Hope on the horizon

With business generally looking flat or worse, many ports see the offshore wind sector as their new hope. Felicity Landon reports
There aren’t many days go by without a new headline about another port or port cluster explaining their particular virtues when it comes to serving the offshore wind sector.
Obviously, there are likely to be winners and losers in the game – but there appears to be quite a lot of gamesmanship here, with developers hesitating to commit and ports understandably reluctant to invest until someone has signed on the dotted line.
Add in the current review of the UK’s Renewables Obligation Certificates, with power companies waiting to discover the new levels of subsidy, and there is even more uncertainty.
The UK’s Round 3 developments have already slipped back from their original suggested dates, as the developers consider their strategies, especially as they move into ever deeper water, with some big challenges for construction. “It will be well into 2015 before you see anything fundamentally going on – it was originally expected to be 2012/13,” says Martin Lawlor, chief executive at the north-east UK port of Blyth.
“I think over this next 12 months there will have to be some decisions made by developers – not only in terms of whose turbines they might be buying, but also manufacturing, committing to ports, etc. Harbour revision orders will be needed. You are looking at 12-18 months minimum for a small scheme; by the end of 2013, if firm decisions are not in place, things are not going to happen by the end of 2015, so it will all go back further.”

Short-term view
It’s an odd situation for ports, which are used to dealing with well-established organisations that take a look round the facilities, discuss the options, sign a 10-year deal and get on with their trade.
Richard Marks, business development director at Royal Haskoning, says: “We are talking about mostly big utilities companies. They don’t know precisely what they want to do, but they know pretty well. But they all keep changing their minds – and it isn’t helped by the British government trying to pull out the rug by casting doubt on its support for the offshore wind farm industry.”
The developers with concessions for Round 3 do want to sign, says Mr Marks: “But being large utility companies, they are used to getting their own way, and they are playing one port off against another. The ports are finding them difficult to do business with.”
While the developers are ‘very keen’, they basically don’t want to pay more than they have to, and are leaving it to the last minute, he says – “but when you think of infrastructure and planning consents, etc., the building of what’s needed could take two to three years”.
At the port of Hull, ABP has an MoU with Siemens to develop a wind turbine factory, while further south at Sheerness, Peel Ports has signed an option agreement with Vestas for a wind turbine manufacturing and installation facility. Although nothing is so far set in stone, these two ports are both in a strong position because of their land availability, deep water and good access, says Mr Marks.
In fact, he says the philosophy of wind farm developers varies considerably; some choose to have one port near to the field, bringing everything to that port and shipping it all out from there. Others have a multiport approach, shipping components straight to the field.

In the running
Also, just because some North Sea developments are in UK waters and others are in Dutch waters, for example, it doesn’t necessarily follow that these will be serviced from UK or Dutch ports, respectively. Everything is up for grabs and Mr Marks believes that ports such as Dunkirk, Esbjerg, Bremerhaven and the Zeeland ports of Vlissingen and Terneuzen are among those well placed to win business.
In the UK, Bathside Bay has obvious possibilities as Hutchison Ports (UK) seeks to use the site as a ‘wind port’ until trade picks up sufficiently to justify a new deepwater container terminal.
The Port of Blyth has built up a reputation for handling components for inland wind farms; it also has the benefit of the National Renewable Energy Centre (Narec) and its test facilities based on the port, as well as Alnmaritec, the aluminium boatbuilder with a focus on the offshore wind sector, and MTL, which uses Blyth as its base for supplying secondary steelwork for wind turbine foundations, including access ladders, transition decks and boat landings.
Blyth would also be one of the ports eligible for some financial support, either because of its status as an ‘Assisted Area’ or because it is within a newly designated Enterprise Zone.
So far the port has focused on Tier 2 and 3 suppliers and companies not specifically tied to the big manufacturers, says Mr Lawlor. “If Siemens develops its big facilities at Hull, a certain element of the supply chain will go and locate next to them; it will be the same with Vestas at Sheerness,” he says. “But we want to be a ‘free house’, not linked to any particular manufacturer or developments. We are well located but we are not having to wait for a big manufacturer to commit.”
Blyth is looking at potential sites for a helipad and considering other associated facilities; it is also looking at possible operation and maintenance (O&M) business. “But one thing we have made absolutely clear, although we have a reputation as a leading renewables port, we are not going to kick out other sectors in some sort of push to maximise the available land. We want to be successful and pick up our share of wind farm business, but not at the expense of other sectors.
“Some ports are potentially putting a lot of eggs in that basket; our view, from past history, is make sure you have plenty of baskets.”

Worth a punt
So, what are the risks of investing, and are the rewards worth it?
“A wind farm construction project is relatively short-term – maybe 2014-2020,” says Mr Marks. “Ports are more used to ten-year deals.”
He says few ports would be willing to speculate, but adds: “Some ports could make an infrastructure investment which they could later use for something else – it might be a good way to get a step on the way.
“A number of ports are looking for O&M but on a much smaller scale – and again, all the developers have different strategies.”