By Matt Tremblay, Senior Vice President, Global Offshore, ABS
The next three years could be a defining period for the U.S. offshore wind sector. It represents a growth area of the maritime industry at both a domestic and international level. Globally, developers have announced projects totaling at least 200 GW of new capacity since the beginning of 2020, according to a report by RCG, which indicates that the active project portfolio for offshore wind developers now stands at 500 GW.
After a period of relatively slow progress, the U.S. government under the Biden Administration has re-focused efforts to promote renewable energy development with a goal of 25 GW of generating capacity installed by 2030, and to review more than a dozen lease area construction and operations plans (COPs) by 2025. The growth potential of the U.S. market is further supported with the findings of a recent ABS poll, where nearly 90% of respondents believe offshore wind will play a significant role in sustainable U.S. energy strategy.
To support this ambitious activity, the White House announced in March 2021 that grant and funding resource opportunities related to offshore wind have been designated by the U.S. Department of Transportation Maritime Administration as well as the U.S. Department of Energy Loan Programs Office.
Getting to grips with the supply chain
Momentum is building, and stakeholders are accelerating their plans for engagement into the United States. While the U.S. market waits for its first Jones Act-compliant turbine installation vessel, it needs to keep a watch on Europe, where the supply chain may also face vessel constraints. It is a critical time across the U.S. supply chain in which U.S. developers will need to rely on European suppliers that are already in high demand to begin to meet U.S. offshore wind plans. Meeting the 2030 target will catalyze significant supply chain benefits, including new port upgrade investments totaling more than $500 million; one to two new U.S. factories for each major windfarm component including wind turbine nacelles, blades, towers, foundations, and subsea cables; additional cumulative demand of more than seven million tons of steel — equivalent to four years of output for a typical U.S. steel mill; and the construction of four to six specialized turbine installation vessels in U.S. shipyards, each representing an investment between $250 and $500 million.
Constructing and commissioning of a U.S.-flagged vessel is essential but concerns are being raised by offshore wind developers if they will face higher costs. A U.S. vessel is unlikely to be built without the confidence that the vessel is used to full capacity and in most cases a vessel is likely to need 500 MW to 800 MW of annual capacity installation for at least five years in order to balance the books.
Is compliance a necessary hurdle in the expansion of the U.S. market?
Compared to the European offshore wind vessel market, the U.S. market is different. Firstly, there is the Merchant Marine (Jones) Act of 1920, which is a U.S. trade law that defines how maritime commerce is regulated.
Specific restrictions limit the transfer of cargo between U.S. ports to vessels that are registered and built in only the United States. Ownership of these vessels must be by majority U.S. incorporated entities with U.S. citizen representation. Onboard vessel crews may use only United States Coast Guard (USCG) credentialed mariners and a majority of U.S. citizens.
In 2016, the commissioning of a U.S. offshore project – Deepwater Wind’s 30-MW Block Island wind farm – located near the Rhode Island coast illustrates the challenge which current U.S. operators face. With a lack of U.S. vessels, developers contracted a vessel from Europe, but the Jones Act meant that the vessel was prohibited from entering U.S. shores to collect and transport wind turbines, towers and blades. To overcome this issue, smaller U.S.-flagged liftboats were used that delivered wind turbine equipment out to the site, where it was transferred to the European jack-up vessel, which inevitably increased the cost and complexity of the project.
While the U.S. Customs and Border Protection agency (CBP) holds ultimate responsibility for making rulings on whether a specific trade activity is subject to the Jones Act, the USCG determines whether a vessel is U.S.-built and therefore eligible for Jones Act trade. USCG has determined that “U.S.-built” can be achieved if all major components of a vessel’s hull and superstructure are fabricated in the United States and the vessel is assembled entirely in the United States.
Companies outside of the United States that form the supply chain, including component manufacturers for engines, propellers and certain hull elements are not included.
Construction of a vessel to U.S. standards and certification by USCG may be achieved outside of the United States for international trade but it is not eligible for Jones Act designation unless specifically permitted via a formal waiver process. Presently, waivers are rare and typically granted for national defense or emergency justifications.
A 12-point guide
More dedicated vessels are essential for the future success of the US offshore wind market, and a global supply chain can help the U.S. offshore wind market to flourish. In a fresh look at the here-and-now situation, a detailed assessment and awareness of the compliance and safety requirements of a vessel and its crew are provided in a new industry report released by ABS, which highlights:
- How does the Jones Act impact offshore wind support vessels?
- What are the central elements of U.S. regulations for vessel design, construction and operation?
- Which departments are responsible for maritime safety?
- Can vessel designs previously approved by other Flag authorities in accordance with IMO and with International Standards be considered?
- How are wind turbine technicians, offshore workers and crew viewed in U.S. regulation?
- What are minimal safe manning requirements?
- What are the primary distinguishing crew licensing elements for U.S. registered vessels?
- Are there unique U.S. requirements for vessel stability?
- What are the certification and registration requirements for a vessel in U.S. operations?
- How are U.S. regulations applied for diesel engines in small workboats?
- What are the implications for crew transfer vessels?
- What are the requirements for crew berthing conditions and onboard design considerations?
Is a change of mindset on the horizon?
There is no question: Change has to happen. As the industry begins to expand and country decarbonization targets need to be met, construction and maintenance of offshore wind projects calls for a combination of expertise that is comparatively new to the U.S. market and requires a variety of specialist support tonnage. A dedicated U.S.-flagged installation vessel will be efficient and cost-effective by loading all components at a U.S. port on one vessel. To use a foreign, non-Jones Act installation vessel, components from a U.S. port must be transported by a U.S. built feeder vessel. Other wind support vessels such as a Service Operation Vessel (SOV), floating heavy-lift vessel, and Crew Transfer Vessel (CTV) operating in U.S. offshore wind farms are also required to comply with the U.S. regulations.
However, what is clear is that members of the maritime world and the offshore wind industry at large, need to increase their dialogue and collaborative efforts, and fast, to drive forward the required development of the U.S. offshore wind market to reach the Biden Administration’s offshore wind targets. But action is needed now – not tomorrow.
Matt Tremblay is Senior Vice President, Global Offshore, for ABS. You can view the “Safety and Compliance Insights: Understanding U.S. Regulations for Offshore Wind Vessels” report here.
Filed Under: Featured
Gerald F Dycus says
A question, why are the WTs not on easily moved trimaran like hulls? Then you build the WT and major repairs in port where it is far cheaper. Just build a tug that mates to the rear of the center pontoon and cruise out, back in at 15 knots.
If more costly to build the ship, labor cost savings is huge.
Building large ships and manning them is costly and not necessary in most cases as easier ways to do it with innovative design. J.
Uynh Pham Phu says
First of all, I would like to send you respectful greetings.
Ladies and Gentlemen,
Energy determines the existence and development of society. Without energy, all economic sectors are depressed, production and business … are stagnated, their material and spiritual lives plummeted, leading to an increase in social conflicts … Therefore, many countries prioritize the development of energy. Countries that are poor in investing in energy become lagging …
In the past few centeries, mankind has made great progress, primarily thanks to hydroelectric energy, thermal power and nuclear power. But these energy sources increasingly reveal many disadvantages, causing unpredictable consequences. Hydroelectric energy destroys forests, causing serious floods. Thermal power pollutes the environment, causing greenhouse effect. One million tons of coal emits more than 3 million tons of dust, of which more than 2 million tons of CO2, SH2 … Nuclear power causes unsafety from the selection of uranium to the hiding of nuclear waste. Trecnobun 1987 in the Soviet Union and Fukoshima 2011 in Japan was a painful lesson, so people in many countries opposed this energy.
Nowadays, mankind wants to replace traditional energy with renewable energy such as wind energy, solar energy, biology, biomass, tide, waves, ocean currents … but there are still many difficulties and obstacles. Mainly wind energy, solar energy, marine energy with infinite potential, but exploiting it is not easy. Tidal energy, ocean waves, currents have been invested by a series of countries such as Portugal, Spain, France, England, Ireland, and China … to invest billions of dollars, but less prospect, too expensive, because there is no effective invention. Solar energy in 1952 extracted 6%, in 2015 extracted 18%. Although the price is now cheap, there are many potential advantages and disadvantages. Wind energy is developed very strongly, but mainly the horizontal axis wind turbines invented by Muslims in the Middle East in the 17th century is outdated in principle, the price is too expensive, it is difficult to recover capital, but is calculated to inflate the capacity many times to trick consumers. A series of new vertical axis wind turbine patents intend to replace the horizontal axis wind turbines, but cannot replace it, because the drag is close to the impact force, because one wing catches the wind, the other is blocked by the wind.
Through more decades of theoretical research, in fact, with hundreds of experimental models, I discovered many shortcomings of the horizontal and vertical axis wind turbines, detecting the error of Betz coefficients from the 1970s and has found the invention No. 9561: “New solution for the designing equipment to exploiting wind energy according to hinder principle of sails, symbol DRD3n. HTHG4m”, very high efficiency, 10 times cheaper than world wind turbines. But because Vietnam was extremely poor and backward, heavily exploited by the colonialists, cruel wars against France, America, China, and Ponpot of Cambodia were again embargoed. The development is being translated by Covid, so things face many difficulties …
I believe: if my invention 9561 is put on an industrial line, the investment price is 10 times cheaper the current wind turbines, the price will be 4 cents/KW cheap, opens a turning point and will replace the wind turbine worldwide.