Energy Transition Now Podcast – Episode 21 “Opportunities and challenges of floating offshore wind”

David Linden [00:00:00] Hello and welcome, everyone. You’re listening to Energy Transition now. Back by popular demand and now in its fourth series, I’m your host. David Linden, the head of energy transition for the Westwood Global Energy Group. Now, here at Westwood, we have a whole team of people analysing and opining on the offshore wind sector. But while the sector has pretty much grown exponentially more than 99% of the time, the wind turbines themselves are what we call fixed bottom. So where the foundation senses are fixed or directly connected to seabed. Nevertheless, the industry itself talks a lot about the future being floating. To discuss essentially what that means, I’m really pleased to have Alex Gauntt here with me, the Supply Chain Director of Cierco Energy, here with me today. Hello, Alex.

Alex Gauntt [00:00:50] Hello, David. And hello, listeners. Thank you very much for inviting me on this podcast. Some fantastic work you guys have been doing, i’ve been listening to some podcasts earlier this week and it’s just brilliant to be part of this. Thank you again for the invite.

David Linden [00:01:03] No problem at all. No problems at all. It’s great to have the opportunity to have folks like yourself essentially, talk through with our listeners all the good things that you guys are doing. So I would say, thank you more to you, for taking the time to do that so much appreciate it.

Alex Gauntt [00:01:17] My pleasure.

David Linden [00:01:18] Perfect. Perfect. So we’ve had people from different companies do different things come on to the podcast, but not maybe everyone, would have heard of your company that you’re working for right now.

Alex Gauntt [00:01:31] Absolutely.

David Linden [00:01:31] That depends if you’re in the offshore. Wind industry or not, of course. But maybe can you just explain who Cierco Energy actually are and then what you’re trying to do?

Alex Gauntt [00:01:40] Absolutely. Yeah. I mean, Cierco is a pure-play renewable energy developer. What that means insofar as the projects that we’re working on at the moment is concerned, is we specialise in going and identifying areas where we can plant flags to create offshore wind opportunities for the future. Now we’ve decided to focus most of our efforts on the floating wind. We also own a fixed bottom offshore wind farm called the Forthwind Demonstrator. But at the moment, the majority of my time is spent absolutely in the floating wind aspects. Cierco is part of a joint venture with SBM and we have a company called Floventis and Floventis is developing the Llyr that’s double L, Y with a hat and a R, Welsh projects Llyr One and Two off the Celtic coast, about 40 kilometres off Pembrokeshire. And we’re also developing the CADEMO or CADEMO Demonstrator Project, which is a four turbine floater off the West Coast of the USA.

David Linden [00:02:43] Okay. And the word demonstrator will be an important one there for the rest of our discussion, as well as to give you an indicator. As to where we are in the industry in some respects. I mean, maybe just to ask you yourself as well, in terms of your role within the company. What is it that you’re currently responsible for? You’ve got the Supply Chain Director as your title. What is it you kind of do day-to-day?

Alex Gauntt [00:03:05] Yeah, I mean, the supply chain director is a very exciting role for the company in the sense that, you know, I’ve spent about eighteen years in the offshore wind sector myself and roughly half my career I was in the development side of things where I sort of semi-jokingly saying I made promises that supply chain would then have to keep. And then I spent the other half of my career in the supply chain, primarily looking at the power cable sector and, you know, the supply and installation of interay cables and export cables, that sort of thing. And I realised very swiftly that I was having to, you know, fulfil promises that developers made and sometimes that was not possible. So I kind of see my role with Cierco as a supply chain director to find that that really comfortable middle ground where we can have high value offshore wind projects, floating offshore wind projects, that is a buildable project, you know, taking the reality of the constructability aspect and the philosophies around that to apply those through the consenting process right through into the operations.

David Linden [00:04:11] Very interesting. Very interesting. Again, I think again, very relevant to floating and we’ll talk through it as to what some of the well, the opportunities, but also the challenges are and the kind of thing you’re dealing with, I guess, as part of that. So thank you for it. Very interesting indeed, Alex. So, so let’s maybe start with basics then. You know, it was I said 99.9 is probably a fair rounding point as well, of what’s out there at the moment, is fixed bottom offshore wind. What is it that we’re talking about then when we say floating offshore wind, what is it and how does it differ to the fixed bottom side of things?

Alex Gauntt [00:04:47] Yeah, it’s a great question. It’s one that that keeps me very busy at the well at the moment trying to define exactly how we make these things float. It’s fundamental difference is that rather than having a fixed structure like a jacket or a monopile attached to the seabed. We actually have a floating superstructure upon which the turbine’s placed that then keeps the turbine buoyant. And the way that we make that stable and doesn’t float off over the horizon with the first gust of wind is that we have mooring lines which are either taut moored or slack moored. So the taut moored, in which case we have an up down connection between the foundation and the seabed, which can be anchored in the seabed with drilled anchors or piled anchors or, you know, suction buckets or we have semi taut or slack mooring systems where you effectively have mooring chain or, for example, nylon ropes connecting the foundation to the seabed to drag embedded anchors or suction bucket anchors or again, drilled or piled anchors. So, you know, these things are very heavily dependent on the technology that was developed for oil and gas. And I’m sure we’ll come to that in a second in terms of, you know, transfer of skills and capabilities. But, you know, it’s a super exciting market space to be with and the technologies are still in their – I’m not going to say infancy – that would be a disrespect to a couple of the companies that have led the charge with floating offshore wind. But they’re certainly you know, there is not a standard approach to floating offshore wind yet.

David Linden [00:06:32] Then I guess that’s the point it’s to start off with. So first of all, the difference really being that you’ve got a structure that floats and you’re essentially in whichever form you’re talking about there, whether you’re anchoring it, whichever way to the seabed in some respects. But you’re missing all that structure you’re going to have to build to essentially drill into the ground.

Alex Gauntt [00:06:54] That’s right. That’s right. Yeah.

David Linden [00:06:55] Or pile or whichever way you end up doing it.  So but the floating structures also themselves are of varying designs. Right. You’ve got the mooring aspect, but also the floating structure in itself, which is essentially being worked on by different companies. Because you can do it in many different ways.

Alex Gauntt [00:07:16] Yeah, that’s absolutely right, David. When you look at the types of structures for floating offshore wind, you can broadly, you know, specify that they are semisub so semi-submersible. And that’s literally a structure that’s been designed to be part in the water, part out of the water and act as like a supporting structure usually has, you know, buoyancy modules on the edges and the turbine in the centre on one side with jackets type structures struts in between  to create the, the tensions required to, to make the whole thing stiff so it doesn’t bend whenever the waves hit it. Then you’ve got barge type solutions where you have like super massive structures. They can be tens of thousands of tons, where you tend to have the turbine either at one end or the centre as well. They can be out of concrete, they can be out of steel. And these things will generally have either a single point mooring solution or a slack mooring solution. And then there’s also your TLP. Very exciting for the oil and gas sector because tension leg platforms, what TLP stands for is these taut mooring systems where you have an up or down mooring system connected directly to the floater itself. And it’s tensioned and brings the floater farther into the water column. So that effectively creates a very rigid structure and is probably the closest thing that we have for floating offshore wind that replicates the type of loading that a wind turbine would expect to receive from a monopile or a jacket. Because you create such a rigid structure, even though you don’t have, for example, a steel tube going all the way down or jacket going all the way down. You just have these wires, if you like, a bit more than wires, but you know what I mean? And then we mustn’t forget spar buoy, spar buoy. Is that to be, you know, or is a very exciting technology where effectively you create a pendulum, if you like. You have as much, if not slightly more weight in a tube below the water as you do above with the wind turbine and you counteract the wind turbine loads. Now, traditionally, you need very deep harbours to build spar buoy type solutions, which doesn’t suit everywhere. But those areas that it does suit, it’s, you know, an excellent technology to move forward with because you can effectively, you know, build this thing in stages at the quayside. Say you have a fjord which gives you a very geographic focus and then install the turbine. Top and then float the whole thing out. That’s one if you needed to.

David Linden [00:10:02] So if I were to sort of summarise that some respects, we’ve got a series of, probably even multiple variations within that right. I think looked at some of this myself. It’s I remember the diversity can be enormous, but you kindly bucketed it for us into those sort of all different areas. And that, I guess gives you an indication of some of the things I’d like to talk about in a minute around the opportunity. But the challenge in some respects.

Alex Gauntt [00:10:34] This is this only came to me last week, but I am aware, so I mentioned the four buckets that the types of technology that we can roughly categorise each of these technologies into. Yes, I am aware of 86 technologies.

David Linden [00:10:48] 86. Oh, wow.

Alex Gauntt [00:10:50] Roughly into these four categories. So it’s such a dynamic environment to be part of because, you know, it’s not anything goes. Clearly, the thing has to be designed to a certain standard. And, you know, there’s requisite requirements in terms of interaction for the turbines and that sort of thing. But it’s very exciting to see so many different, very innovative solutions being brought to the market to address this. And from a supply chain perspective, it’s super exciting. But we’ll talk about that in a second.

David Linden [00:11:22] I’m sure I don’t want to say this, but it almost sounds like the sexy part of the wind industry, right now, because that’s where a lot of the really. New innovation happening, now I don’t want to be rude to anyone who’s maybe in the blade side, of course, of the blade side, there’s lots of innovation happening there. We’re talking about recycling and all these other areas and it’s exciting right. There is that but this category, I mean, if you think about, as you say, 86 different technologies that you could maybe bucket into those four different areas or so, none of them obviously a clear winner at this stage. And again, we’ll talk about that. That almost sounds like a really exciting, clean tech area that should be coming out of Silicon Valley where someone is essentially going to scale something in some shape or form. So it’s  market dynamic, is already extremely different to the fixed bottom market.

Alex Gauntt [00:12:14] Yeah, absolutely. I mean, there was a time period in the fixed bottom offshore market where, you know, people said, oh, we’re only ever going to install offshore wind farms up to 20 metres than it was, you know, 30, 40, 50. But realistically, the technology, the iterative. Changes within. For example, the jacket design didn’t fundamentally shift away from being a jacket. And similarly, the monopole design, it was still, you know, no disrespect to the massive, massive, you know, industrial developments that have happened in that in that space. But it was still the tube, you know, its tube hammered into the ground some way or another. So, yeah, look, looking at these four types of technologies across such a vast array of different technology innovations is very exciting.

David Linden [00:13:06] So the question, though, is why are people doing this right? So you started to allude to it a little bit there are, you know, water depth, those sorts of things. I’m sure you’ll touch on that, but. You know, I could phrase the question in many different ways, but I guess the horrible way would be “What’s the point?”, but I guess the nice way, say what’s the benefit of choosing floating wind above continuing with the technology we’ve got right now and just incrementally improving that you know it’s taller wider, bigger etc like the way that is you know going up to Eifel Tower scale wind turbines. What why go down this floating route what do you get out of it?

Alex Gauntt [00:13:49] Yes, that’s a great question, David. I think you’re going to get a different answer depending who you ask on this. But my view is, I suppose, threefold. On the one hand, you know, not everybody has shallow coast coastal waters, right? Yeah. So in order to democratise the opportunity of having offshore wind for every country, we needed to see some sort of step change in the technology evolution to be able to deploy in deep waters. I mean, if you think about, you know, the Southeast Asian markets, you know, Pacific Island markets, you know, they don’t have sub 60 metre or very large tranches of sub 60 metre water depth seabed around their heavy population density areas on the coast. So having a floating solution definitely drove that mechanic or that factor, or sorry was driven by that factor I think to a certain degree. Then there’s also the fact that the further you are from the coast, the cleaner, the air. So you have a larger fetch of wind over open water without creating turbulence via having coastal lines, buildings or whatever. And so you kind of you’re putting yourself into a position where you can effectively predict the generation capacity of the wind farm a little more securely and longer-term, because it’s not like somebody is going to build a skyscraper between you and whatever or even an oil rig. It’s amazing when you look at the wind patterns, how quickly they change, even just with waves, nevermind other structures on the water. And I’m not a specialist in that in that field, so I can’t go into details about it, unfortunately. But it is an area that’s worth exploring further. And the currently my understanding that the offshore wind farm with the highest capacity factor in the world is a floating offshore wind farm.

David Linden [00:15:52] Yes. Yes, indeed. My understanding is the same.

Alex Gauntt [00:15:55] So so we’re in a situation where, yes, it costs more at least compared to the, you know, established fixed bottom offshore market. But potentially there’s an uplift in terms of the generation that you’re actually able to realise. And it’s not just about the wind fetch, it’s also about the interaction between the turbine and the floating structure and how it softens the reaction. I’m not an engineer, so. Very simple terms.

David Linden [00:16:23] Nor am I Alex, please don’t worry.

Alex Gauntt [00:16:24] The whole the whole. The whole thing doesn’t shutter. It bounces. Or is it the other way around? But yeah, it’s about rigidity, stiffness of the structure and the natural springing of the water column.

David Linden [00:16:36] So there’s some sort of technical call it benefits of such to it, but also commercial. In some respects because it opens up a whole new landscape. In theory, you could put it anywhere, right? A floating, floating wind farm. You don’t have to have some of the issues. And my assumption also is maybe some of the seabed doesn’t get as disturbed either. So from an environmental perspective, it also has its benefits and those sorts of things. There is also an area that I’ve seen people talk a lot about, which is if you’ve got a seabed, but you’re nowhere near a market that maybe needs electricity, what you can do is start to create all these floating call them green hydrogen stations around the world and all those things. So, so apart from, you know, getting a better wind solution out there, offering up more of a commercial opportunity for the wind sector itself and for countries to become carbon neutral or whatever is an electricity sector’s. There is also this opportunity to say, well, hang on, we can actually capture all this and create other green fuels, or all those sorts of things from that as well. That may be stretching the envelope a little bit, but it does to me strike, another reason why the industry appears to be excited by this is because what you can do is utilise this technology in other ways to maximise the green angle of what you’re trying to capture from the wind that’s out there. I mean, is that fair as well, or do you think that’s really very, very marginal in terms of what we’re talking about?

Alex Gauntt [00:18:16] Oh, I mean, it wouldn’t be fair for me to judge whether that is a marginal application or not. I think there’s certain validity in the expectation in the sense that, you know, electrolysis, you know, it just needs a large power source to power effectively the process of splitting the water into hydrogen and oxygen and then the compressors to compress it and etc., etc., etc.. And that’s before we consider things like ammonia or what some other storage and transport option. Is it going to be, the main driving factor of the deployment of offshore wind, floating offshore wind, I’m not sure? I think floating offshore wind is going to be driven more by the opportunity to deploy offshore wind in more markets than it is by the potential to be a producer of green hydrogen or other renewable fuel in an offshore environment. Having said that, and then coming to the next point that we should talk about the transition of the oil and gas sector and the renewables market. Having said that, there is a natural overlap or parallel in terms of the capability statement and, you know, the areas of comfort that the current large energy sectors operate in. You know, if we are to create a new offshore energy, energy, fuel producing factory, if you like, rather than drilling for oil or drilling for gas, then creating natural, you know, a green natural replacement product does make an awful lot of sense.

David Linden [00:19:49] No, it’s interesting and I think there’s just two things in your answer today,  which have quite I think I wouldn’t say revealing, apologies in that sense. But the point is, is no one knows. And this is part of what’s interesting with this industry is, is there’s lots of postulation, lots of ideas, lots of X number of technical possibilities of what you can do. But it’s hugely uncertain as to what’s actually going to happen to the industry, how it’s going to interplay with things. And I guess the whole idea of floating wind to green hydrogen is just one I’ve come across a lot because it’s one that people like to talk about as an additional value add anyway in the offshore wind industry, right? I mean, if you go to any conference now, there’ll always be a track of green hydrogen in some shape or form because it just makes sense in many ways, but it’s also a favourite of the industry in its own way. And look, I mean we also had CIP on in our last series and they were talking about, you know, could you do some of that? But yet again, your answer is, I think is the dead right? We don’t know yet. Could it be? Maybe. But it’s not how everyone’s thinking about the technology right now. It’s just one of the things.

Alex Gauntt [00:21:02] I mean, another way to look at look at it is the existing markets. You know, there is a massive existing market for electrons, right? We need power. We need power. And we need to displace all the power that we have on national networks and international networks with green electrons. So no matter what happens, that transition away from non-renewable and non-sustainable energy sources into green energy sources is going to happen. And that’s, I think, going to be the major. I’m not an economist either, but my expectation would be that that would be the major driving factor for more people, more countries who may be geographically just in a disadvantage against fixed bottom offshore wind to adopt floating offshore wind. There is not currently an international market of sufficient size for green hydrogen, so there’s going to be a lot of policy shifts required to move people down that path. Now, I love green hydrogen. I have to declare my bias here, and I genuinely think it is a fuel source of the future in particularly if you count agricultural resources and resource requirements around tractor fuelling and that sort of thing or batteries may not be the alternative fuel option because of the amount of power required for long durations. So. I would urge any policymakers who think about this area to think about creating a new policy demand a pull for green hydrogen solutions. So so yeah, absolutely. Future massive opportunity right now and I need electrons. So right now, I think floating offshore wind is going to primarily be driven by giving more people an opportunity to tap into this stuff.

David Linden [00:22:55] To round off maybe the opportunity bit where you’ve mentioned this a couple of times, but it is that oil and gas overlap that is quite obvious. Well, I’ll let you say that rather than me. We are working on these things ourselves, right? But I’d like to get your opinion on this, there is talk of the more obvious should be, say, overlap in the floating side of things with the oil and gas sector. Could you maybe just highlight a little bit around where that is and why? And you’ve alluded to it already, I suspect. But to me, it’s an important one because it talks, about I guess it talks directly or indirectly to some of this just transition, a part of it aspect as well, as much as the nuts and bolts of how are we going to get this done, but it’d be useful to hear from yourself, how are you seeing some of that overlap?

Alex Gauntt [00:23:53] Absolutely. There was a paper, I think. Maybe three years or four years old that I read around the labour resource personnel resource shortage for renewables. And this is, you know, this I’m fairly new to floating offshore wind. So this would have been a fixed bottom offshore wind issue that was being highlighted. And it was somewhere in the region of 186,000 people required before 2030 of which there’s currently a route to market for 27 or 30,000 in one market alone. Right. And what that didn’t account for, of course, were the thousands and tens of thousands of wonderfully clever men and women who are working on the oil and gas sector who potentially could transition to the renewables market. Now, when you’re working on a large floating or fixed bottom offshore production facility in, say, the southern North Sea, the transition from that to a fixed bottom offshore wind farm is not immediately obvious because, you know, we don’t tend to have the wind farms populated with people as such. We’re in shallower water, we’re closer to shore, yadda, yadda. So it’s a very different kind of mentality and process for becoming, you know, say, an offshore wind technician or whatever. But when you look at the floating, you know, we’re talking further from shore. We’re potentially talking about, you know, Mothership Solutions in terms of having a large floating maintenance and repair solution that’s either comes into shore, you know, once day or once a week or once a month with, you know, rotations and that sort of thing. And you look at the just that the physical structures themselves of being these super massive either concrete or steel floating structures that are connected to the seabed, the amount of underwater aspects that need to be considered and, you know, visually surveyed and maintained there just all of a sudden, the subsea sector of oil and gas becomes such a draw to me as a resource for labour and technical capability to satisfy the demand I’m going to have an offshore wind. I know that there’s some great people out there doing some great work on getting the just transition stuff done. But I think more can be done. And I think there’s so much opportunity to bring people over in a friendly manner rather than, you know, aggressively saying it’s ‘us or them’, that can be done in the future and I’m hoping to be able to support with that little bit.

David Linden [00:26:31] No, I certainly agree. And I mean, we’ll talk about some of the challenges, the challenges of the industry in just a minute. But, you know, we come across this a lot and people wonder how they can transfer or be part of it. And this is certainly one of the more obvious ones. So, yes, people should reach out to you if they’re looking for actually an opportunity to work. Okay. So opportunities as such are you know, there are commercial opportunities, there are technical benefits to doing this. You know, there’s a big scale opportunity out there more generally, environmental benefits more broadly, but also employment and longevity of all of the economy in some respects. So sounds extremely positive as such. But there are always challenges, always without sort of asking you to do a list of things… Or why dont I had it over to you that, you know, there are clearly a whole series of challenges. And some of them, I’m sure, the order of importance. And there will be local issues versus national issues and global issues, etc.. But well. I guess the broader question is what’s kind of holding this industry not, back, but what’s the challenge they’re facing? I mean, the fact you’ve got 86 different technologies is probably the most obvious one we’ve mentioned so far. But what are some of those challenges that the industry is facing and having to deal with? And how do we get from 0.1% to something a bit bigger?

Alex Gauntt [00:28:04] Yeah. And I it is the, the thing that keeps me up at night at the moment is, you know, this, this particular aspect is how do we make floating offshore wind not only cost competitive with fixed bottom offshore wind, but to get to the industrialised stage whereby we can turn these things out.

David Linden [00:28:23] But how much more expensive is it just to pause you there? How much more expensive are we talking about?

Alex Gauntt [00:28:27] I couldn’t possibly comment on that. Yeah. It’s less than you would imagine. But I think cost parities a little way away. Having said that, ask me again once I built my first offshore floating offshore wind farm and maybe I’ll have some good news for you.

David Linden [00:28:41] So, yeah, obviously, you know, we look at our models, we look other people’s things with regard to the work that we do and there is a lot of variance. Right. But I guess the point is, is it’s more expensive right now.

Alex Gauntt [00:28:54] Yeah. I mean, with with with a very strong supply chain flavour to my bias. You know, I a lot of my headaches stem from turbines. Now that’s not to blame the turbines for the issue as such. But you know, when I’m looking at 50 megawatt plus platforms, you know, for deployment in 2027, which is the kind of timelines that we’re working to at the moment, these are big things. And when I say big things, there are maybe you can count them on one hand, number of cranes that could lift the turbine nacelle and rotor into place on these things. So we’re talking 160 metre reach, you know, cranes required to just install the turbines onto the floaters at the point of local floating out. Now, clearly, you know, there’s a lot of work going on around, maybe retroactively fitting jackup solutions with just a taller crane. But then we’re having to install the crane, the turbines in shallow water. There’s the discussion around having a floating feeder barge solution to a super massive, as I would call it, heavy lift vessel offshore, which is floating, which then it’s able to install whole components rather than having to lift stuff up to the top. But then that even more severely reduces the, the pool of vessels available to do that work, which obviously comes with an increased potential of risk and cost. So, you know, the turbines, are projected to keep growing and the crane suppliers are very happy to sell you a crane or rent you a crane as required. But it’s by no means something that you’ll find at every shop corner.

David Linden [00:30:46] Are you just have to start with smaller turbines. And as a result, do you think? I don’t want to say that because you’ve got a, you know, we do our own vessel forecast, right, we see these gaps in terms of what’s expected, and that’s even just in the next, oh, ten years, eight years, right. And that’s mostly we’re talking about fixed here, right. And there’s already a gap there. And then talking about on top of that, a whole variety of projects which do have some uncertainty around timelines as well, which aren’t the biggest projects in the world, right, yeah, in fairness. Is that essentially another layer of complexity that a lot of them are still. Quite far out? You said 2027 for yourselves, but they’ll be people, 20, 30 onwards, etc. who’ll be looking at something. A lot of Scotwind, arguably 26 is the least amount in Scotland is 2030 onwards in theory right.

Alex Gauntt [00:31:38] That’s right.

David Linden [00:31:39] And so so that’s quite a timeline to think about. These things. They just got time. But are they all going to be using wind turbines that essentially are challenged with that vessel capability? Or are we going to be choosing smaller wind turbines so you can get around that. And the focus is going to be on some other aspects like the floating structure itself and working through that cost and design around that.

Alex Gauntt [00:32:05] I don’t think there’s a binary response to that. And I think unfortunately, it’s a it’s another question to your question. And that is, you know, at what point do I sacrifice the potential increased generation capacity of the larger turbines just because I can’t find a damn crane you know.

David Linden [00:32:24] You have to come down to that. But yeah, interesting discussion point.

Alex Gauntt [00:32:28] It’s absolutely fascinating and it’s completely valid. And I’m that there are other players in this market space who are actively choosing smaller turbines or current generation of turbines to focus on what’s available right now, even for the later generation of projects for that very reason.

David Linden [00:32:46] But I guess it’s a really interesting example of the type of complexity that you’re dealing with and you have to think through.

Alex Gauntt [00:32:54] I think, you know, again, it kind of feels like I’m punching on the wind turbine suppliers, which I’m absolutely not. But I do wonder quite frequently where the market would be if we, say, had ten major contenders for offshore wind turbines rather than less than ten.

David Linden [00:33:14] Yeah, true, but on the flip side I would, I’m not going to defend anybody on this podcast. But I guess the difficulty, of course, is also who’s making money right now in that part of the world. And that’s the complexity. Now offshore is slightly different to onshore. So, you know, got to put our hands up there and be careful what you say. But essentially, you know, it is a growing fast market where cost is trying to be managed and dealt with. And who’s the winner and loser in that is quite interesting. Probably a separate podcast at some stage.

Alex Gauntt [00:33:44] Yeah, I think so. And certainly, you know, my conversation with the wind turbine suppliers is they are not I don’t want to say they’re under-resourced. That’s not the word I’m looking for. I’m looking for. They’re so busy.

David Linden [00:33:57] Yeah. They are.

Alex Gauntt [00:33:58] You know, they’re so busy with not just floating offshore wind, of course, because we represent a microscopic proportion of the total offshore wind market at this stage. But, you know, with the fixed bottom as well, all around the world, it’s growing.

David Linden [00:34:11] It just highlights at a very high level essentially the complexity of an industry. And this is every industry where technology is changing fast. Investment timelines are still quite long in some respects. But how do you react to something which, you know, isn’t yet set in stone in some respects? And this is the question I was I guess I was trying to sort of skirt around a little bit, is do you think there’s sort of that lack of standardisation we currently have in the industry? I’m talking about the floating foundation types or certain 86 or so of technologies. Is that a concern or a benefit to the industry? Right. Because you could talk about creative destruction and innovation and getting the right solution and it isn’t one size fits all and those sorts of things. But you could also talk about confusion, complexity and delay. In some respects, just out of interest from your perspective. And if you can’t answer, that’s fine. But would you see that as a benefit, or do you think that’s still a concern for the industry?

Alex Gauntt [00:35:17] Well, I mean it segways quite neatly into my next challenge and not just around ports. Yeah. So if we, if we break down the challenges with regards to. So the design of a floater is one thing. Then you’ve got the sourcing of the materials. Then you’ve got the fabrication of the components. Then you’ve got the assembly of the components. Then you’ve got the finishing of the whole structure, including secondary steel paintings. Then you’ve got deployment into the water or onto a barge or whatever. The logistics around getting it to the point that you need to need to have it. And then you’ve got the turbine integration. And we’ve talked about the turbine integration on the outset, about the size of the market available in terms of turbine suppliers, but also the size of the market available for the cranes to install these giant turbines. But if we look at the ports. You know, the one of the reasons I got into floating offshore wind that really excited me about floating offshore wind was the ability potential ability of floating offshore wind to divvy up more slices of the cake to more company, more companies, but, you know, regions, areas of expertise, etc., etc.. I think Multiport staging strategies is very much on the books still for floating offshore wind. And, you know, I’m very excited about the possibility, at least for our couple of floating offshore wind projects, to give lots of people a bite at the cherry. Rather than focussing, all of our efforts on one super massive industrialised cluster that’s already integrated and ready to go sort of thing. And, you know, clearly, local, regional, local content requirements are going to drive this conversation one way or another. But, you know, whether it’s the fabrication of the components or the assembly of the components or the mooring lines or the turbine integration. Or even just storing components during the construction or the long term O&M. There are so many opportunities for, you know, regional, local port facilities to set themselves up, to be ready to support floating offshore wind. Now, coming to your question, very often the cry I hear from port facilities is if only they would standardised, then I could project what facilities I need. Okay. And it’s an absolutely valid point, that the port facilities raise that. They don’t know what investments required because they don’t know what they’re catering for. I mean, a concrete barge can be. I mean, one of the technologies I’ve been looking at, there’s a concrete barge solution which is very mature and is six times the size of a steel semisub that I’m looking at. And it could equally be appropriate for projects. And, you know, if I’m a port facility and I’m going, right? So I now need, you know, X number of, you know, volume of concrete production facility of this type in order to satisfy these, you know, Y number of concrete barges. And then somebody says, “Ah, I decided to go for steel”, you know, well, okay. It’s a completely different facility. That’s a completely different fabrication capability. What do I do? So I suppose the main thing is for from a ports perspective is to me to focus on the here and now, which is all what are the commonalities across these technologies? Right. I like to think of port facility requirements and hundred and 100 metre areas, you know, and we say, well, I might pull a number out of the sky. I think 20 tonnes per square metre is what we recommend for port facilities to go with. In terms of a quayside loading requirement, it can be adjusted so that it’s only the point load for the centre mass that has to be that high and everything else can be done with spreader beams and or spreader pads or whatever. But then it’s also getting the stuff off the quayside into the water. Yes, some or slipway system. Or do you have, again, a super massive crane that’s to lift the whole structure in one and then drop in the water. Are you dropping these things into the water at all or are you putting them onto a barge, a feeder barge, and then floating them across the world to be deployed where they’re needed? All these questions need me answering. Would I be able to, improve the efficiency of deployment scenarios for ports and investment scenarios, specifically for ports, by standardising and saying, right, we’re all going to use this solution or this solution? Probably. But I would be surprised how many ports would actually secure that investment at the same time. Whereas I think having a variety of technologies allows different ports to specialise. So I wouldn’t I’m not going to sit here and say which ports geographically you need to specialise and what technology. But if I have a limited quayside frontage or shallow water around my quayside, but I happen to have a concrete plant next door. Come on, guys, not rocket science. Whereas if I have the ability to roll steel on sites or create, you know, high grade steel plates, and I happen to have a thousand welders that work on another facility on my quayside. Come on, guys, not rocket science. Let’s focus our efforts and our intentions, our, you know, attentions and intensions on the technology that suits what I’ve got. And then let’s look at quayside investment in order to actually host these things when they’re being either fabricated or assembled or load it out. And so look what has to come to Scotland.

David Linden [00:41:03] But you need I’m assuming you need a partner for that, right? So you need a developer or a group of developers to come out and go. “We actually think that this port can benefit us as well. So and we’re going to specialise in this technology because we do need a bit of demand outlook” in some respects.

Alex Gauntt [00:41:20] Of course. Yeah, yeah, yeah. Yeah.

David Linden [00:41:21] Okay, fine, fine.

Alex Gauntt [00:41:22] Yeah, there’s no doubt, you know, clearly you’re not going to go and speculatively invest hundreds of millions or tens of millions of pounds into a quayside facility on a vague, a vague idea that there is going to be floating wind requirements out there somewhere. Yeah, but what us developers are quite willing to do is, is give you a target market. We’re willing to sit down with the facilities, the port facilities and say, look at this, this is our projections. These are our projections. Speak English, Alex. These are our projections. And this is the size of the challenge that we’re going to present you with and the timeline. And then the, you know, infrastructure investment troops need to then come back and say, well, we can’t be ready for this. What’s your plans afterwards? Or, Well, if we do this, we can provide you with this. It’s about dialogue. It’s about having the iterative call and response on these things. The push pull. The one thing that we need to think about in that in that context, though, is, is it going to be at a premium than importing the whole damn thing? Hmm. That’s a that’s a another topic, I think.

David Linden [00:42:28] You know, I sat down with a steel company yesterday, actually, and talk through, you know, what opportunity do they see in this space. And interesting that they were just confused actually in some respects, because they didn’t quite know how they could help in one way. And I think conversations are happening. Right. But because it’s such an early stage market for them, how to get involved and what to do, it’s still an early stage. But it is true. The point is, is there is an opportunity. There is something they can do, and the conversations are starting. But what I would have liked so far, actually, what you’ve talked about here is is typically when you talk to someone about floating wind, they’ll say, look, it’s about cost reduction, it’s about standardisation and it’s about, you know, maximising local benefit. Right. Because essentially that’s what the law tells that you should do.  Or it’s always the law. It’s a gentlemen’s agreement in some countries verses the law. So let’s wash over that a little bit. But that’s essentially what we’re talking about. But well, I like is you boil it down to actually something a bit more realistic around what’s needed to make it happen. Right. So there are certain factors just out of control, there are certain local, opportunities, technologies, developers and all these things. It’s a much more fragmented market. That doesn’t mean suddenly, as we kind of alluded to in a different part of the sector, you know, it doesn’t mean you suddenly need two, or three developers who are going to do this with this technology. And that’s the answer. And you need six big ports around the world to do it. Actually, there’s quite a… I don’t want to use it fragmented, because that’s typically seen as negative… But I’ll still use it anyway. A more localised opportunity here, where people can take control of this and go “Look here, this is what I want to achieve, this is how we do it.” You don’t need to reinvent the wheel. Yes, that’s an investment required. But if people sign up for it, they can get local benefits, they can develop the technology that’s appropriate and that’s going to work. And they can do it in a cost effective manner.

Alex Gauntt [00:44:26] Absolutely. And, you know, if I look at my execution models and I look at the cost benefit of shipping something hundreds of miles across open sea, fully assembled, even if it’s without the turbine versus, you know, finishing it off locally, assembling it locally or fabricating it locally, and then deploying in the water just a couple of kilometres from the site that it ends up living on. Yeah, it does. There’s a lot of benefits to be had. Now I can’t promise that those benefits directly count away, you know, maybe enhanced labour costs for some regions versus others and that sort of thing. But it’s definitely a cost benefit analysis that needs to be undertaken for each windfarm, each floating wind farm and they have its own. I had to giggle though when you’re talking about standardisation though from like I said, 18 years of offshore wind, both the development, the supply chain side of things. I would love to ask those respondents what is a standard wind farm? I have lost count how many offshore wind farms I’ve been involved in and never were the two the same.

David Linden [00:45:35] Yeah. And I guess, I guess it does come down to that. What you’re saying this of the initial component angle is what, people are looking for cost reductions, right? Essentially that’s what they’re focussed on and they’re looking for ways and it often comes down to how do I manufacture and install essentially this particular wind farm and then therefore which bit can I standardise? It’s pretty much the question you ask when you’re building a car, when you’re you know, of course you can get every version of leather and you know, you have some people driving left. Other people drive on the right, whatever, right. But you’re trying to create a platform that you can work from. And I guess that’s the same here, but actually. What you’re saying is I think it’s slightly different in the sense of even from the construction, installation phase of things, there is actually benefit to a bit more locality and not pure standardisation and mass scale. While that might be nice to hear for some people actually there is also a localisation angle to it.

Alex Gauntt [00:46:33] And I think and it doesn’t just start and stop with the construction aspects, now O&M cannot be overlooked, right? Having a local O&M base to the wind farm is just the logical thing to do. And particularly when you have regional clusters such in the Celtic Sea, you know, being able to share an O&M base and O&M vessels. This makes an awful lot of sense. I don’t know how it’s going to work contractually between the developers, particularly, they’re competing against each other for the same sort of CFDs. But in principle, you know, there’s a lot of opportunities there. And looking even further earlier into the supply chain, if you look at the raw materials, obviously, with the current problems in the world, steel price has gone bananas. And yeah. If? When? If the steel price comes down significantly enough, I would welcome a conversation with a broker or some wholesaler trader who decides, right, we’re going to stockpile this steel at this price and then guarantee the developers a fixed price for their steel going forward based on a whatever. And, you know, these sort of conversations need to happen because if ultimately you’re talking about tons of steel per megawatt and that tons of steel is going up 100% year on year in terms of price. Mean we’re not that bad yet but you know, if it did, then that changes the fundamental economics at the wind farm. And finding local partners who are willing to combine forces and say, well, let’s see if we can solve that issue. Is a, that’s an untapped area for me.

David Linden [00:48:19] Yeah, I’m not a contractual expert. Maybe a CFD pass through mechanism could be an interesting one, when everyone either sort of benefits or not across the supply chain, you will equally benefit and guarantee a sort of margin. And, and that’s why, you know, you’re encouraged to get involved.

Alex Gauntt [00:48:36] That’d be interesting.

David Linden [00:48:37] Probably verging off a little bit there. But, look, time always runs away from us. But I have, I want to go back up to the macro scale, I’m sure we’ve missed lots of good points, unfortunately. But. You know, you know, time is never our friend in these things. So I think we’ve run out of time a little bit at talking through some of those really interesting commercial and opportunities, but also the challenges of making that market happen, I would say was quite a positive tint, to be frank with you. But if we take it back up to the macro level, where would you say if the markets that we’re talking about for this, which ones are going to go first and sort of why.

Alex Gauntt [00:49:18] For deployment at scale? Or do you mean ?

David Linden [00:49:22] Okay, maybe maybe. It should at a very high level. Can this painting the picture where some of this stuff is happening, you talked about, you know, demonstrators as you talked about, you know, some of the things your company is doing, etc.. But where essentially is this market sort of starting to blossom and where is the opportunity starting to grow, etc.? So yeah, for transparency, we track the pipeline of projects.  I have an indication of that in my head. Yeah, but as you as a player. Who’s in the market day to day where you see things blossom and where you what, where’s the market looking like it’s going to start to grow with first.

Alex Gauntt [00:50:03] Good question. For floating offshore wind specifically?

David Linden [00:50:07] Excuse me. Yes, floating. Floating. Yes.

Alex Gauntt [00:50:09] So, I mean, clearly I’m going to say the Celtic Sea. The Celtic Sea is a supreme example of a staged approach. A stepping stone approached where, you know, we’ve got gigawatt scale ambitions for offshore wind deployment in the Southern Celtic Sea and the Celtic Sea in broader sense. And, you know, the approach is to go for the kind of sub 300 megawatts first before 2030 and then thereafter going into the pre-commercial and commercial scale wind farms. So I think that’s very exciting. Clearly hot on its heels to me with a UK bias is Scotland and the announcements there. You know, it’s exciting to see the amount of floating offshore wind that was incorporated within the Scotwind leases and I’ll be following that market extremely closely as it’s also on my doorstep. And then, yeah, thereafter. I mean, I don’t actually know the timelines on Korea, on South Korea, but I hear that a lot about that being a market to watch closely. I’m sure you guys know better than me.

David Linden [00:51:24] Yeah, I mean, the question is always about timeline, but it’s also about the scale of projects, right? So countries that surprised me a little bit are places like Sweden, Australia, places like that. That  you rarely hear about if you think about. You know, the grand scheme of things. And you maybe have made more about places like Japan, but actually Japan’s got quite a small pipeline and it’s a bit further away. So some of these other countries that have popped out actually with some big pipelines, big opportunities. Yeah. Questions around timescale. Sure. I think they’re the ones you’re looking at as well know.

Alex Gauntt [00:52:00] One market that you haven’t mentioned there is the West Coast of the U.S., that market space to me in terms of industrial scale deployment of tens of gigawatts of floating offshore wind. Because let’s be realistic in terms of fixed bottom offshore wind, there’s going to be a limited availability off the West Coast of the U.S. So if BOEM is going to move forward with the recently announced leasing round. That’s going to go big guns for floating price. And clearly, that’s one of the reasons that we’re in the West Coast to the U.S. with our four turbines, four turbine demonstrator CADEMO before they’ve even made a decision. But they’ve progressed.

David Linden [00:52:55] Oh, there’s a certainly appetites out there. You’re absolutely right. And yet it does require things like a leasing round to unleash some of this, which is fair. Right. Versus folks just coming up with project ideas, coming out there and saying, here you go. Right. And I don’t see a lot of the projects are much smaller scale right now. So so when we do talk about it and you do it to the right, the sub 300 megawatts, what we’re talking about gigawatt scale projects right now, they’re fixed. So there is still a size difference. It’s always a bit unfair to compare things on a gigawatt basis. So, look, last question. And it’s a single answer that you need to give, I’m afraid. What’s your estimate for 2030 floating wind installations? Shall I’ll tell you ours And then, then so we have around the 15 gigawatt.

Alex Gauntt [00:53:50] 15 gigawatts of floating wind by 2030?! Yeah, okay. I was gonna say two.

David Linden [00:53:55] Wow, look at that. That’s amazing. Yeah. So you keep flying. I mean, essentially, look, if I was to look. At what we’ve got, if you look at call to our competitors, if you look at GWEC as well, and all of these other guys that put out forecasts. We’re all in the similar sort of ballpark. Some are actually much higher than that…

Alex Gauntt [00:54:17] …by 2030?!

David Linden [00:54:18] By 2030.

Alex Gauntt [00:54:19] Installed and operational by 2030?!

David Linden [00:54:22] Yeah. Yep yea.

Alex Gauntt [00:54:24] Hey. who am I to question that?

David Linden [00:54:27] We should talk more about that afterwards. Yeah. Interesting. Right. So there is the market is going to grow superbly fast. Because there are a lot of little things going on around the world that surprise people. And, you know, the pipeline is big. You know, the pipeline of projects is really, really big around the world. If you take, you know, Sweden, I think we’ve got 18 gigawatts against it as pipelines that already, as projects that are already being announced as something that they would like to do. These are on concept phase, granted. Right. And they’re far, far out. But think about that. You know, there are big opportunities. But it’s interesting to listen to, you know, but it’s interesting to listen to around the supply chain challenges.

Alex Gauntt [00:55:16] I’d be even keener, I think, trying to identify those markets that haven’t been tapped yet.

David Linden [00:55:24] Well, that list is long. I tell you that. That list is long.

Alex Gauntt [00:55:28] What I like to hear. Yeah.

David Linden [00:55:30] Oh.

Alex Gauntt [00:55:30] Music to my ears. Music to my ears.

David Linden [00:55:33] That’s another whole area in itself. But look, I mean, that’s what we’re looking at there. And it’s so.

David Linden [00:55:37] Fascinating to hear your I don’t want to say. You know, the two versus 15 or something, we should use those as perfect numbers because. We you know, as I think our conversation kind of said today is essentially it’s all an uncertainty. Right. That that’s part of it. And, ut but even 15 gigawatts would make the market only something like 4% of the total installed base. Right. So it’s still a smidgen, if you dont mind me saying it in those words. And it is a post 2030 story is probably a realistic phrase to use. But yeah, that’s fascinating. So.

Alex Gauntt [00:56:09] Exciting. Yeah. I mean, it’s. Super it’s like a super. Exciting, super exciting market space to be part of. You know, I’m really looking forward to where we’re going to be in the next ten years. I think I think you’re right. I think it’s the real story is the post 2030 scale of deployments. At what point are we going to outpace fixed bottom offshore wind with floating offshore?

David Linden [00:56:31] Ha, it’s going to become like a nice trivia podcast.

Alex Gauntt [00:56:37] Just like I see a nice little, like double curve. Yeah, that’s the sort of thing I think. Yeah, that’ll be very exciting to watch.

David Linden [00:56:47] There’s a lot of fixed bottoms still to go, right?

Alex Gauntt [00:56:49] I know, I know. That’s why I mentioned it. You know, so many markets. So little time.

David Linden [00:56:57] All right. With that, Alex, thank you so much. For your time. We did go over time a little bit, I think, of what we tried, but I think it was definitely worth that. We recovered a huge amount there. So thank you for that. Well, essentially you’re taking time out of your good day to share that with us.

Alex Gauntt [00:57:13] Thank you, David. It’s an absolute pleasure to speak to you again. And yeah, I look forward to seeing the other fantastic recordings and podcasts that you guys release over the coming years. Be watching them closely, listening to them closely.

David Linden [00:57:27] Wonderful.

Alex Gauntt [00:57:28] Thanks very much.

David Linden [00:57:29] Thank you so much. And thanks, everyone, for listening as well. Hope you enjoyed that one. Please make sure you subscribe. Give us a good rating. Share with your friends and talk to you next time.

 

 

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