Wind power seen surging as custom barges cut set-up costs

www.bloomberg.com
11 Apr 2012

Offshore wind-power producers from DONG Energy A/S to RWE AG (RWE) are building custom ships at record rates to reduce the cost of the technology that's three times as pricey as electricity from coal plants.

As many as 20 vessels, some with movable legs that reach the seafloor, will come onto the market in the next few years, reducing chartering costs of as much as 200,000 euros ($261,000) a day, said Marc Seidel, an offshore engineer at Suzlon Energy Ltd. (SUEL), which supplies turbines to Germany's RWE.

A lack of specialized installation ships has forced companies to hire barges designed for oil exploration, holding up work at projects such as E.ON AG's Robin Rigg wind farm off Scotland's western coast. The British government estimates that offshore wind may contribute more than 35 billion pounds ($55 billion) to the economy by 2050 if costs are cut quickly enough.

"Having these vessels is the difference between being able to build the projects that we're all looking at today and not", Paul Coffey, chief operating officer of RWE's Innogy unit, said from Swindon, England. "They allow you to operate in higher water depths, in more inclement water conditions. They allow you to get the job done faster and more safely".

In the early 2000s, developers had to "beg, steal and borrow" vessels from other industries to get projects completed, Coffey said. Essen-based RWE won rights with SSE Plc (SSE), Norway's Statoil ASA (STL) and Statkraft AS to develop the Dogger Bank wind park 100 km (62 miles) off eastern England in the UK's third licensing round. DONG Energy had a similar struggle.

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