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INDUSTRYINSIGHT more news at www.heavyliftpfi.com


Cabotage rules threaten to becalm burgeoning offshore wind industries


Offshore wind energy projects in the USA and Taiwan could prove to be welcome sources of activity for project logisticians. Regulatory burdens in both nations, however, are tempering investor confidence, reports David Kershaw.


T


he USA’s offshore wind energy sector is on the cusp of a huge upturn, but


one longstanding barrier to its development has been the lack of available US-flagged jack-up installation vessels. Avangrid and Copenhagen


Infrastructure Partners are developing what will be the country’s largest offshore wind farm – an 800 MW development off the coast of Martha’s Vineyard, Massachusetts. Meanwhile, Rhode Island gave the green light to develop the 400 MW Deepwater Wind project. Offshore installation vessel


capacity, however, is tight. These vessels will likely be sourced from the European market, but will be unable to enter US ports to collect cargoes and then install them in US waters due to Jones Act restrictions. However, supply chain


planning is already taking place. Tenders for offshore leasing zones are being conducted (Massachusetts), joint ventures established (EDF and Shell for New Jersey leasing zones), and industry EPCs and project owners offices opened (MHI Vestas in Boston). The Global Wind Energy Council (GWEC) expects projects to commence construction between 2020 and 2025. News broke during April that


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the Trump administration is said to be considering a ten-year waiver to the Jones Act for foreign-flagged vessels delivering natural gas to Puerto Rico. Following this announcement,


various offshore wind energy stakeholders were quick to suggest that the waiver could be extended to cover vessels servicing wind projects off the East Coast.


Concessions unlikely Nevertheless, industry observers believe it is unlikely that there will be any leeway for the companies hoping to capitalise on the USA’s burgeoning offshore wind industry. It remains to be seen


whether alternative solutions will be developed to overcome the Jones Act restrictions, or whether US shipyards will see orders for installation or specialist vessels roll in. Taiwan, too, has made great


strides in developing its offshore wind energy sector in recent years. It plans to build 5.5 GW of offshore capacity by 2025. In early April, a consortium of


Japanese investors led by Sojitz took a 27 percent stake in the 640 MW Yunlin offshore wind farm off Taiwan, under development by WPD. EnBW has been developing


three offshore wind power projects in Taiwan’s Changhua region since early 2018. During March, Northland


Power signed a power purchase agreement (PPA) with state utility Taipower for the 300 MW Hai Long 2a wind farm off Taiwan. Copenhagen Infrastructure


Partners, meanwhile, signed a 20-year PPA with Taipower for the 300 MW Chongneng, 542MW Changfang and 48 MW Xidao wind farms. MHI Vestas is the preferred turbine supplier for the projects. The country is, however,


Taiwan is considering proposals similar in nature to the Jones Act that would make the use of Republic of China-flagged ships mandatory in offshore wind energy construction projects.


considering proposals similar in nature to the Jones Act that would make the use of Republic of China-flagged ships mandatory in offshore wind energy construction projects.


Local content Local content requirements are of utmost importance for Taiwan, although at present it does not have the required installation vessel capacity. If it pushes through with a ban it could slow down project development, drive up costs and raise a host of health and safety concerns. DEME Group, which formed a


joint venture with Taiwan’s CSBC during 2018 to capitalise on this emerging sector, declined to comment on potential changes to the cabotage regulations. In addition to the Taiwan-flag


proposals, investor confidence was also hit during February when the government introduced both a 6 percent tariff reduction and a cap on annual full-load hours. GWEC said these measures disincentivise the most efficient and optimised technology and wind farm design. HLPFI


May/June 2019 99


Orsted


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