Cabling stands to become a key growth area in the offshore sector, but service providers and cable manufacturers need to take the plunge and invest more.

By Zara Maung

Electrical cabling forms the umbilical cord of the offshore wind farm. A failed cable cuts the power supply and the profits. There is little surprise then that developers are becoming more concerned with protecting offshore wind cables and installing them properly.

Laying good cables

Transmission Capital is a six month old company set up to bid for OFGEM’s new offshore wind transmission contracts, winners of which are to be announced in June next year. Chris Veal, managing director of the company, sees two companies leading the way in offshore wind cable installation – Aberdeen based Subocean and Netherlands based Global Marine Systems.

Both companies have proven themselves as reliable cable layers for offshore wind, using specialised equipment for burying the cables in order to protect them from fishing trawlers operating close to shore.

Reputation and experience is everything in the offshore wind cable laying business, explains Charlie Hodges at New Energy Finance. Hodges believes that the recent downfall of Oceanteam, a subsea cable layer that went into administration in May, can be partially explained by poor installation performance and the subsequent loss of offshore wind farm customers. Contracts for cable installation at Bard Offshore 1 in Germany and Gunfleet Sands in the UK have been transferred to competitors.

Hodges predicts that current operators Subocean and Global Marine are in a strong position to make the equipment investments needed to improve cable laying and burying and to stay at the forefront of the industry, especially as developers look for reliable installation companies that can make solid guarantees on their work.

However, according to John Sinclair, managing director of Subocean Group, the current service operators in offshore wind cable installation will not be able to cope with the steep targets for offshore wind. Subocean has three cabling vessels, and competing companies have a further six, bringing the total to nine, Sinclair told delegates at a British Wind Energy Association Offshore Wind conference in June. He predicted that the likely demand for the vessels in the UK is likely to reach 55 a year.

Demand for array cable installation – the cables interconnecting wind turbines – could provide an opening for smaller operators, Hodges argues, as smaller boats are needed for the thinner medium voltage array cabling, in comparison to high voltage cable laying to the mainland, which typically requires the kind of large, capital intensive cabling boats traditionally used in the telecom industry. Both processes tend to occur simultaneously but are normally tendered under separate contracts, offering the potential for more than one cable installation outfit.

Gary Bland, managing director of UK company Tekmar, pioneer of a new offshore wind cable protection and installation system, sees marine service companies from the oil and gas sectors such as Acergy and Subsea 7 entering the wind sector in full scale to meet the growing demand. Hodges, however, points to the over-qualification of these companies’ current fleets for the offshore wind industry. Whilst a cheap barge might be good enough to carry the equipment to install offshore wind array cables, complex oil and gas regulations mean the ships used by oil and gas marine services are generally too expensive to be cost competitive in the wind sector.

If however, as Sinclair predicts, a cable installation bottleneck occurs and prices rise steeply, oil and gas service companies could have a renewed interest in entering the offshore wind industry.

Cable bottlenecks

According to New Energy Finance research, offshore cable manufacturing bottlenecks could form soon after 2015, as demand escalates from both Round 3 wind farms and the oil and gas industry (looking to replace expensive diesel generators with grid or offshore wind electrical supply). Cable manufacturers need a firm commitment of demand three years ahead of delivery to make the Euro 50-100m capital investment to build a new plant, according to the NEF report.

Tekmar claims that cable manufacturers are taking an interest in the company’s new cable protection and installation product as there is a pressing need to both improve offshore wind cable durability and reduce the costs of installation, which currently runs into tens of millions of Euros per wind farm. The company claims its new highly durable cabling system, which is already being installed in Germany’s Bard 1 wind farm, will do away with the need for J tubes to feed the cables out of wind turbines and in turn reduce the installation time of array cabling by two thirds.

Ultimately, technical improvements must offer functionality at lower cost. New cost cutting technologies like Tekmar’s need to be tested and deployed throughout the industry if the cost of offshore wind is to be brought down over the long term, Hodges maintains. Developer margins have been squeezed by rising project costs and methods that offer the potential for cost savings through shorter installation contracts will play a supporting role in stabilising offshore capex.