The U.K.’s National Subsea Research Initiative (NSRI) said operations and maintenance (O&M) services—particularly inspection, repair and maintenance (IRM) activities—offer traditional oil and gas industry-orientated subsea players “the highest potential to diversify into offshore wind.”

With global offshore wind expenditure forecast to reach $264.88 billion over the next 10 years, the NSRI said it and Offshore Renewable Energy (ORE) Catapult have joined forces to encourage this very avenue of diversification.

“Around 40% of the typical life-cycle costs of offshore wind farm developments come from O&M requirements. Based on U.K. government projections for offshore wind deployment, the O&M costs for more than 5,500 turbines could be worth $2.52 billion per annum by 2025,” the NSRI’s Subsea Technological Challenges in Offshore Wind report said.

“Given the U.K. industry’s existing IRM capability, companies could break into the offshore wind market by offering individual services such as automated inspection, cable scour inspection, condition monitoring, remote monitoring, increased turbine access and risk-based inspection.

“In time, these services could be bundled to deliver a full life-of-field offering. It’s also believed that diverless solutions will be of growing interest as offshore wind developments move further offshore into deeper waters.”

The ideas generated from workshops run by the NSRI and ORE Catapult enabled the NSRI to create a “technology roadmap” to help subsea players break into the renewables market.

Growing Market, Exciting Opportunities

“Offshore renewables is a growing market, which presents exciting new business opportunities for the U.K. supply chain. While fossil fuels are expected to continue dominating the global energy supply mix, renewables are taking off at an incredible rate,” said Gordon Drummond, project director of the NSRI. “There are some natural synergies between the sectors, which provide a real advantage for subsea companies looking to expand their presence in multiple energy markets.

“The offshore wind industry is focused on innovating to reduce costs, giving subsea companies the chance to introduce new technology and products to the industry. Diversifying into renewables provides greater resilience for companies and those who take an early lead will reap the benefits.

“The return on investment for renewable projects can be achieved significantly quicker than those in the oil and gas sector, representing a natural, highly profitable diversification strategy.”

Jamie McCallum, project engineer at the NSRI, added, “Companies experienced in ROV operations, subsea construction and IRM need to jump into action and adapt their offerings now if they are to meet the needs of the sector and drive long-term growth. The largest opportunity for the U.K. subsea supply chain is operations and maintenance.

“Europe is most definitely leading the way in offshore wind. However, China, Japan and the U.S. are growing markets, which present a host of opportunities for U.K. firms over the next five to 10 years,” McCallum said.

Supply Chain Benefits

With regard to openings in the supply chain, the U.K.’s large concentration of subsea expertise has placed the region at the forefront of the global subsea sector, Subsea UK’s CEO Neil Gordon told SEN.

“However, the industry’s enduring success is based on its ability to maintain and grow its exports and exploit increasing diversification opportunities,” Gordon said. “Subsea UK is encouraging companies to expand into the renewables sector to sustain long-term growth.”

Gordon added, “The sustained low oil price, coupled with the predicted renewables boom, means the energy industry is being forced to evolve. Subsea companies can support the development of the offshore renewables sector in a number of ways, from project management and installation support to maintenance and inspection services.”

The oil and gas industry can put innovations and improved processes developed over decades to use in the renewables sector, he continued, pointing out lower costs, standardization and faster deployment techniques.

“A cohesive and collaborative supply chain can have an impact on reducing the cost of producing renewable energy for the long term, both in terms of wind farm installation and ongoing maintenance,” Gordon said.

Innovation Challenges

The NSRI has being working with ORE Catapult to identify a number of specific technology innovation challenges in a bid to encourage subsea companies “to focus their efforts on the resolutions, which will help drive down the cost of offshore renewable energy and have a positive impact on the U.K. economy.”

“They are looking for companies, both large and small, to help address the associated challenges, working collaboratively with technical experts to develop ideas into market-ready technology,” Gordon added.

“The innovation challenges are spread across six broad themes: blades, electrical infrastructure, foundations, operations and maintenance, powertrain innovation, wave and tidal.”

Gordon said Scotland and the rest of the U.K., together with Germany and Denmark, are at the forefront of offshore wind development, accounting for about 90% of global offshore wind deployment to date. With the Netherlands and Belgium, these countries are forecast to build about 25 GW of offshore wind by the end of the decade. The estimated capital and operational expenditure over the next five years is worth an estimated $76.1 billion, he noted.

“With a realization that cost reduction will be critical to achieving these forecasts and maintaining offshore wind’s growth in the longer term, incorporating best practice from other sectors will be key. Companies need to plan their diversification strategy carefully, grasping opportunities as quickly as possible to ensure the U.K. leads the way and gains a competitive advantage over global industry players.

“There are opportunities for subsea firms to make their mark in the offshore wind sector now,” Gordon told SEN.

Reinvention Required

To diversify into renewables, companies must reinvent themselves to a degree, adapting their capabilities and operating models, Gordon added.

The water depths for offshore wind turbines are typically shallower than depths of oil and gas projects. This raises issues such as managing cable installation in stronger current strengths and wind speeds.

“Success will depend on companies’ ability to focus and transform their offerings based on where their expertise lies and how it can be applied to the renewables market,” Gordon said.

—Steve Hamlen

Offshore