Renewables is a sector on the rise and the demand for specialized logistics providers is booming.
Large-scale renewable energy is on the move. Last October, the country of Georgia marked the completion of its first ever wind farm, with ambitious plans for several more facilities to come. In South Africa, work is underway on a massive solar power project in the Northern Cape Province due for completion in the second half of 2018. And, in Indonesia, agreements were signed in March for an initial tidal power project in Lombok.
Meanwhile, wind blades get longer, turbines get heavier and locations get ever more challenging.
Renewable power supplies are increasing in prevalence, scope and reach. This, of course, has profound implications for global energy and climate change. The Global Wind Energy Council, for example, predicts installed wind energy will almost double to 800GW by the end of 2021, from 287GW installed by the end of last year.
This also has a notable impact on transport and logistics. Renewable energy, especially wind power, is an increasingly important component of project cargo. Renewable energy has become vital business for a number of logistics providers, who specialize in heavy-lift project cargo. It is seen as an opportunity for others who view renewables as a prime growth area. Ports are vying for renewable energy-related business, as are vessels, railroads and trucking firms.
“It’s a very, very competitive vertical,” said Brent Patterson, Houston-based senior vice president, global projects, at Blue Water Shipping, one of the world’s biggest and most experienced offshore wind transport and logistics providers.
This development comes as breakbulk in general continues to struggle for business. What’s more, offshore oil and gas exploration and production suffers through an extended slump, taking with it the offshore services industry and related project cargo. That certainly has added to the appeal of renewables, especially offshore wind. In its latest quarterly earnings call, for example, Gulf Island Fabrication cited renewable energy as a necessary counterpoint to the decline in its traditional oil and gas-related structures manufacturing and maintenance.
“In light of the downturn in oil and gas, there’s been a forced diversification in the offshore services industry,” said Patterson.
Logistics providers such as Blue Water piggyback on that conventional energy background as well. “We’ve been able to use our oil and gas expertise a lot,” said Patterson.
Because of these dynamics, it’s almost expected that major project cargo logistics providers have the capabilities to undertake wind and other renewables. Yet, there are elements within this particular undertaking that are unique.
First, the size: A wind blade now can stretch over 200 feet. A turbine can weigh more than 100 tons. Getting them loaded and unloaded on vessels is difficult enough. Transporting them to their final destination can be devilishly hard.
Also, it isn’t just the sheer size and weight of a wind blade or turbine, but the number. Even a small wind farm, with 20 towers, can mean more than 100 separate monstrous pieces of machinery.
Laying the groundwork is absolutely critical. Providing logistics for a wind farm can take as long as a year’s worth of planning before the first piece of equipment is moved. Sometimes, it becomes necessary to tinker with infrastructure to enable the moves. The entire transport process can take another six to 10 months. It’s a carefully crafted assembly line, with project vessels in one part of the world being loaded, at the same time heavy haul trucks are being unloaded on the other. In between, storage yards are being staged.
Detailed engineering and feasibility studies must take into account everything from quay size and strength to road alternatives.
Just the sourcing of equipment is a global affair. On May 1, Block Island Power Co. finally went live on its Deepwater Wind project, off the Rhode Island Coast, America’s first-ever offshore project, and one that is decades in the making. The blades came from Denmark, the tower components from Spain and the turbines from France.
If anything, all that planning has become more difficult over time. Components have grown in size. Blades, which were 37 to 44 meters a few years back, are now 55 to 65 meters. The turbines and towers are bigger and heavier as well.
All that translates into bigger crane sizes and greater space needed at the port and increased storage requirements, explained Steven Gibbs, vice president, global sales, North America for DSV Air & Sea Holdings, part of the Copenhagen-based DSV logistics and transport group. And, he continued, with bigger and heavier, trucking routes become “more restricted, more limited.”
Gibbs cited DSV’s onshore wind projects in the Great Lakes region, where the logistics provider must sometimes opt for more remote ports to avoid high-density areas or roads where it’s simply impossible for a truck to make a turn with the blade. But these remote ports may not have the necessary cranes. Equipment mobilization becomes necessary.
“It all goes back to planning,” he said.
Several US ports - especially old industrial ports - have bolstered facilities in an attempt to attract this heavy lift business. The Port of Corpus Christi, for example, calls itself “America’s wind power port.” It boasts the strongest open wharf on the Gulf of Mexico, a spacious area that can accommodate ever-bigger wind power-related components. (Texas produces more wind power than any other US state.) They are not alone as ports like Davisville (staging area for Deepwater Wind) has invested $90 million in upgrading Pier 2. Another niche port, the Port of Albany up the Hudson River has also been upgrading to handle the future wind projects and offshore wind is high on the menu of items being worked on in the ports of Connecticut.
The global marketplace in renewables is changing. The US, for example, has become a mature market in onshore wind, while offshore wind is just in its infancy.
Future in Question
The future of renewables in the US is also questionable, with the Trump administration’s assault against environmental mandates and populist rhetoric that talks up conventional energy such as coal and talks down renewables. (see One Source page 8)
Developing economies are widely viewed as the markets of the future. However, they provide even more challenging transport and logistical issues. Few ports, for example, have the dock facilities necessary to unload the equipment. Roads can be inadequate, or, sometimes nonexistent. Delays at the ports, coupled with inadequate storage facilities can put multi-million-dollar pieces of equipment at risk. Customs officials may hold up these goods. Regulatory issues can befuddle timely carriage as well.
“It’s very different market to market,” said Peter Ehrhorn, Blue Water’s head of port services, chartering and logistics, based in the company’s headquarters in Denmark. He cited Europe, which has developed specialized equipment to better transport and handle offshore wind turbines, blades and towers, while elsewhere “that specialized equipment is not yet in the market.”
Yet the appeal of emerging markets is undeniable. “There is a huge opportunity to explore,” said Herve Mercier Ziza, a former oil and gas engineer based in Houston who one year ago formed Nila Logistics to focus on the West African renewables market, both solar and, eventually, wind.
In these developing markets, the role of project cargo logistics providers can be tougher, but it’s more critical for successful completion as well. “We’re managing the project for them,” said Gibbs, who cited DSV’s work in Latin America, including recent projects in Uruguay. “We really become a 3PL and a 4PL.”