Wind power surges as custom ships cut costs

LONDON — Offshore wind-power producers from Dong Energy to RWE are building custom ships at record rates to reduce the cost of the technology that’s three times as pricey as electricity from coal plants.

As many as 20 vessels, some with movable legs that reach the seafloor, will come onto the market in the next few years, reducing chartering costs of as much as 200,000 euros ($261,000) a day, said Marc Seidel, an offshore engineer at Suzlon Energy Ltd., which supplies turbines to Germany’s RWE.

A lack of specialized installation ships has forced companies to hire barges designed for oil exploration, holding up work at projects such as EON’s Robin Rigg wind farm off Scotland’s western coast. The British government estimates that offshore wind may contribute more than 35 billion pounds ($55 billion) to the economy by 2050 if costs are cut quickly enough.

“Having these vessels is the difference between being able to build the projects that we’re all looking at today and not,” Paul Coffey, chief operating officer of RWE’s Innogy unit, said from Swindon, England. “They allow you to operate in higher water depths, in more inclement water conditions. They allow you to get the job done faster and more safely.”

In the early 2000s, developers had to “beg, steal and borrow” vessels from other industries to get projects completed, Coffey said. Essen-based RWE won rights with SSE, Norway’s Statoil and Statkraft to develop the Dogger Bank wind park 100 kilometers (62 miles) off eastern England in Britain’s third licensing round. Dong had a similar struggle.

“We applied equipment across all elements of the supply chain that were developed for something else,” Dong’s head of renewables construction, Christina Grumstrup Soerensen, said by phone. “We put land turbines out at sea, and we used vessels developed for the exploration and production industry, or bridge-building equipment.”

The new ships allow developers to install turbines in deeper waters, lift heavier weights, cope with bigger swells and carry more machines out to wind-farm sites, speeding up project completion.

A utility can earn 10,000 euros operating a 6-megawatt turbine on a “good wind day,” said Thomas Karst, an industry adviser with Make Consulting in Aarhus, Denmark. “If you can have 10 turbines up a month earlier on a project, that’s 3 million euros in your pocket from early generation.”

While sea-based wind power is among the most expensive forms of renewable energy, countries including Britain have promoted large-scale projects to add jobs, harness the stronger winds offshore and lessen the noise and visual impact of turbines on nearby communities.

Offshore wind costs about $232 a megawatt-hour of power generated, according to data from Bloomberg New Energy Finance. That compares with about $80 for onshore wind, $62 for gas-fired plants and $77 for coal. The government supports the industry with incentives for power produced by renewable energy sources.

“If we gave away our turbine for free, we would not even be close to the price of coal,” said Jesper Moeller, head of offshore engineering for the wind division of turbine manufacturer Siemens. The Munich-based company supplied the majority of machines installed at sea in Europe last year.

RWE spent 200 million euros on two custom-made craft that can operate in waters 45 meters (148 feet) deep and are due to begin work in June and July. The vessels, known as jackup barges, have platforms supported by legs that can be adjusted to fit different water depths and heights for the towers that support wind turbines.

“We didn’t want to be in a situation where we couldn’t choose when to build our wind parks,” Coffey said. “We don’t want to be at the back of a very long queue for a vessel.”

A2Sea, a Siemens-Dong venture which is installing turbines at the 1-gigawatt London Array, the world’s largest approved offshore wind park, initially operated two old container ships adapted with cranes and legs, according to Chief Executive Officer Jens Frederik Hansen. The venture now has two larger vessels with another due this year, and on March 23 announced a $155 million deal to have a fourth built by 2014.

“The larger vessels will be fully booked at least until 2020,” Hansen said. “The smaller vessels will go into the service area probably for maintenance.”

MPI Offshore, owner of the industry’s first purpose- built vessel, the Resolution, turns away “lots of enquiries” from developers, said Managing Director Peter Robinson. Britain’s Centrica has the option to use the Resolution until 2016, and a further MPI vessel has been chartered by Germany’s EON for six years when it completes its current task.

Europe will install about 10.4 gigawatts of offshore wind turbines from this year through 2015, more than 70 percent of the global total, according to New Energy Finance. From around 2015, British developers will start building the country’s third round of offshore wind farms, which are typically further from the shore and in deeper waters than current projects.

“These Round 3 sites are going to kick in by 2015, 2016 and beyond, creating even greater demand on vessel capacity,” MPI’s Robinson said in an interview.