Crowley, Esvagt Team to Tackle Offshore Wind Opportunities
When Crowley dives into a market sector, the industry pays close heed. To that end, all eyes were on Crowley late last month when it announced a joint venture with Danish shipping company Esvagt, a deal that should indicate ‘fair winds and following seas’ for the U.S. offshore wind industry. The week before the deal was announced, Jeff Andreini, VP, New Energy Division, Crowley interviewed with Maritime Reporter TV to discuss this joint venture, as well as the opportunities and challenges ahead.
By Greg Trauthwein
Jeff Andreini, VP, New Energy Division, is a 42-year veteran of Crowley, and in fact his grandfather – who helped him get his first job – was the longest-tenured Crowley employee ever, and the only one to work with all three generations of Crowley’s. Andreini’s experience with Crowley is broad based, and he has worked in nearly every division – from the administration to operations – and geographic local, from the west to the east coast, currently working out of Crowley’s Houston office. To overstate the obvious, Andreini knows the Crowley brand and capabilities inside and out.
“(With offshore wind) there is an excellent opportunity for Crowley, and I think is an opportunity for a lot of different companies in the U.S. For us, offshore wind is in the wheelhouse of what Crowley is all about. We are a marine transportation and a logistics company, and at its core, this is what offshore wind is about as well.”
“Since the Biden Administration has taken over it’s been like a tidal wave of information and requests that have come out over the last 50 days. And I anticipate that’s going to continue in earnest over the next at least two years, if not longer.”
Despite a number of stops and starts in offshore wind, the U.S. seems primed and firing on all cylinders to make the fledgling U.S. industry a global powerhouse by 2030, with broad and growing political, economic and industrial support, an evolution that could help to lift the maritime, offshore energy, subsea, port and logistics sectors for generations to come.
“It's the long-term play, not only for a company like ourselves, but I would say many different companies within” said Andreini. “We are moving into a new world, where, by 2040 to 2050, you're going to see a reduction to zero greenhouse gas emissions.”
Preparing for the Job
While the opportunity is great, it does not come without challenges, and one of the chief challenges today is simply ensuring that there are enough physical maritime assets – from Wind Turbine Installation Vessels (WTIV) to Service Operation Vessels (SOV) to Crew Transfer Vessels (CTV) to ensure that there is an ability to install and maintain at pace, particularly as other world markets come online with offshore wind.
“There's not enough assets at this point and time. And I think a lot of people in the industry would tell you the same thing,” said Andreini. “When we look at our feedering systems that we're offering up to the installers and the developers, and the amount of time they're going to need those barges, and just the cross section of all the different jobs that are going to be occurring at the same time, the assets are going to run dry very, very quickly. And not just the barges, you're going to need tugboats as well. In some cases, you might need two tugs for every feeder barge. So if you're talking about using our equipment as an example, we could be doing a wind farm for installation for roughly two years straight, with two barges, and potentially with four tugs.”
While the specialty vessel construction challenges are one aspect, they are not alone in the list of hurdle. “I think that we should all should understand is the terminal infrastructure side,” said Andreini. “A lot of the marshaling facilities are being built up today. But still, there's a lot of green and brown field facilities that have been identified that still need to be dredged and built-in time to get going here by 2023. So the nation has a tremendous amount of work. Since the Biden Administration has taken over it's been like a tidal wave of information and requests that have come out over the last 50 days. And I anticipate that's going to continue in earnest over the next at least two years, if not longer.”
Globally, the maritime industry faces a number of transcendent changes to its business model, from digitalization to autonomy to decarbonization; changes that will require collaboration for even the largest players to succeed.
For Crowley that meant announcing a a joint venture with Denmark’s ESVAGT to build, own, and operate U.S.-flag SOVs.
L to R: Søren Karas, CCO, Esvagt, and Peter Lytzen CEO.Image: Esvagt
“SOVs, in my opinion, next to wind installation vessels, are the most capital-intensive asset in the offshore wind industry,” said Andreini. “This is a relationship that the company has been working on for months, and we are excited to share it with everyone, as it legitimizes that offshore wind is for real.”
Consistent with the requirements of the U.S. Jones Act, Crowley will own and operate the vessels with its U.S. mariners, while Crowley and ESVAGT will share in the economics of the venture. ESVAGT is the leading Service Operation Vessel (SOV) operator in Europe and will provide technical advice on the design, construction, and operation of these vessels based solidly on their past performance with this specific vessel type. The venture will work to develop a best-in-class design and deliver its first wind-dedicated, U.S flag SOV.
This deal comes on the heals of another partnership between Crowley and Watco to serve this fast growing market, a partnership designed to fast track the logistics of offshore wind, as Watco is heavily engaged in the onshore wind business and runs its massive ‘Green Ports’ facility in Houston, a facility which handles a variety of project cargo but is dominated by work supporting onshore wind.
“Watco brings strong experience in terminal management, and even though it's onshore wind, I believe it's transferrable to the offshore side as well,” said Andreini.