Global Offshore Wind Turbine Installation Vessels Market: Outlook
The global installed capacity of offshore wind power has grown rapidly, resulting in shortage of installation vessels. In 2019, more than 6.1 GW of new offshore winds were added compared to 4.2 GW in 2018. Growing investments in offshore wind power projects followed by lower supply of wind turbine installation vessels are expected to create lucrative opportunities for existing fleet owners as well as new entrants. The vessel required for installing turbine are hired on daily rates basis and can be booked in advance for several months depending on operational requirement. Wind turbine installation vessels (WTIVs) are essentially designed to lift, load, transport and install the offshore wind turbine foundations.
Growing Investments to Harness Offshore Wind Power to Boost the Market
The demand for offshore wind turbine installation is driven by offshore wind power investments. In 2019, the overall cost of producing offshore wind power decreased to 75%. The increased competitive pricing and economies of scale along with the technological development has reduced the overall offshore wind power cost. Thus, majority of players are beginning to shift investments from onshore to offshore wind power. This is expected to benefit the demand for offshore wind turbine installation vessels in the coming years. In addition, growing demand for offshore wind power has resulted in shortfall of installation vessels forcing operators/fleet owners to add new vessels in the next few years.
The market has witnessed demand fluctuations due to COVID-19 impact and international lockdown in several regions. However, post COVID-19, a V-shape recovery is anticipated and with it demand surge and backlog demand ingestion. The surge in the backlog projects is likely to bolster the demand with planned projects reviving in the due course.
High and Ultra-high Capacity-based Wind Turbine Orders to Surge the Demand for Heavy-lift Vessels
Based on vessel type, self-propelled jack-up leads the market. Self-propelled jack-up vessels is highly suitable for installation of small wind turbines (5-8 MW capacity). Self-propelled jack-up vessels can be quickly moved between project locations and can be optionally equipped with welfare facilities, on board cranes, a safety boat or tender and an inclined access ladder. A self-propelled jack up can be utilized for various applications in the offshore marine industry. In addition to offshore wind farm installation, these vessels are very well suited for a wide range of maintenance, construction, and decommissioning tasks.
In the offshore wind power industry, the trend is shifting towards large turbines due to growing investments in high capacity based offshore wind farms. This is expected to shift the demand from self-propelled jack-up vessels to heavy lift vessels for offshore wind turbine installation activities soon. Heavy lift vessel is utilized for lifting and installing high and ultra-high capacity turbine in the offshore wind industry as well as in the oil & gas industry.
Europe Remains the Most Matured Market for Offshore Wind Power
Europe has a total installed offshore wind capacity of 22,072 MW. This corresponds to 5,047 grid-connected wind turbines across 12 countries. Europe is the most mature market for offshore wind, globally. The majority, installed in European waters up to now, are chiefly in the North Sea and Baltic Sea. Currently, Europe is home to 105 offshore wind farms including the world's largest, Walney Extension. Europe is already home to the world’s first floating offshore wind farm, which is located off the coast of Scotland. Spanish utility Iberdrola is heading a consortium aiming to develop a large-scale floating offshore wind turbine in the North Sea. Construction of the project’s floating platform could begin in the second quarter of 2021, with installation commencing in the first quarter of 2022. In Spain, another floating offshore wind project is being planned, although this will use different technology to that deployed in Norway.
In North America, the U.S. is planning a significant investment in offshore wind development in the next few years. Ørsted A/S, one of the players making a play for the East Coast, has few challenges to deal with. COVID-19 aside, the Jones Act is likely to increase the entire projects costthat including installation costs and may cause delays in future U.S. offshore wind projects.
As per Global Wind Energy Council (GWEC), the Asian offshore market is expected to have installed nearly 100 GW of offshore wind capacity by 2030. In Asia Pacific, the demand for offshore wind turbine installation vessels in the last few years has grown rapidly and this growth is expected to continue. In 2019, Asia Pacific placed 90% of global offshore wind turbine orders. More than 75% of worldwide order book accounted for by China. In Asia Pacific, emerging markets for offshore wind energy includes Taiwan, South Korea, and Japan. Apart from China, the Taiwanese government has high ambitions for offshore wind in its energy mix and plans for overall offshore wind capacity to 15.5GW in 2035, up from the 5.5GW in development by 2025.
In Middle East & Africa and Latin America, the demand for wind turbine installation vessels is expected to remain moderate. In 2019, Middle East & Africa added 894MW of onshore wind energy capacity in 2019. However, till now no operational offshore wind farm in Middle East & Africa. Kingdom of Saudi Arabia (KSA) has plans to invest in offshore wind energy near the East Coast of Saudi Arabia. In July 2019, Saipem has signed a memorandum of understanding with Abu Dhabi-based renewable energy company Plambeck Emirates for the design and construction of a 500-megawatt (MW) floating offshore wind farm in Saudi Arabia.In Latin America, Brazil has offshore wind generation potential of 700 GW. Brazil has six offshore wind farms in the licensing phase with a combined capacity of 9,715 MW -- Caucaia Parazinho (310 MW), Asa Branca I (400 MW), Planta Piloto (5 MW), Jangada (3,000 MW), Maravilha (3,000 MW) and Aguas Claras (3,000 MW). However, the completion dates of these projects are TBD.
Global Offshore Wind Turbine Installation Vessels Market: Competitive Landscape
Top five players constitute more than 50% of the market. Key players involved in offshore wind turbine installation vessels market includes: Van Oord, A-2-Sea Solutions Limited, MPI-Offshore, Seajacks, Scorpio Bulkers Inc., Fred. Olsen Windcarrier, Geosea, Jack-Up Barge, SEAFOX, Swire Blue Ocean.Van Oordhas 4 offshore installation vessels out of 68 total vessel fleet.In January 2020, Swire Blue Ocean signed a final contract inclusive of the installation of turbines and transporting vessels in Hollandse Kust Zuid wind farm using its flagship Pacific Osprey wind farm installation vessel. In October 2020, A2Sea’s jack-up vessel Sea Installer has completed the installation of all 42 turbines at the Rentel offshore wind farm in Belgium.