In 2002, HSM Offshore built the offshore substation for the first offshore wind farm, the Danish Horns Rev 1. Almost 17 years and several wind farm generations later, the Dutch manufacturing company is still building offshore platforms for the wind energy industry. The latest being the Borssele Alpha and Beta platforms.
You won the contracts for both the Borssele Alpha and Beta substations, how are the activities developing?
The contract for the Offshore High Voltage Substations include the jackets and the topsides. At the moment, we are putting the finishing touches to the topside of Borssele Alpha. We signed the contract for this 700 MW offshore platform in March 2017. In the Summer of 2018 we already installed the jacket. All the welding has been finished and we are now testing all systems. We are looking to install the topside sometime mid-May. The installation is contracted to Seaway 7. Once the topside is installed, it will take a few months to organise and connect everything. The whole platform should be operational by the end of August.
You also made a start on the construction of the Borssele Beta platform. Are there any differences to mention?
We are currently working on the jacket and topside for Borssele Beta. The jacket is almost completed and due to be ready for installation mid-May as well. The topside for Borssele Beta is planned to be installed spring 2020. Borssele Alpha and Beta are the first platforms to be built following TenneT’s standardised offshore connection design. The hearts of the platforms are the same but the full design is adapted to the site specific requirements such as water depth. Alpha is a pilot, so most work went into this platform. Due to the time pressure, we had to start the construction while we were still optimising the design. There are, of course, always some lessons learned when you build a first platform but nothing major in this case. For example, for Borssele Beta, we researched how we could make the construction process for the jacket more efficient. We didn’t change anything in the jacket design itself but we did change the construction method.
What are the main challenges in building an offshore platform?
TenneT holds the responsibility to ensure that an offshore platform is operational at all times in order to guarantee a continuous electricity supply to its clients, the energy companies. Therefore, the platform needs a high availability. Great care and attention is paid to this, both in the design and during the construction of the platform, to prevent future failure of the systems. All this requires a well thought design and a properly organised coordination. At the peak of construction activities there are over 400 persons involved. These are our own people and temporary contracted personnel like welders and fitters. We have also subcontracted several activities, including electrical and instrumentation, piping and HVAC. And then you have the representatives from TenneT and our vendors and the inspection people. You can imagine the coordination it requires to ensure that everything is working smoothly!
Will the other OHVS’ also work with the same design?
Tennet has become the owner of the design. This design was included in new tender packages and was used as the basic design for the next platforms. The builders of these platforms will probably add their own design elements and remain responsible for the total design, as EPCI Contractor. For example, for the Borssele Alpha and Beta platforms we introduced our own HVAC design to prevent overheating of the system which may lead to a system break down. The builders of the next platforms might have a different view on this.
How have offshore platforms developed over time?
Our first offshore platform for offshore wind, the Horns Rev Alpha, looked completely different! At that time, our client did not have any offshore experience yet and thought a simple case of ‘copy – paste’ of their onshore experience would suffice. So instead of installing a topside on a jacket foundation, like we are doing right now, we had to pile the platform on location in a frame. When we were awarded the contract for Horns Rev B and later C, it was already a different situation. And it doesn’t stop, offshore turbines are getting bigger and more powerful, wind farms are getting larger, and so will the offshore substations. Our challenge is to build platforms in a most efficient manner and at the same time in a cost-effective way. But also, how can we install the platforms as economically as possible? Perhaps the use of suction buckets instead of piling could become more of an option. The engineers will also be challenged in designing a large platform that is not too heavy.
What you also see is a new way of looking at the reachability and maintenance of platforms. Modern platforms need to be low-maintenance and in principle unmanned. Borssele Alpha and Beta will not have a helideck. A helideck might look simple. However, there’s a lot to take into consideration with regards to safety requirements, fire protection, navigation, etcetera. By means of state-of-the-art monitoring, the platform can be monitored from a land-based office. Even though we do not design own products, we do keep an eye on the market in order to be able to offer state-of-the-art platforms to our clients.
Borssele Alpha and Beta are only the first of a standardised offshore grid connection introduced by TenneT. Would it not have made sense to have one party build all platforms?
In total, there are 8 standardised platforms to be built. TenneT decided to split the purchase of the platforms in 4 phases. We won the contracts for the two first standardised platforms. Unfortunately we did not win the next two, those for Hollandse Kust Zuid 1 & 2. These contracts were awarded to Petrofac Norge BV. The platforms will be built in Dubai. The contracts for the next three platforms (Hollandse Kust Noord and West) are now being tendered. For these substations we know that we are confronted with global competition, including India and China.
TenneT is a state-owned company, therefore it has to comply to European tender policies. To be honest, this can be quite frustrating to us at times. In the Netherlands, our Government advocates an open culture and therefore also an open economic policy. This means that contracts are put out to tender internationally. Let me be clear, we do not mind competition but there should be a level playing field. Here we are, a country with an open market yet surrounded by countries that apply protectionism as their economic policy. Take for example France, this country is developing a large domestic market for offshore wind. For a company outside of France it is practically impossible to compete on this market. The UK also applies a certain level of protectionism. Here, you must meet high requirements in the area of local content. This could be up to 60% of the work. In general, the more south you go, the more difficult it becomes to get foothold on a market.
In addition, as our market is open to international businesses, we have to compete in our own market against offers from companies based in low-wage countries such as the aforementioned Dubai, India and China. It is not so much that we are competing for component costs. What makes their offering more attractive is the low labour cost. We would be happy to have the same people working here in The Netherlands for a comparable wage. With the living conditions here, they would probably even prefer to work here. However, this is not possible because in the Netherlands, all wages need to be in line with the market to protect our national workers and provide equal opportunities.
There is a paradox here. We are visited on a regular base by representatives of the Government and TenneT, praising us for the work we do here. They are proud of this piece of local economy and national strength. We do our best to participate in everything, from providing guest lectures, offering apprenticeships, etcetera. However, that same Government that is concerned about protecting our national workforce is happy to outsource a contract to low wage countries which means a lost opportunity for more jobs.
Do you think we will see a more protectionist approach being introduced by the Dutch Government in the near future?
We have been lobbying for some time now to achieve a situation where a level playing field is achieved but it is difficult. Over time, our ‘partners in crime’ Heerema Zwijndrecht and Hollandia Offshore have pulled back from the offshore wind market so we are fighting this battle almost alone now.
Do the low wages make up for the fact that there are cost involved having to transport the platform from across the world back to the Netherlands?
At first glance they do. Prices from companies in de Middle or fast East are competitive because the wage component, and we estimate this on approximately half of the total costs, is much lower. In China, the wages are almost a tenth of what we are paying. It is clear that this is very attractive indeed. However, if you look at the carbon footprint of building a platform on the other side of the world it is starting to make less sense. Besides the obvious factor, the transportation of the completed platform, there is also the transportation of a lot of equipment and parts that are produced here in the Netherlands or Europe which have to be sent to China or Dubai. In addition, numerous flights back and forward are necessary to perform the necessary inspections.
Where do you see HSM Offshore going in the next years?
We have always focused on several markets, being civil construction for HSM Steel Structures, such as the construction of bridges, the traditional offshore OiI & Gas sector as well as the offshore wind sector. The past years, wind has been one of our main focus areas and when we look at the national roadmap for 2030 we are confident that we will get our share. We mainly look at the North Sea, Irish Sea and Baltic Sea. Denmark is going to invest again in offshore wind. We also participated in a tender for two offshore platforms in Belgium recently. In this case, the Belgian Government chose to only tender out this contract to North Western European companies with fabrication facilities in the European Union, to keep better control of the process. Fortunately we see that experience is becoming more valuable while before, as a company you only needed to show that you were financially able to perform an activity. We have no ambition to look outside Europe.
For the future we expect a healthy mix again. Everyone thinks wind is booming but the energy demand for oil and gas in particular is still growing. Prices are going up again and new investments are expected to be made.
This article appeared in Wind Energy Magazine 02, 2019. Text: Sabine Lankhorst.