It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Saturday, June 17, 2023
Manpower Shortage Could Derail UK’s Offshore Wind Industry
UK needs more trained professional to support the growth of its wind industry (file photo)
As the UK moves into its next phase of growth for its offshore wind energy industry, a new report warns the industry risks being derailed by a lack of manpower. They are calling on the government to develop a strategy to ensure a skilled and diverse workforce is available over the next seven years, a period in which jobs are forecast to exceed 100,000.
The Offshore Wind Industry Council (OWIC) asserts that for the UK to maintain its leadership in offshore wind, a strategy to tackle skills shortages in key areas such as planning and consenting, high voltage electrical technicians, engineers, turbine technicians, and those with a range of digital skills is urgently needed.
The report highlights that the government increased the target from 30 GW by 2030 which had initially been set in the Offshore Wind Sector Deal of 2019. They however contend that addressing the skill gaps in the immediate and medium term is critical for the country to attain its new target of reaching 50 GW of offshore wind capacity by 2030, including 5GW of floating wind up from the 13.6 GW of connected offshore wind energy today.
OWIC, a government and industry forum established to drive the development of the offshore wind sector in the UK, has produced a report that shows that to manage the expected offshore wind project pipeline, the industry needs to be able to attract and retain an average of 10,000 people per year. In the long term, they contend the government needs to roll out a STEM engagement plan with young people to guarantee the availability of skilled manpower for the industry.
According to the report, the industry is forecast to employ 104,401 people by 2030 to meet current targets, an increase of 6,936 since last year’s forecast. Currently, the workforce has increased to over 32,000, up four percent compared to the end of 2021 including 17,000 direct jobs and nearly 15,000 indirect jobs. In the short-to-medium term, rapid growth in jobs is needed as several offshore wind farms progress to the construction phase, with 88,509 jobs required by 2026, which is over 56,000 more than today’s workforce.
“The offshore wind sector needs many more people in the short, medium, and long term to power ahead. All of us – across industry and government – need to work even closer together to develop a bold new strategy that attracts all the skills we need to surge ahead as fast as possible,” said Richard Sandford, OWIC Co-Chair.
The UK has established itself as a global leader in both fixed-bottom and floating wind. Currently, the country has the second-biggest operational offshore wind capacity and the second-largest offshore wind pipeline, second only to China which recently surpassed the UK in the level of installed offshore power generation.
This week RenewableUK released market intelligence data showing the country’s pipeline of offshore wind projects has reached 98 GW, up from 91 GW a year ago. China has a pipeline with 157 GW, followed by the U.S. in third place with 82 GW, Sweden is fourth with 75 MW, and Brazil fifth with 63 GW.
“To ensure we can meet the existing ambition, it’s essential for us to work right across our own industry, across adjacent industries with transferable skills, and with the next generation, to make offshore wind an attractive career choice for people from the widest range of backgrounds and with a whole variety of different skill sets,” said Jane Cooper, RenewableUK Director of Offshore Wind.
OWIC highlights the UK has committed to increasing the proportion of women working in offshore wind following an increase of 4.6 percent since 2019 to 20.6 percent of the workforce. The ultimate target in line with the government in the Offshore Wind Sector Deal is a third of all workforce being women.
Progress is also being achieved in ensuring the industry becomes more diverse in terms of ethnicity. Currently, seven percent of the workforce is from non-white backgrounds compared to 3.8 percent in 2021. The industry has committed to meeting the target of nine percent of workers from ethnic minority backgrounds in 2030.
Cadeler and Eneti to Merge into Leader in Wind Installation
Cadeler's Wind Osprey will be part of the largest installation fleet after the merger (Cadeler)
Cadeler and Eneti, two emerging wind turbine and foundation installation companies, announced plans to merge into a powerhouse company that will have global reach and could control as much as a quarter of the market. According to the companies, the merger responds to the emerging trends in the offshore wind sector where customers have increasingly complex projects as the size of wind turbines grows and the sites become more challenging.
“The combination will represent a significant step up in our ability to meet the increased demand globally for projects with larger scopes and project sizes in service of the much-needed green transition,” says Mikkel Gleerup, who is being credited with engineering the combination and will continue as CEO of the combined company which will be known as Cadeler. “We will provide our customers with the largest and most diverse fleet in the industry.”
Terms of the stock-for-stock combination call for Eneti to merge into Cadeler at a rate of just over 3.4 shares to 1 creating a combined company with an estimated market value above $1.3 billion traded on the New York and Oslo stock exchanges. Cadeler’s investors will hold 60 percent of the combined company while Eneti’s shareholders will represent approximately 40 percent if all the shares are tendered. Cadeler intends to conduct a “squeeze-out merger” once it has 85 percent of Eneti’s shares.
Cadeler traces its history back 15 years formed as a combination of shipping and engineering for the offshore sector. Today, its largest investors are BW and Swire-Pacific. Eneti was the rebirth of the former dry bulk operator Scorpio which just two years ago announced it would enter the business divesting of its bulkers and later acquired Seajacks to accelerate the transition into the offshore sector. The deal brings together two well-known leaders in the shipping industry with Andreas Sohmen-Pao continuing as Chairman of Cadeler and Emanuele Lauro transitioning from CEO of Eneti to Vice Chairman of the combined company.
Sohmen-Pao highlights the strategic nature of the combination which the companies said have complementary fleets and will gain a global presence, and the ability to operate more efficiently, and target larger projects. Lauro cites the value in the combination and changing demands of the industry.
Combined they report they will have the largest and most diverse fleet of turbine and foundation installation vessels. Cadeler has two wind turbine installation vessels operating and two more on order due for delivery in the third quarter of 2024 and the second quarter of 2025. They also have two wind foundation vessels scheduled for delivery in the fourth quarter of 2025 and the third quarter of 2026. Eneti currently has five vessels in operation, although they plan to divest three as part of the transaction. Eneti is also building two wind turbine installation vessels due for delivery in the fourth quarter of 2024 and the second quarter of 2025.
They are forecasting more than $100 million in synergy including nearly $50 million in operations as well as more than $50 million through improved utilization of the fleet.
The combination is subject to the customary closing conditions including approval by both groups of shareholders. Cadeler’s two largest shareholders, which combined hold approximately 45 percent of the shares, have agreed to vote in favor while Eneti’s largest holder and management, holding 36 percent, have entered into tender agreements. The transaction is expected to close in the fourth quarter of 2023.
Ørsted has announced that it will be entering the Irish offshore wind market, unveiling an agreement with Ireland’s leading utility company ESB to develop up to 5GW of offshore wind and complementary renewable hydrogen projects.
The first of these offshore wind projects are expected to be complete in the next Irish Offshore wind auction, ORESS 2.1.
Minister for Enterprise, Trade and Employment, Simon Coveney, launched the agreement on Friday in Cork, accompanied by ESB’s Jim Dollard and Ørsted’s Head of UK and Ireland. Orsted will become a 50 percent partner in a series of offshore wind development projects off Ireland’s coast.
The ESB-Ørsted partnership aims to help deliver on the Irish government’s 2030 target of installing 7 GW of offshore wind and ultimately support Ireland’s transition to net-zero.
“We have signed into law an ambitious Climate Action Plan, which includes a target to generate 80 percent of our electricity from renewable sources. A National Industrial Strategy for Offshore Wind from my department will further support this. Today’s announcement is a strong vote of confidence in Ireland’s sustainable future,” said Minister Simon Coveney.
ESB already has a strong renewable energy portfolio, with over 5GW of offshore wind capacity in development around the coast of Ireland. Some of the projects include Oriel Offshore Wind, Clogherhead Offshore Wind, and Celtic offshore wind among others.
ESB had previously developed most of these projects with the Norwegian energy multinational Equinor, before it ended its partnership in 2021.
Last month, Ireland successfully held its first-ever offshore wind auction (ORESS 1). Four projects with a combined capacity of 3 GW were awarded. A second round is scheduled by the end of this year, where additional offshore wind capacity will be procured.
U.S.-Backed Developer Has Big Plans for Floating Wind in Philippines
The Madrid-based offshore wind developer BlueFloat Energy has entered the Philippines renewable energy sector, with the CEO Carlos Martin Rivals revealing last week that the company is planning to install about 7.6 GW of floating offshore wind capacity, divided among four sites.
The locations where BlueFloat Energy acquired wind energy service contracts (WESCs) include Central Luzon, South Luzon, Northern Luzon and Southern Mindoro.
“We expect the first of these projects to be in execution phase and nearing completion by the end of this decade,” said Rivals.
BlueFloat Energy’s largest shareholder is the U.S.-based private equity firm Quantum Energy Partners. Its portfolio for offshore wind has a planned capacity of 32 GW in ten countries across the globe, and the Philippines has the largest share.
In the Asia Pacific region, BlueFloat Energy plans to put up 6.6 GW of offshore wind power each in Taiwan and Australia, and 1.9 GW in New Zealand.
The Philippines has potential to install about 21 GW of offshore wind power by 2040. The country’s total technical potential is 178 GW, according to the World Bank, owing to large areas around the country’s coast that have immense extractable wind resources.
Recently, Philippine President Ferdinand Marcos Jr. asked the nation’s energy department to put together a policy framework to expedite the licensing process for offshore wind projects. The order supplements the country’s Energy Virtual One-Stop Shop (EVOSS) platform, a web-based system intended to remove bureaucratic barriers for investors.
The Philippine DOE said it has awarded 63 offshore wind contracts so far, with a total potential capacity of 49 GW.
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