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)
Friday, September 08, 2023
NOAA Calls Out Seven Nations for IUU Fishing
IUU (Illegal, Unreported and Unregulated) fishing identifications
Last week, NOAA Fisheries (the National Oceanic and Atmospheric Administration) released its regular report on international fisheries management, citing several nations for IUU fishing and bycatch of protected living marine resources. For the first time, the report also included forced labor and shark catch in its IUU (Illegal, Unreported and Unregulated) fishing identifications.
The biennial report is part of the NOAA’s statutory requirement to the U.S Congress under the High Seas Driftnet Fishing Moratorium Protection Act. Countries negatively certified for IUU fishing under the report could be denied U.S port privileges. The report also helps the U.S government to collaborate with identified countries in dealing with their problematic fisheries issues.
In this year’s report, seven nations were identified for IUU fishing and two nations for shark catch without having a regulatory program comparable to that of the U.S.
Angola, Grenada, Mexico, China, Taiwan, The Gambia and Vanuatu were identified for reported or alleged IUU fishing that occurred between 2020 and 2022. China and Taiwan’s identifications also include allegations on seafood-related goods produced through forced labor.China and Vanuatu were also identified for shark catch despite lacking a proper regulatory program.
After each report is issued, NOAA Fisheries works with nations and entities for two years to address the activities for which they were identified. Afterwards, NOAA Fisheries issues a certification determination. A positive certification is issued if the nation or entity has provided evidence for actions that address the activities for which it was identified. If sufficient action is not taken, NOAA proceeds to give a negative certification.
The 2023 Report announced positive certifications for Costa Rica, Guyana, Senegal and Taiwan following IUU fishing identifications in 2021. Mexico, China and Russia received negative certifications following IUU fishing identifications in 2021.
IUU fishing remains a serious global problem that threatens ocean ecosystems and sustainable fisheries critical to global food and economic security. As IUU fishing is a low-risk, high reward activity, especially on the high seas, it puts law abiding fishermen and seafood producers at a disadvantage.
IUU fishing has become so pervasive that a report by the International Trade Commission found that the U.S imported $2.4 billion worth of seafood derived from IUU fishing in 2019.
“The U.S. for the first time, is identifying countries in the report for both IUU fishing and forced labor. The report outlines there is still work to be done, but we are encouraged by NOAA’s action to ensure fishing vessels uphold the law,” commented Beth Lowell, Oceana’s Vice President for the U.S.
THIS IS THE EPOCH OF STATE CAPITALI$M
Korean Government Pledges Financial and R&D Support for Shipbuilders
South Korea plans to expand its financial support for the shipbuilding industry (Hanwha Ocean file photo)
The South Korean government announced a new round of financial support for the country’s shipbuilding industry during a visit by the Deputy Prime Minister and Minister of Strategy and Finance to the Hanwha Ocean yard in Geoje. The new support comes as the industry continues to struggle with rising costs and competition, as well as slowing orders.
The government officials cited the strong contribution shipbuilding is making to the country’s economy while stressing that they would expand the industry’s leadership in eco-friendly shipping and new technologies. They highlighted that the industry contributed $9.22 billion to the country’s export volume in the first half of this year, an increase of 12 percent from 2022. The total orderbook is reported to be at nearly 39 million compensated gross tons, the highest level in 12 years.
Despite the industry’s success in the first half of 2023, orders are lagging behind 2022 levels. HD Hyundai reports that in total it has received nearly $15.5 billion in orders in 2023, which is 98 percent of its target which was lowered from its 2022 target of $17.4 billion due to the slowing in the industry. Samsung Heavy Industries has secured $6.3 billion in orders, which is 66 percent of its annual target, while Hanwha Ocean blames the uncertainties until it closed the acquisition of Daewoo Shipbuilding & Marine Engineering (DSME) contributing to the fact they have only booked a quarter of their annual target or just $1.47 billion in 2023.
The industry continues to struggle with a labor shortage, despite the government relaxing some visa restrictions to attract foreign workers. Now, HD Hyundai’s shipbuilding yards are in a labor contract dispute that could see its workers start a strike as early as this week.
The government officials said the purpose of their visit was to tour the shipyard, including one of the world’s largest dry docks, where Hanwha Ocean can build four large ships at one time. They wanted to hear about the difficulties during meetings with yard and industry executives. Several of the yard’s subcontractors also took part in the meetings.
They announced a three-fold plan that includes increasing government support for financial guarantees issued by the shipbuilders during the construction of ships. It will be the first increase since 2019. They will raise the amount to $300 million from the current $91 million. The government will re-guarantee approximately 85 percent of the bank-issued guarantee. This is to become effective so that it will cover a new order Hanwha Ocean expects to book in the second half of the year from Qatar for LNG carriers.
The government will also expand its training support efforts providing up to $6,000 in payments to workers. This is in addition to other employment efforts to attract more young people to the industry as well as support the use of foreign workers.
R&D support for eco-friendly ship technology to expand low- and carbon-free shipping as well as autonomous ship technology will also be increased. In total, the government plans to provide more than $20 million to continue to develop leadership in these high-value segments of shipbuilding.
During the meeting, the government officials also said they are working on a comprehensive plan to support the growth of the shipbuilding industry. They look to drive industry growth to continue its contribution to South Korea’s export trade.
Veteran subsea robotics company Oceaneering has joined the crowd of organizations pursuing uncrewed survey technology, following early adopters and developers like Nauticus, NOAA, Saildrone, Reach Subsea and Ocean Infinity.
Oceaneering announced Tuesday that its subsea robotics division has acquired one uncrewed surface vessel (USV) to support its contracts for survey work. Oceaneering is buying a DriX USV from manufacturer Exail, and it will be used for deepwater geophysical surveys and asset inspections. The task set will also include supporting autonomous underwater vehicle positioning.
"The DriX allows us to remotely gather the same high-quality data at a lower operational impact, without the need for an offshore-based crew. This reduces health, safety, and environmental risks while freeing up multi-service vessels to complete other tasks," said Oceaneering SVP Martin McDonald in a statement.
DriX has a long track record for a commercial USV. It has been in operation since 2016 and has racked up several thousand hours' worth of proven experience, including patrol work for the U.S. Navy in the Middle East and fishery survey trials for NOAA. It is capable of over-the-horizon, AI-controlled operations, and can continue to collect quality survey data in conditions up to sea state 5.
The vessel has a small diesel engine and can operate at relatively high speed, accelerating survey acquisition times, according to Oceaneering. However, it sips fuel when compared to a full-size manned survey vessel, reducing cost and carbon.
Oceaneering says that the addition of a USV is a welcome complement to its existing portfolio of remotely-operated systems. The firm has been piloting ROVs from shore bases since 2016, removing about 9,000 personnel sea-days and accomplishing about 100,000 hours of operation over the period.
Oceaneering's entry into the unmanned-vessel field is at a smaller scale than some of its competitors. Ocean Infinity has gone all-in on minimally-manned or unmanned survey technology, building what it describes as an "armada" of more than a dozen oceangoing vessels designed to conduct subsea services without any crew aboard. Reach Subsea is pursuing a similar path with an order for two midsize unmanned subsea-service vessels. And Houston-based autonomous vessel developer Nauticus Robotics has plans to build 20 USV/AUV pairs to do much the same kind of survey, maintenance and subsea intervention work that makes up Oceaneering's main line of business.
Russia Outlaws "Undesirable" Union Over its Support for Ukraine
ITF representatives at a solidarity meeting in Ukraine, Jan. 2023 (ITF)
Russia's top prosecutors' office has decided that the International Transport Workers' Federation's is an "undesirable organization" in the Russian Federation, based on ITF's longstanding support for Ukraine.
"By its activities, the foreign international non-governmental organization International Transport Workers Federation poses a threat to the constitutional order of the Russian Federation," claimed the Prosecutor General's Office in a statement.
The designation makes it legally difficult for an organization to continue operating in Russia, and it applies to ITF affiliates, including the Russian seafarers' union SUR. The SUR represents about 77,000 seafarers throughout Russia and has been an ITF affiliate since 1993. It has ITF-approved contracts on about 400 ships.
Russian prosecutors pointed to the ITF's opposition to the invasion of Ukraine, which is illegal to oppose under Russian law. Shortly after the Russian invasion began, the ITF-affliated dockers' union Unite announced its refusal to work Russia-linked vessels at British ports. The MUA, ITF's powerful Australian affiliate, advocated for governments to apply economic pressure to Russia in order to bring an end to the war. This is unlawful under Russian bans on statements “discrediting Russian armed forces."
“Workers around the world are defiant in opposition to Russia’s invasion including thousands of dock workers showing solidarity with the people of the Ukraine and contempt for Putin’s aggression," said ITF President and Dockers’ Section Chair Paddy Crumlin in a statement last year. “We are witnessing indiscriminate attacks on civilian and commercial infrastructure by the Russian forces. The situation is dire. Our hearts go out to the people of the Ukraine. We condemned this war and continue to call on all parties to seek peaceful solutions immediately.”
ITF joins a list of high-profile groups on Russia's "undesirable organization" list, like Memorial, the Russian NGO dedicated to the remembrance of communist purges; independent news channel TV Rain; Human Rights Watch; Amnesty International; the Marshall Fund; the Atlantic Council; Chatham House; and Greenpeace, among others.
The designation means that ITF affiliates will not be able to hold public meetings, distribute promotional materials, or advertise through the media within Russia. They will be cut off from the Russian banking system, and may be forced to disband.
Maintaining connections with an "undesirable" organization can carry a penalty of up to six years in Russian prison.
DNV: Shipping Must Look Beyond Fuel as 2020s is Critical in Decarbonization
DNV looks beyond fuel to the other steps to achieving decarbonization
The current decade is a critical one for the shipping industry on its course to net zero, but in its latest outlook report, DNV concludes the progress is slow and the industry faces significant challenges. In their new iteration of the Maritime Forecast to 2050, DNV outlines challenges including costs, an expected shortage of low-carbon fuels, a lack of infrastructure, and the need to share the investment to develop new technologies.
“The 2020s is proving to be the decisive decade for the decarbonization of shipping,” writes DNV pointing to the emergence of the latest regulations from the European Union and the International Maritime Organization’s revised goals. “Focusing on fuel alone can distract us from making an impact this decade, and ambitious future declarations are not good enough. What we need is tangible actions that will reduce emissions,” said Knut Ørbeck-Nilssen, CEO of DNV Maritime.
DNV points out that the large-scale transition to new fuels is underway. As an example, the report cites that half the orders tonnage will now be capable of using LNG, LPG, or methanol-dual fuel engines. This compares they said with a third of the orders last year. Further, 6.5 percent of the tonnage in operation can now operate on alternative fuels, up from 5.5 percent a year ago.
While those numbers are seen as a signal that the industry has begun to move, DNV compares the speed of the change to that of a supertanker coming about. They highlight that overall, only 0.1 percent of the fuel used by merchant shipping is biofuels currently.
They warn the clock is ticking louder for the efforts to identify, define, and resolve barriers to successfully and safely decarbonize. However, they recognize that decarbonization will increase costs for individual shipowners for technology, fuels, and carbon pricing, which will all impact the commercial attractiveness and long-term profitability of the operations. Careful consideration they say will be required to avoid unattractive or stranded assets.
DNV believes that a dependence on low-carbon alternative fuels alone with not be enough highlighting that the shipping industry will face competition from aviation and road transportation in particular as well as other industrial users that are also considered to be hard to decarbonize. The report calculates by 2030 the shipping industry would require 17 million tonnes of carbon-neutral fuels. That would represent 30 to 40 percent of the expected available production.
The report reiterates basic measures that should be implemented to achieve immediate fuel savings. Among the energy-efficiency measures they highlight are speed reduction, route optimization, and hull and propeller cleaning. They also point to smart and digital technologies. Still, they also point to an urgent need for low-emission technologies.
DNV selected six technologies that are increasingly drawing attention and adoption in the industry examining them and developing scenarios. The ones they focused on are solid oxide fuel cells, liquified hydrogen, wind-assisted propulsion, and air lubrication systems to reduce hull drag.
The other technologies they looked at are longer-term including onboard carbon, which DNV remains skeptical of despite progress on various tests. They however did find onboard carbon capture can be operationally feasible in their scenario for a large container vessel. Still, they highlight the lack of the infrastructure to handle CO2 captured aboard ships. They also look at the potential of expanding nuclear propulsion from military applications into the commercial industry. They report there would be a “long road to travel before nuclear can be scaled.”
They conclude that the maritime industry needs to adopt an integrated approach that incorporates the evolution of regulations, fuel supply, and technologies. DNV believes the cost of decarbonization must be carried through the maritime value chain and points to mechanisms such as green corridors as providing support during this critical decade.
Analysts and wind farm developers have already been highlighting the growing need for vessels to support the emerging offshore industry. As the industry begins to explore floating offshore wind the need will be even more acute according to a new market analysis from Intelatus Global Partners. They are highlighting the shortage of suitable vessels, an issue that leading developers have also cited as contributing to their concerns in the market.
The new report focuses specifically on the needs of the floating offshore wind energy segment. Intelatus estimates that capital expenditure within this segment will require more than $250 billion by 2035, but the build out could be challenged by the lack of vessels able to meet the needs of the sector.
Global floating wind capacity is projected to grow to around 61 gigawatts over the next 12 years from less than 200 megawatts at the end of 2022. To achieve this, the report estimates a requirement to pre-lay more than 6,000 mooring spreads and the hook-up of around 5,400 turbines. The available market for vessel owners, ranging from pure transport and installation to full floater engineering, procurement, construction, and installation scopes of work, will amount to between $28 and $145 billion according to Intelatus.
To support this development the report identifies two segments, anchor handling vessels and subsea construction vessels, as those that will see the strongest demand to support the development of floating offshore wind. They estimate an opportunity for as much as $12 billion in shipbuilding activity required in the short to medium term to support the development of floating wind farms.
The main vessel category that will be deployed to pre-lay, tow, and hook up the majority of floating wind turbines will be anchor handlers. However, according to Intelatus, of today’s approximate global fleet of 2,400 anchor handlers, less than 50 are identified as suitable and efficient for floating wind projects. They note that several designs however are emerging for anchor handlers specifically designed for commercial-scale floating wind.
“There has been no building of very large anchor handlers in recent years, and those that are active have mainly been built to service oil and gas drilling rigs and floating production systems,” writes Intelatus. “None have been built with floating wind in mind, and many of the existing vessels lack one or several of the features required for efficient floating wind project delivery.”
Similarly, with subsea construction vessels, Intelatus estimates that “only close to 85 out of around 500 vessels feature the capabilities required by floating wind projects.”
The report identifies a further challenge which is the growing oil and gas activity as the offshore energy markets rebound and the competition it is creating for available capacity in these segments. Intelatus notes that the resurgence in the oil and gas segment is reducing the available supply of suitable vessels to undertake floating wind installation projects. Similarly, the lack of shipbuilding capacity and long lead times for new vessels will also become a factor for the wind sector as it seeks to proceed with installations.
Several of the leading wind far developers have already discussed the problems of limited installation capacity and the rising costs. Ørsted, the world’s largest developer of offshore wind farms, last week detailed a litany of problems in its U.S. projects that it said could result in an impairment charge of as much as $2.3 billion. Among the issues cited is the shortage of installation vessels which they said could result in delays and extra costs. Ørsted shocked the industry by indicating that it is prepared to walk away from several of its U.S. projects due to the changing financial dynamics and the expectation that they would no longer meet the company’s financial return criteria for development.
Explainer-Why the US offshore wind industry is in the doldrums
Wed, September 6, 2023 Biden attends a meeting on the Federal-State Offshore Wind Implementation Partnership at the White House in Washington
By Scott DiSavino and Nerijus Adomaitis
(Reuters) - The value of Danish energy company Orsted, the world's largest offshore wind farm developer and a big player in the U.S., has plunged about 31% since it declared $2.3 billion in U.S. impairments in late August due to supply delays, high interest rates and a lack of new tax credits.
The company is just one of several energy firms trying to build new offshore wind farms in the U.S., but the pain it is feeling is rippling across the entire industry, raising questions about the future of fleet of projects that U.S. President Joe Biden hopes can help fight climate change.
Biden’s administration wants the U.S. to deploy 30,000 megawatts (MW) of offshore wind by 2030 from a mere 41 MW now, a key part of his plan to decarbonize the power sector and revitalize domestic manufacturing, and has passed lucrative subsidies aimed at helping companies do that.
But even with regulatory rules and subsidies in place, developers are facing a whole new set of headwinds.
Here is what they are:
INFLATION
The U.S. offshore wind industry has developed much more slowly than in Europe because it took years for the states and federal government to provide subsidies and draw up rules and regulations governing the industry, slowing leasing and permitting.
However, as government policies started to line up in the industry's favor in recent years, offshore wind developers unveiled a host of new project proposals, mostly off the U.S. East Coast. Two small projects came into operation - Orsted's five-turbine Block Island wind farm off Rhode Island and the first two test turbines of U.S. energy firm Dominion Energy's Coastal Virginia Offshore Wind off Virginia. Then came a hitch.
The COVID-19 pandemic gummed up supply chains and increased the cost of equipment and labor, making new projects far more expensive than initially projected.
"It appears the offshore wind industry bid aggressively for early projects to gain a foothold in a promising new industry, anticipating steep (cost) declines similar to those for onshore wind, solar and batteries over the past decade," Eli Rubin, senior energy analyst at energy consulting firm EBW Analytics Group, told Reuters.
"Instead, steep cost gains threw project financing and development into disarray," Rubin said, noting many contracts will likely be renegotiated as states look to decarbonize, with higher prices ultimately falling onto power customers.
INTEREST RATES
Financing costs also spiraled as the U.S. Federal Reserve boosted interest rates to tame inflation.
Many contracts for offshore wind projects have no mechanism for adjustment in the case of higher interest rates or costs.
Some developers have paid to get out of their contracts rather than build them and face years of losses or low returns.
In Massachusetts, two offshore wind developers, SouthCoast Wind and Commonwealth Wind, for example, agreed to pay to terminate deals that would have delivered around 2,400 MW of energy, enough to power over one million homes.
In New York, offshore wind developers also sought to boost the price of power produced at their projects. Norway's Equinor and its partner BP are seeking a 54% increase for the power produced at three planned offshore wind farms - Empire Wind 1 and 2 and Beacon Wind.
Orsted, meanwhile, told utility regulators in June that it would not be able to make a planned final investment decision to build its proposed 924-MW Sunrise Wind project unless its power purchase agreement was amended to factor in inflation.
INSUFFICIENT SUBSIDIES
Biden’s administration has sought to supercharge clean energy development with passage of the Inflation Reduction Act (IRA), a sweeping law that provides billions of dollars of incentives to projects that fight climate change.
Since the law passed last year, companies have announced billions of dollars in new manufacturing for solar and electric vehicle (EV) batteries across the U.S.
But the offshore wind industry is not fully satisfied.
Bonus incentives for using domestic materials and for siting projects in disadvantaged communities are too hard to secure, developers say, and they are crucial to making projects work in a high-cost environment.
The credits are each worth 10% of a project's cost and can be claimed as bonuses on top of the IRA's base 30% credit for renewable energy projects - bringing a project's total subsidy to as much as 50%.
Equinor, France's Engie, Portugal's EDP Renewables, and trade groups representing other developers pursuing offshore wind projects in the U.S. told Reuters they are pressing officials to rewrite the requirements, and warning of lost jobs and investments otherwise.
(Reporting by Scott DiSavino in New York, Nerijus Adomaitis in Oslo and Nichola Groom in Culver City; Editing by Simon Webb and Marguerita Choy)
Massachusetts Looks to Push Ahead with Offshore Wind as Developers Back Out
Massachusetts launched its fourth offshore wind RFP despite problems with current projects (file photo)
Massachusetts once again is finding itself at the forefront of the emerging challenges for the offshore wind energy sector. One of the first states to move forward with projects, Governor Maura Healey is releasing the state’s fourth RFP for wind projects while regulators are confronted by another major project that is seeking to rip up its agreements.
The changing economics and the realities of developing wind farm projects came to the forefront late last year in Massachusetts when the first of the projects said the economics of their deals no longer worked. Avangrid Renewables, part of Spain’s IBERDROLA Group, started the issue last year by petitioning the DPU (Department of Public Utilities) to dismiss its review of the Commonwealth Wind contracts with the power companies. They cited the changing economics saying that the project needed to be rebid in the 2023 solicitation for offshore wind. The Mayflower Wind project, which is a partnership between Shell New Energies and Ocean Winds North America (a joint venture between EDP Renewables and ENGIE), also began advocating for changes to its power agreements.
The developers of Mayflower Wind, renamed SouthCoast Wind, have now confirmed they are going to walk away from their agreements despite the efforts by the DPU to force the developers to move forward under the contracts that were negotiated in June 2022. The lease for the project was originally awarded in December 2018 and went into effect in 2019 calling for a proposed offshore wind farm in U.S. federal waters about 30 miles south of Martha’s Vineyard and 23 miles south of Nantucket, with an initial capacity of 804 MW and a longer-term potential for up to 2.4 GW.
They had moved forward with the project and early preparations, but in June reported they had recently initiated discussions with representatives of the Commonwealth of Massachusetts and the Massachusetts electric distribution companies to terminate the existing Power Purchase Agreements. In a filing last week, they confirmed they will pay $60 million to walk away from the agreements while calling for them to be rebid in the next round to reflect the changed economics of offshore wind development. They need approval from the regulators.
This follows a filing by Avangrid in July that proposed a similar walkaway from its power agreements. The company said it would pay a total of $48 million to three power companies to terminate the agreements. The company says it must have more favorable financial terms to make the project viable.
Of Massachusetts' first three big offshore wind projects, only the Vineyard Wind 1 farm has moved forward. It calls for an 800-megawatt project located 15 miles off the coast of Martha’s Vineyard. In August, turbine installation began with the goal of completing the project which is being developed in a partnership between funds of Copenhagen Infrastructure Partners (CIP) and Avangrid Renewables by the end of 2023.
Despite the troubles in the industry, Massachusetts looks to push forward becoming what the governor is calling an offshore wind industry hub. They released the state’s fourth RFP, its largest offshore wind solicitation to date. It would more than double the state’s current wind power solicited compared to previous procurements.
Bids are due by January 31, 2024, and they plan to execute contracts by August 14, 2024. The RFP envisions selecting offshore wind generation of up to 3.6 GW. The governor highlights that it would be equal to a quarter of the state’s annual electricity demand.
In announcing the new effort, the governor highlighted that the state is not insensitive to the challenges driven by inflation and other macroeconomic trends. The next round under the RFP allows for additional flexibility including bidders can submit an alternative indexed pricing proposal. They are also highlighting the availability of federal tax credits and incentives.
Those tax programs however have become one of the flash points in the emerging rift over development. Ørsted expressed the problems it was experiencing saying the credits are falling short of projections and the hurdles are too steep because of the lack of a developed domestic U.S. supply chain. Executives from Ørsted, Equinor, and ENGIE all told Reuters this week that the credits under the Inflation Reduction Act are not working as planned and need to be revised.
SO MUCH FOR P3'S
UK's Marquee Offshore Wind Auction Attracts Zero Bids as Costs Soar
Vattenfall's Norfolk offshore wind project. Work on the Norfolk Boreas segment was recently suspended due to cost increases (Vattenfall)
In what environmental campaigners called a "monumental failure" for the UK's renewable energy goals, the country's latest auction for offshore wind price contracts failed to attract any bids at all. It is the latest and most serious sign of profound economic change in the offshore wind industry, which has to contend with much higher supply chain and lending costs than it did just a few years ago.
The UK provides price stability to renewable-energy developers through its Contracts for Difference (CfD) auction system. Wind developers who bid successfully for a CfD contract receive a guaranteeed sale price for their electricity production for 15 years. Historically, the system has worked well - well enough to power about 40 percent of the UK electrical grid with offshore wind.
But this year, for the sixth CfD auction round, offshore wind developers say that the terms of the CfD pricing mechanism are no longer enough to offset soaring costs for steel, labor, components and interest payments.
According to developers, costs for a new wind farm are up by as much as 40 percent since the last CfD auction. Those costs are beginning to bite: last month, developer Vattenfall took the rare decision to halt work on the giant Norfolk Boreas wind farm because of high inflation and higher capital costs. CEO Anna Borg told media that "it simply doesn't make sense to continue this project" in the current cost environment. Vattenfall is said to be in early conversations about selling the project.
Despite these warning signs, the government's price floor for the latest CfD auction has increased little from the last round, according to industry groups. Under the circumstances, most developers were expected to sit out the auction; when the sealed bid results were unveiled, it became clear that all had walked away.
The UK's Department for Energy Security noted that other nations have had similarly disappointing results in recent auctions. "While offshore and floating offshore wind do not feature in this year’s allocation, this is in line with similar results in countries including Germany and Spain, as a result of the global rise in inflation and the impact on supply chains which presented challenges for projects participating in this round," the department said in a statement.
However, Welsh nationalist party Plaid Cymru noted that Ireland had adapted its auction terms to the current market and attracted investment in four new offshore wind farms. "Wales is losing to Ireland due to the UK government’s poor planning," asserted Plaid Cymru environment spokesperson Ben Lake.
Climate campaigners put the auction's results in starker terms. "This monumental failure is the biggest disaster for clean energy in almost a decade. Thanks to cost pressures and inept government policy, this auction round has completely flopped - denying bill payers access to cheap, clean energy," said Greenpeace UK policy director Doug Parr. "It leaves the UK more dependent on expensive, imported fossil gas."
Other elements of the renewables auction were successful, attracting strong bids for solar and tidal power development. In this round, tidal had its own set-aside, and seven small-scale projects totaling 53 MW were approved.
Green Energy: Wind and Solar Drive Growth in the Breakbulk Sector
(Article originally published in July/Aug 2023 edition.)
With a global push to develop various types of green energy and major construction projects on the books across North America, the competition to attract business in the marine sectors of heavy lift, breakbulk and project cargoes is creating its own energy.
The port of San Diego recently strengthened its position in these areas by adding some major lift capacity.
It purchased two all-electric Gottwald Generation 6 Mobile Harbor Cranes from Konecranes that will replace the diesel-powered crane at the Tenth Avenue Marine Terminal (TAMT). These all-electric cranes will be the first in use in North America and will support the port’s strategy of healthy air for all.
The cranes are expected to be operational later this year. The port invested approximately $14 million in the cranes and spent an additional $8.9 million to make the required electrical infrastructure improvements.
Greg Borossay, the port’s Principal for Maritime Business Development, says the motivation to buy the cranes was threefold: To be on the cutting edge of the electrification of heavy lift equipment; from an environmental standpoint, to get rid of the old diesel-powered crane, and to develop more capacity to develop business in heavy lift and breakbulk areas.
San Diego now has the heaviest lift capacity on the West Coast from Vancouver, Canada to the Panama Canal, he says: “This puts us in a good spot for project cargo, especially pieces that are over 200 metric tons. With the two new cranes working in tandem, there will be a lift capability of 400 metric tons.” There will be eight positions for the cranes to work on the dock and four away from the docks because the cranes can be used for rail moves as well.
Heavy lift, project and breakbulk cargoes make up 12 to 15 percent of San Diego’s total tonnage. On its Saga Welco service, it handles steel pipe, coils, H-beams, steel plates and fabrication for electrification projects in the U.S. Southwest plus project cargo out of South Korea and Taiwan.
Other project cargo from northern Europe, like transformers and heavy lift equipment, is primarily destined for Arizona, New Mexico and Nevada where there are several electrification projects underway. On its U.S. Ocean service, the port handles heavy lift and breakbulk plus military equipment and special project cargo going to South Korea and Japan.
Cargo Diversity
Port Tampa Bay is Florida’s largest port for handling steel products serving the construction, manufacturing and mining industries, says Wade Elliott, Senior Vice President of Marketing & Business Development.
“Throughout the port and the Tampa Bay region, there are many companies that specialize in the processing, distribution, fabrication and manufacturing of steel products,” he explains. “We also handle lumber for the home improvement and construction sectors.”
Elliott adds that “Steel and other products for the solar industry have been one of our fastest growing breakbulk segments. High-and-heavy construction equipment pieces, many of which come from the region’s large industrial equipment auctions, are imported and exported through the port using our foreign trade zone.”
Port Tampa Bay has 500,000 square feet of transit shed space, over 5,000 linear feet of berth and over 100 acres of laydown area for breakbulk and project cargo. “We’re currently expanding laydown area at our new Eastport facility and are planning to construct up to 500,000 square feet of additional on-dock, transload warehouse capacity at our primary terminals on Hookers’ Point,” says Elliott.
Within the past year, logistics provider Glovis launched a new ro-ro service delivering automobiles manufactured in Mexico. And Ultrabulk provides regular breakbulk service delivering lumber from Northern Europe.
“While Port Tampa Bay is well known as Florida’s largest port, what really sets us apart is the diversity of our multiple lines of business,” notes Paul Anderson, President & CEO of Port Tampa Bay. “Breakbulk is a critical component of this diversification and an area we remain committed to expanding thanks to our abundant real estate holdings.”
Infrastructure Upgrades
For the fiscal year-to-date through May, the Georgia Ports Authority (GPA) has handled 2.8 million tons of breakbulk cargo or eight percent of GPA’s 37.2 million tons of cargo handled during that time. Most breakbulk cargo for GPA falls under ro-ro, forest products and rubber.
Heavy-lift cargo is handled at the port of Brunswick, arriving by ro-ro vessel at the Colonel’s Island Terminal and loaded on rail or multi-axle, over-the-road chasses. To handle the heavy cargoes and accommodate heavy-lift cranes, GPA is improving the paving adjacent to its near-dock rail.
Additional infrastructure upgrades at Brunswick include replacing a 50,000-square-foot cargo shed at the Mayor’s Point Terminal with a new, 100,000-square-foot warehouse with up-to-date life safety improvements and flooring upgrades to handle heavier loads. The project will be completed in mid-September. The new warehouse will handle rubber imports.
In addition to rubber, GPA’s breakbulk cargoes include forest products and heavy equipment for farming and construction. The deepwater port of Brunswick is considered an ideal gateway for the import-export of breakbulk cargo, especially in light of the port’s easy connectivity to road and rail.
“GPA’s ability to handle breakbulk cargo is important for the authority and its customers because it adds options for logistics operators, delivering flexibility on routing, schedules and transportation costs,” says GPA Executive Director Griff Lynch.
To accommodate more ro-ro cargo carried by Wallenius Wilhelmsen, GPA is making improvements to the Colonel’s Island Terminal. Construction has started on 350,000 square feet of near-dock warehousing that will serve auto processing as well as on three additional buildings and 85 acres of auto storage space on the south side of the island. The improvements will grow annual capacity at Colonel’s Island from 1.2 million to 1.4 million units.
Epicenter of Offshore Wind
South Jersey Ports, which operates four marine terminals in three cities in southern New Jersey – two in Camden and one each in Paulsboro and Salem – specializes in bulk, breakbulk and project cargo and handles over four million tons of cargo annually. Main cargoes include wood products, cement, cocoa beans and steel.
Like other ports, South Jersey is also seeing the benefits of wind energy development. South Jersey Ports has been working with its partners to develop the infrastructure to become the epicenter of the offshore wind industry.
Paulsboro Marine Terminal will handle the monopiles for Ørsted’s Ocean Wind 1 offshore wind project. The project will require 98 monopiles, each weighing approximately 1,500 tons and standing almost 500 feet tall.
“The EEW Group is one of the world's premier manufacturers of monopiles, which are the foundations upon which the towers and wind turbines will sit,” explains Brendan Dugan, the port’s Assistant Executive Director & Chief Commercial Officer. “EEW is from Germany and has established an American affiliate (EEW AOS) at our Paulsboro Marine Terminal. They’ve already built Phase 1 of their manufacturing plant – a weld building and a coating building.”
He says that Phase 2, when complete, “will mean the entire manufacturing process from the importing of raw material and rolling the steel will all be done at EEW's manufacturing plant at our Paulsboro Marine Terminal.”
The port of Galveston is also a benefactor of the global push for green energy. The port has long been a major U.S. importer of wind turbine pieces. With the extension and increase in federal tax credits for wind energy projects, the port is once again seeing higher tonnages for this heavy-lift cargo. That trend is expected to continue.
“This is all good news for Galveston labor unions because breakbulk and ro-ro are hands-on cargoes requiring skilled labor,” says Executive Deputy Port Director Brett Milutin. “The port’s labor unions have years of experience in moving these specialized cargoes by crane from ships to trucks and rail.”
Galveston has also seen significant growth in ro-ro and breakbulk imports in the first half of 2023. Compared to last year, new vehicle tonnage is up 113 percent and ro-ro cargo has increased 10 percent.
Insuring Cargoes
While ports globally are developing strategies to insure clean air, shippers and cargo owners are looking for insurance of a slightly different nature – the kind that covers the value of their products against a multitude of scenarios that could cause harm during transit. So insuring cargoes is as vital as San Diego’s new cranes.
The upcoming Houston Marine & Energy Insurance Conference (Sept. 24-26) offers a venue to research insurance programs. The conference has attracted top talent in the marine, energy, insurance and admiralty law industries and has become the preeminent meeting place for the global marine and energy insurance business.
Steven Weiss, President of Steven P. Weiss Consulting Inc., has a vast background in ocean and inland marine insurance including over 32 years of experience as a marine surveyor, loss adjuster, direct insurance and reinsurance underwriter.
He offers a few tips when shopping for cargo insurance.
“Don’t just focus on cost,” he advises. “Your freight forwarder may tell you you’re covered under his liability policy, but that’s very limited coverage and you’re better off purchasing all-risk coverage though specific exclusions will probably apply. Don’t lie on the application. That’s not only insurance fraud but can make your policy canceled back to inception if it’s relevant to the loss. List all cargoes you expect to move, how much per year, how much per shipment. Do you need stock coverage? Expect to pay more than last year for catastrophic exposure coverage.”
He says different cargoes have different susceptibilities, and most cargo damage is due to inadequate packing. So it’s important to choose quality packers and freight forwarders: “Review their processes and procedures. Review and be a certificate holder on their liability insurance. Ship your cargo by the most appropriate method of transportation – truck, rail, barge, ship, airplane or the best combination. Use marine surveyors to assist in developing packing guidelines or how to improve in the event you’re having consistent losses.”
