Dutch contractor Van Oord has secured €500 million ($535 million) worth of contracts to supply offshore wind vessels for installing turbine foundations on Poland’s Baltic Power wind farm and laying cables on the Greater Changhua 2b and 4 arrays in Taiwan.

Growing concerns about a shortage of vessels able to handle a larger generation of wind turbines and foundations has stoked demand for specialised vessels, sending dayrates climbing and prompting some developers to secure longer-term contracts.

The co-developers of the Baltic Power offshore wind farm, Polish fuels group Orlen and Canada’s Northland Power, have moved to secure the services of Van Oord’s heavy-lift installation vessel Svanen.

The Baltic Power array will be located 23 kilometres from shore and feature 76 wind turbines with a total capacity of 1.14 gigawatts.

Expected to supply renewable energy to more than 1.5 million households in Poland, Baltic Power has been feted as the country’s first offshore wind farm.

Van Oord will transport and install 76 wind turbine foundations, each consisting of a monopile and a transition piece, and an additional two foundations for offshore substations.

The work is scheduled to begin in 2024 and is expected to be completed in summer 2025, Van Oord stated.

The Svanen has previously worked on projects in the Baltic Sea, including Baltic 2, Arkona, Danish Kriegers Flak and Baltic Eagle.

Back in Taiwan

In Taiwan, Van Oord’s cable-laying vessel Nexus will provide transport and installation services for Orsted’s 920-megawatt Greater Changhua 2b and 4 project, located 50 kilometres off the west coast and expected to supply renewable energy to about 1 million households per year.

The three export cables required for this project total about 175 kilometres in length, Van Oord stated, with operations scheduled to begin in 2024 and expected to be finished in 2025.

Van Oord also said it will use its own liquefied natural gas-powered hopper dredger Vox Apolonia to pre-excavate cable joint pits down to the necessary burial depth and the trencher vessel Dig-It to bury the cables to the required depth.

Van Oord completed cable installation works at Orsted’s’ Greater Changhua 1 and 2a array earlier this year.

Rising rates, faster payback

The dredging and offshore construction specialist did not reveal terms for the new agreements, but the contracts were awarded against a backdrop of rising rates.

In its latest report on offshore wind, London-based shipbroker Clarksons highlighted a record dayrate for a wind turbine installation vessel of $362,000 for one of Eneti’s newbuild vessels, chartered for between 120 and 180 days.

The report suggested these rates implied full payback on a $327 million newbuild investment in just 3.2 years.

The dayrate was described as an industry high for a contractual term of more than six months and followed on from a rate of up to $347,00 per day for another Eneti newbuild contract awarded in September.

Eneti did not disclose which offshore wind project the installation vessel will serve, but Clarksons suggested that Norway’s Equinor and Polish partner Polenergia were the likely customers, for the 1.44 GW Baltyk 2 and Baltyk 3 bottom-fixed wind projects in Poland.

To support this, Clarksons noted that Oslo-listed Subsea7 announced the very same day that its subsidiary Seaway7 had secured a “substantial” contract from Equinor and Polenergia for 200 kilometres of inter-array cables for MFW Baltyk 2 and MFW Baltyk.

“Offshore dayrates have been steadily increasing, driven by robust demand in both the oil and gas sector and the offshore wind industry. This surge in dayrates is a result of heightened activity in these sectors, with offshore wind projects experiencing remarkable growth,” Clarksons’ offshore renewables director Jens Egenberg said in the shipbroker’s latest renewables report.

The Clarksons report showed a steady rise in dayrates for wind turbine installation vessels, floating foundation installation vessels and cable lay vessels since the price troughs of 2017.

“Contracts for these assets are being secured for the years 2026-2027, at record high rates, reflecting confidence in these markets. Limited newbuilding activity in the installation asset sectors is expected to continue exerting upward pressure on dayrates, making them a significant focus for industry stakeholders and investors,” Egenberg wrote.

Clarksons noted that rates have also risen for support vessels such as crew transfer vessels and commissioning service operations vessels since 2020.

US concerns

Vessel availability has also been cited among the factors undermining the viability of US offshore wind projects with terms and conditions that left developers exposed to surging supply chain inflation and rising capital costs

When Orsted chief executive Mads Nipper ruled out reviving the development of the cancelled Ocean Wind project last week, he cited vessel availability as central to the supply chain issues that have affected the project.

In an analyst call Nipper said a lack of backup vessel availability in the market “would indicate a multi-year delay of the entire project”.

* A version of this article first appeared in Upstream’s sister title Recharge.

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