You’re Going to Need a Bigger Fleet

In 2016, Rhode Island-based Atlantic Wind Transfers (AWT) put into service the U.S.’ first-ever vessel purpose-built for offshore wind services. The 21-meter crew transfer vessel (CTV) Atlantic Pioneer was constructed by Blount Boats to serve America’s first commercial offshore wind project, the five-turbine, 30-megawatt (MW) Block Island Wind Farm, which became operational in the final month of 2016.

In the years that followed, some developments began to inch forward, but the pace of progress for U.S. offshore wind was mostly stop-and-go, and it wasn’t until 2020 that the next two Jones ACT CTVs were delivered and the second offshore wind project sprouted up in U.S. waters. For those keeping score, the U.S. currently has only two operational projects for a total of 42 MW, supported by three purpose-built CTVs. But that’s about to change, with a steady stream of projects expected to advance in the coming years.

“The U.S. East Coast is certainly giving cause for real optimism with a clear pipeline of state procurement targets indicating 12 gigawatts (GW) installed by 2030 and 29.1 GW total installed by 2035. That means around $55 to $87 billion of capex, which will support the growth of the significant domestic supply chain,” said Philip Lewis, Director of Research, World Energy Reports.

“We are forecasting that 2021 will deliver a step-change in offshore wind activity in the U.S. as the journey accelerates to develop its project pipeline,” Lewis said, noting that one project, Ohio’s 21 MW Icebreaker project on Lake Eerie, has been approved and is addressing final challenges prior to construction. “Short- to medium-term activity will be delivered by 11 Northeast and Mid-Atlantic projects that are seeking federal construction permits, for approximately 9 GW.”

Lewis noted that a recent executive order from President Joe Biden is likely to provide an impetus to accelerate the federal project environmental impact assessments and construction approval process for imminent projects that will, in turn, drive the developing “Made in America” domestic supply chain. Signed in January, the order instructs the Secretary of the Interior to identify steps to double renewable energy production from offshore wind by 2030. Already in the early months of the new Biden presidency, the administration has stated in clear terms that offshore wind, American manufacturing and the Jones Act will receive full support—welcome news for a domestic supply base that has been chomping at the bit to begin building up America’s next big energy source.

Marking another positive for the nascent sector, the U.S. Bureau of Ocean Energy Management (BOEM) in early February said it would resume environmental review of the 800 MW Vineyard Wind project off the coast of Massachusetts. This is seen as an encouraging sign after Vineyard Wind withdrew from the years-long permitting process in December while it mulled possible design changes resulting from a switch in turbine manufacturers.

These advances, and many others including large state procurement commitments, will see the U.S.—finally—emerge as major offshore wind player, heralding a new dawn for a diverse and expansive industrial supply base poised to pounce at this once in a generation opportunity.

The vessels

An important piece of the evolving puzzle will be the U.S.-flagged vessels deployed to service this growing industry, from planning and construction through operations and, eventually, decommissioning. This includes both existing and new, purpose-built tonnage.

It was long pondered (and argued) whether the Jones Act—a federal law requiring goods transported between U.S. ports to be carried on U.S.-flagged vessels built, owned and crewed by Americans—would apply to offshore wind activities. Now, at long last, ambiguity has been put to rest, clearing a path for significant investment in the Jones Act fleet.

A January ruling by the U.S. Customs and Border Protection (CBP) stated explicitly that the Jones Act applies to the transportation of merchandise from U.S. ports to locations on the outer continental shelf (OCS) for the development and production of wind energy. The ruling is the first since the National Defense Authorization Act (NDAA) for fiscal year 2021 included an amendment clarifying that the Outer Continental Shelf Lands Act (OCSLA) —the 1953 law governing all offshore mineral and energy development—also applies to non-fossil fuel energy sources such as offshore wind. It will fully enforce the Jones Act and other federal laws for all offshore renewable energy production in the United States’ Exclusive Economic Zone (EEZ).

Even before the ruling, a large number of existing U.S.-flagged vessels have been and are currently operating in support of offshore wind. The Vineyard Wind project alone, still at least two years away from breaking ground, already has created work for more than 20 U.S.-flagged vessels. Companies experienced and well known in the oil and gas sector such as Tidewater and Bordelon Marine have vessels deployed in activities related to U.S. offshore wind, and others are eyeing opportunities too. Maritime transportation and services firm Crowley, which announced the formation of its New Energy division in January, said many of its existing U.S.-flagged vessel assets, engineering and logistics services could quickly and easily pivot to support the offshore wind industry.

Then there’s the vessels built specifically for U.S. offshore wind. Necessary will be CTVs like the Atlantic Pioneer, as well as service operation vessels (SOV) and wind turbine installation vessels (WTIV), among others.

In addition to AWT’s Atlantic Pioneer commissioned in 2016, last year saw the launch of two new Jones Act CTVs—WindServe Marine’s WindServe Odyssey and Atlantic Wind Transfers’ Atlantic Endeavor, built at Senesco and Blount respectively. CTVs are typically aluminum catamarans, used for transporting wind farm technicians and other personnel, and sometimes equipment, out to sites on a daily basis.

Josh Diedrich is managing director at WindServe Marine, an arm of Reinauer Transport Companies formed in 2018 specifically to support the U.S. offshore wind industry. He said past industry setbacks and challenges do little to take diminish the many positive developments contributing to the current momentum buildup. “There’s already been a large financial investment into the industry from foreign and domestic sources, and we see that greener energy and technologies are the way of the future. We believe in it, and we see it as well. Regulatory-wise, administrations are moving toward greener economies. Offshore wind is good for the economy, it's good for the environment, and, overall, it's the way that we believe the country's going.”

Diedrich said WindServe Marine is prepared to build additional vessels, including CTVs and SOVs, when the time is right. “We're in a holding period, just waiting for the industry to kick off, because right now there's no definitive date for the next projects going online. The dates will be far enough out that we don't have to start building just yet.”

“One of the biggest hurdles is the environmental impact study that everybody's waiting to hear back for the Vineyard project. After that happens, we think a lot of doors will be opened and a lot of questions will be answered.” Diedrich said. “We're here for the long run, and we're patient at this point, and we know that we're in a good position to succeed in the industry.”

“People have been waiting, some upwards of 10 years for offshore wind to bloom in the Northeast. But it's coming soon, and when it does it's going to open a lot of opportunities in the Northeast, Diedrich said. “We believe each of the yards capable of building aluminum vessels will have multiple orders at a time. There'll be busy. We believe all the ports will be busy, and people with waterfront property will be busy with offshore wind vessels, whether it be survey vessels, CTVs or SOVs. Dockage is going to be at a premium. We know from working on the CVOW project that there's a lot of vessels needed for one project. It's going to be very, very good for the Northeast region.”

Another type of vessel currently being developed to support the U.S. offshore wind industry is the SOV, used during the operation and maintenance (O&M) phases of wind farm projects, serving as an at-sea base of operations to accommodate and transfer technicians, tools and equipment to and from the individual turbines. Whereas CTVs are typically aluminum and used for shorter daytrips, larger SOVs are often made of steel and used for farther, sometimes weeks-long treks offshore.

Offshore vessel operator Edison Chouest Offshore (ECO) is building and will operate the first-ever U.S.-flagged Jones Act-compliant SOV for long-term charter with Ørsted and Eversource to service the planned Revolution Wind, South Fork Wind and Sunrise Wind projects in the northeast U.S. The vessel will be the first of its kind in North America.

The 80-meter-long SOV, to be classed by ABS and built at a combination of ECO’s shipyards in Florida, Mississippi and Louisiana, will be capable of housing 70 passengers/wind turbine technicians, will operate on diesel-electric power meeting EPA Tier 4 emission standards and will feature ECO Variable Frequency Drive to reduce fuel consumption and greenhouse gas emissions.

ABS has also given approval in principle (AIP) for a pair of SOVs designed by Vard Marine: the 70-meter VARD 4 07 US SOV and the larger 85-meter VARD 4 19 US SOV, both customized specifically for the U.S. market. New Orleans-based Technology Associates, Inc. (TAI) recently unveiled its range of EnviroMax SOV designs for the U.S. market, offered in “S” (small), “M” (medium) and “L” (large) classes.

Perhaps the most closely watched vessel class, and certainly the most expensive, is the WTIV, used for the installation of offshore wind turbines. With a significant pipeline of offshore wind capacity due for installation over the next decade—both in the U.S. and internationally—access to these high-value assets is of strategic importance. Currently no Jones Act WTIV exists; it took foreign-flagged WTIVs combined with feeder vessels to build the Block Island and CVOW pilot projects. “Given the pipeline of U.S. projects, we believe that we'll see a combination of Jones Act compliant and foreign-flagged WTIVs, coupled with locally-flagged feeder and support vessels,” WER’s Lewis said.

In December, shipbuilder Keppel AmFELS laid the keel for the first ever Jones Act-compliant offshore WTIV at its shipyard in Brownsville, Texas. Dominion Energy contracted with Keppel AmFELS, a wholly-owned U.S. subsidiary of Keppel Offshore & Marine Ltd, for the engineering, procurement and construction of the vessel, to be named Charybdis.

“This is a monumental step for the offshore wind industry in America,” Robert M. Blue, Dominion Energy's president and chief executive officer, said in a statement at the time. “[The vessel] will provide significant American jobs, and provide a reliable, home-grown installation solution with the capacity to handle the next generation of large-scale, highly-efficient turbine technologies.”

Designed by NOV business unit GustoMSC, the vessel's hull has a length of 472 feet, a width of 184 feet and a depth of 38 feet, making it one of the largest of its kind globally. The $500 million WTIV, will be based out of Hampton Roads, Va. and is expected to be available to support U.S. offshore wind turbine installations by the end of 2023, Dominion Energy said.

Once constructed, the vessel will be available for charter, including by Dominion Energy Virginia, subject to the approval of the Virginia State Corporation Commission, in connection with the installation of its Coastal Virginia Offshore Wind (CVOW) commercial project.

Dominion Energy said it expects the vessel to be fully utilized in support of the installation of over 5 GW of planned offshore wind generation off the East Coast of the U.S. through 2027 and beyond.

In December, the nation's largest dredging services provider Great Lakes Dredge and Dock (GLDD) revealed it is working with Ulstein Design and Solutions B.V. to design and develop the first U.S.-flagged Jones Act compliant, inclined fallpipe vessel for subsea rock installation vessel to support America's burgeoning offshore wind industry. The specialized vessel will be built at a to-be-determined U.S. Gulf Coast shipyard and could be operational as early as the first quarter of 2024, GLDD said.

GLDD CEO, Lasse Petterson, said, “We have been talking to various yards around their capabilities of their ability to build this vessel, and those discussions have been preliminary. We have a conceptual design for this vessel at this point in time. So, it's really a just a discussion on the size, the length, the width, the breadth, the type of equipment to onboard. We have had some very good conversations, and the yards are capable of constructing the vessel. Once we have completed the regulatory design for the vessel, then we go to the yards and go out for tender pricing and get their offers for what it will cost to build.”

GLDD is currently in the process of relocating its corporate headquarters from Oak Brook, Ill. to offshore expertise hub Houston. In January the company hired industry veteran Eleni Beyko as senior vice president for offshore wind, an indicator of the significant business potential GLDD sees in the offshore wind industry. “When we look at what the opportunities that are here in front of us in the United States, it gives us a very large upside when it comes to participating both in construction, in supply, in operations,” Petterson said. “I'm really excited about this opportunity for the American companies and American industry to participate.”