on the financing decision. The study was later used to present the investment case to seek funding for the project.
Additionally, the study helped the Client identify and initiate partnerships with developers planning wind farms in the area – and seek future contracts.
