Despite long-lead times and high capital investment requirements for vessel construction, US developers are confident thet 16 US installation vessels will be in the water in time for a 2014 build-out of offshore wind.

John R. Johnson, US correspondent

US offshore wind farm developers will have to do some serious legwork if they are to comply with the US Jones Maritime Act. However, they remain confident that there will be enough vessels to support wind farm growth by the time it begins in earnest in US waters - likely in 2013 or 2014.

The Jones Maritime Act, in place since 1920, stipulates that ships traveling to and from US ports must be US flagged, owned and operated. Once a wind farm foundation is in place in the ocean, the structure is considered a port. Therefore, US vessels must service it.

Currently the only existing specialist vessels capable of offshore foundation and turbine installation are mostly European-owned, and carry very high commissioning costs.

US ready to invest

However, US offshore developers and consultants predict that the Jones Act requirement will be a non-issue by the time the US offshore wind industry heats up.

They expect some offshore companies to construct their own ships, a strategy being considered by NRG Bluewater Wind, which has plans to build three custom vessels.

Other offshore wind developers will likely retrofit vessels that are sitting idle in the Gulf of Mexico because of slowed oil production.

Although building the specialized vessels can cost upwards of US$100 million, ship owners will likely benefit from the global opportunities in the booming offshore wind sector.

“What is interesting is there is no Jones Act equivalent in Europe, so if we build a ship, that same vessel can go to Europe and install turbines there,” says Peter Mandelstam, NRG Bluewater Wind’s founder and group president. “There is an enormous industry exploding in Europe.”

Easier to build than obtain a waiver

The American Wind Energy Association has identified the need for 16 vessels once US wind farm construction gets underway in earnest.

There are currently 12 vessels in Europe. However, high demand for vessels in Europe has placed an upward pressure on vessel charter costs, rendering these vessels cost-prohibitive for US projects developers.

Joel Constantino, Vice President and Director of Operations for the New England Steam Ship Agents, Inc., says that it is possible to obtain a waiver to work around the Jones Act. But he says the process is complicated and costly, with no guarantee of securing a waiver.

“The criteria to receive a waiver is pretty drastic,” says Constantino. “If you attempt to charter a US flagged vessel to comply with the Jones Act to go from one US port to another, and there are none available, you could apply for a waiver based on the unavailability of these crews. But you need to exhaust that research and show where you tried to charter vessels during that period of time. The process is very involved, and there is no guarantee that you will receive the waiver.”

In addition, Constantino says that applying for a waiver might convey an image that the developer is trying to work around the law, which might put it out of favor in future negotiations.

At present, the US clearly faces a “chicken and egg” dilemma when it comes to investing in new vessels. Do shipbuilders and investors build the expensive vessels now, before any wind farm sites achieve final permitting, or wait until permitting is received and then begin the building process?

“Vessels are in great demand in Europe, which has pushed their charter fees through the roof,” says Jim Lanard, Managing Director for Deepwater Wind, LLC, Hoboken, N.J., which hopes to install the first offshore wind farm in the US, a 100-turbine site off the coast of Rhode Island.

“The industry is going to have to [create] access to US vessels. A lot of the US offshore wind developers are working very hard to find US-based vessels out of the Gulf of Mexico that can be retro-fitted to serve the industry.”

Lanard says that another reason the industry will eventually turn to US based vessels is because of operations and emergency maintenance requests.

“We’re going to need a vessel available to make emergency maintenance calls on turbines and we can’t rely on a heavy lift vessel from Europe to do that,” he says.

He says that in this respect, building US vessels resolves compliance issues as well as O&M issues.

"The bottom line is that we’re going to comply with the Jones Act and we’ll use US-flagged vessels and US workers to install and operate these wind farms,” says Lanard.

While the issue of vessel availability lies some years ahead, the most pressing issue facing developers right now it the permitting process, which is proceeding at a glacial pace. In the current environment, it can take seven to nine years to get through the permitting stage.

The US government has acknowledged that the process needs to be cut to two to three years, while still performing required due diligence.

“We’ll be in compliance with the Jones Act,” says Mandelstam. “The choke point right now is clearly the permitting process.”

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