Offshore Wind Power Logistics - Like a journey to the moon
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Transcript of Offshore Wind Power Logistics - Like a journey to the moon
Background information
Like a Journey to the Moon
Authors: Frank Reichert, Robert Kunze, Saman Kitvarametha
The much-cited “energy transition” is on everyone‘s
lips, and has been even before the Fukushima nuclear
disaster. Inner-European greenhouse gas emissions
are to be reduced by at least 20%, energy efficiency
improved by 20% by way of energy savings, and
the share of renewable energy in the total energy
consumption raised to 20%. The German government
even aims to raise the share of renewable energy in
power generation to 25-30% by 2020. High hopes are
being placed on offshore wind energy in particular.
The German government‘s resolution in the “National
Renewable Energy Action Plan” envisages 10 GW of
installed output in offshore wind farms by 2020. By 2030,
it is even planned for offshore wind farms with a total
output of 20-25 GW to be set up in the North Sea and
the Baltic Sea. These farms alone could cover approx.
15% of the electricity requirements in Germany, which
equals an annual electricity yield of 85–100 TWh.2
German Offshore Wind Power Projects (in MW)
Source: dena, Barkawi Research 2011
North Sea
Operational 51470
17,620
24,616
Approved 2,318
Awaiting approval
2,295
Baltic Sea
An ambitious goal, considering that a mere 470 MW of
installed output are in operation by now. But in order
to reach the objective set by the German government,
based on the current state of affairs, approximately 3
MW of offshore power would have to be installed every
day between 2012 and 2020 – a requirement that is
currently by all means utopian, as it currently takes
an average of 6 days to install 1 MW of output. The
government‘s objective thus seems to slip out of reach.
1 Interview with representatives of RWE Innogy GmbH; July 21, 20112 German Federal Ministry for Environment, Nature Conservation and Nuclear
Safety, 2011
Apart from that, however, the odds are favorable, as
the North Sea and the Baltic Sea are regarded as being
among the most promising offshore wind areas in the
world, and the initial tariffs for the first twelve years
have recently been raised from 13 to 15 euro cents per
kilowatt hour.
More and More Players in the Offshore Logistics MarketNot only constructors and operators of offshore wind
farms would benefit from growth, but also maritime
economy, navigation, ports and shipyards. But growth
in Germany is stalling. The German special way of
doing things is regarded as one of the reasons. While
the construction of wind turbines on the open sea is
definitely planned, they should not be located within
eyesight of the shore. As the turbines move further
away from the land (approx. 30-100 km) and the
waters grow deeper (20-40 m), the total costs increase.
Bureaucratic obstacles with diversified responsibilities
in municipalities, counties, and environmental agencies
lead to especially tedious approval processes. Another
reason development is impeded is the slow expansion
of the German electricity grids.
100 billion euros: this is the total sum that is estimated
to be invested in the offshore wind market by the year
2030. The sum includes investments in wind farms and
their grid connection, areas of maritime installation and
service, and port infrastructure. Logistics services in
particular play an important role during the life-cycle of
an offshore wind turbine, because apart from turbine
purchase costs, grid connection and the foundation,
logistics contributes one of the largest shares of the
necessary investment in an offshore wind turbine.
Considering the presently active wind farms, those
already approved and those currently under review for
approval, there is enormous offshore logistics potential
which consists of logistics services until startup and
logistics services pertaining to support and maintenance.
Depending on the respective logistics concept, the
strongly fluctuating logistics costs comprise between
Like a Journey to the Moon
Half-baked logistics concepts and communication „by acclamation“: offshore wind logistics might turn out to be an unpredictable blind flight. RWE Innogy GmbH, a German company specializing in renewable energy, even states, “Compared to onshore logistics, offshore logistics is like a journey to the moon.”1
Source: Barkawi Management Consultants
Development of Costs over the Course of the Individual Logistics Phases in the Onshore and the Offshore Sector
SupplyPlanning AssemblyProduction Transshipment Installation Service
Procurement logistics
onshore onshore
onshore/offshore
onshore/offshoreoffshore
onshore onshore onshore/offshore
onshore
onshore
Production logistics Installation logistics Service logistics
24-36 months 12 months 12 months 18 months 240 months
Average duration of process steps when constructing a medium-sized offshore wind park
Cost development offshore logistics Cost development onshore logistics
5% and 15% of the CAPEX of an offshore wind turbine.
This gives rise to different scenarios for the total logistics
potential: Barkawi estimates the logistics turnover
potential at 12 to 31 billion euros.
In this calculation, erection logistics represents the major
part of the total potential, with the biggest cost drivers
being the charter costs for installation vessels. It remains
to be noted, however, that the specific characteristics of
any offshore wind turbine (water depth, distance to the
shore, service concept: shore-based; vessel-supported,
shore-based helicopter-supported; sea-based, etc.)
significantly affect logistics costs. Just under 90% of
that potential can be attributed to projects in the German
North Sea3. In addition to project planners, wind turbine
constructors such as Enercon, Siemens or Vestas, and
energy suppliers such as RWE or ENBW, numerous
large and small logistics service providers are trying to
jump on the band wagon and use part of that potential
for themselves.4
Logistics on the Open Sea is ComplexAlongside grid connection, funding and
technology, logistics is the fourth key
challenge in the offshore wind energy
sector. At first glance, the logistics
process in the offshore sector is strikingly
similar to that in the onshore sector. In
both cases, the process can be broken
down into four main areas: procurement,
production, installation, and service
logistics.
3 Barkawi Management Consultants4 Windenergie soll Seehäfen pushen [Wind Energy to Push Seaports] –
WirtschaftsWoche, http://www.wiwo.de/unternehmen-maerkte/windenergie-soll-seehaefen-pushen-466792/, Christian Schlesiger, May 27, 2011
The “installation logistics” step, during which materials
and staff are transported from the ports, is the biggest
cost driver in the entire logistics process. The share of
maritime logistics accounts for approximately half of
the significantly higher costs as opposed to the onshore
sector. The domineering force here is a sellers‘ market:
specialized vessels are scarce; moreover, the required
capacity clashes with the undwindling demand from
the oil and gas industry. Wind farm operators thus
currently pay at least 150,000 euros a
day for an installation vessel, plus labor
costs for approx. 60 workers. That is ten
times as much as is incurred per day for
installation units in the onshore business.
But it could be even more expensive:
when the offshore wind farm “Alpha
Ventus” was constructed, the leasing
of the Dutch heavy cargo ship “Thialf”
incurred costs in the amount of a stunning
500,000 euros a day.5 At the moment
there is no acute shortage of erection
units as yet, but experts are convinced
that in 2-3 years‘ time, if the development
continues at the present rate, a veritable “bottleneck”
will occur, as the construction of such facilities is
expected to take two years. Simply settling the high
leasing payments, however, does not help overcome
the maritime technology challenges. The planned
German wind farms in particular, which are supposed
to be erected in deeper waters and further away from
the shore, pose yet another challenge to installation
logistics. Heavier seas and stronger winds show where
the limits of current maritime installation technology lie,
5 Windenergie soll Seehäfen pushen [Wind Energy to Push Seaports] – WirtschaftsWoche, http://www.wiwo.de/unternehmen-maerkte/windenergie-soll-seehaefen-pushen-466792/, Christian Schlesiger, May 27, 2011
Source: dena, Barkawi Research 2011
Potential Sales Volume for Logistics of German Offshore Projects (in Mio. €)
Low scenario High scenario
Erection
After Sales6,847
Awaiting approval
5,074
Approved
19
Opera-tional
18,601
Awaiting approval
Approved
13,782
Opera-tional
19
often forcing operators and installers to improvise time-
and cost-intensive actions. An additional expenditure is
the coordination of the employment of various floating
cranes, some of which have to be brought in and
mobilized from different locations. What exacerbates
the current situation even more is weather conditions
that are worse than was forecast, which lead to even
more unexpected costs and increased shortcomings
in maritime technology. Because while the foundation
can also be installed at medium swell and fairly strong
winds, the nacelle and the rotor blades can only be set up
when the wind has died down – at a place, of all things,
where wind is supposed to be the source of energy
once the turbine is in operation. Moreover, installation
logistics is complicated by a lack of expertise, reflecting
insufficiently sophisticated standardization.
Delays in the Logistics Chain Reduce Turnover and Increase CostsProduction, installation and service logistics all face a
problem relating to surface and capacity. While Dutch
ports – due to their extensive experience in cooperating
with the oil and gas industry for decades and due to the
construction of the first offshore wind farms such as Alpha
Ventus – have sufficient expertise and handling space
for large components, German ports are not prepared
for the offshore boom. Apart from large interim storage
areas for the enormous turbine components, heavy-duty
access roads and harbor edges would have to be built
to facilitate delivery to and loading of the ships. A 250-
MW offshore wind farm made up of fifty 5-MW turbines
would thus have the following dimensions per turbine:
weight (1,500-2,000 tons), rotor diameter (approx. 110
m) and tower height (approx. 90 m). These values mean
that a total volume of around 100,000 tons needs to be
transported. Handling and storage areas close to the
shore are especially important with regard to supplying
the wind farm with spare parts and staff at a later stage.
The costs and delays which might otherwise incur from
longer transport distances that are not systematically
planned not only reduce the commercial availability of
the farm, i.e. the turnover, but simultaneously increase
the costs.
Logistics is the Key to Increased Profitability of Offshore Wind ProjectsAt the moment, offshore wind turbines are three to four
times as expensive as a comparable coal power station.
It is therefore paramount to get to grips with the costs
incurred and to drastically reduce their current levels.
Based on the data of current German offshore wind
projects, a project income return of 7.1% after tax would
apply to an equity-financed model wind farm, taking
the German Renewable Energy Act into consideration.
In light of the technological and logistical challenges
and the even more meager experience in erecting
and operating an offshore wind farm, this income
return does not seem sufficient to cover the specific,
higher risks of offshore wind projects.6 The projects
therefore need to become more profitable. Since the
turnover share of the profitability equation can only to
a certain degree be influenced by higher commercial
availability and larger facilities, the focus lies on the
costs. Costs (CAPEX) per MW of offshore turbines have
hitherto amounted to between three and four million
euros, depending on the project. That value must be
lowered by 25% in order to create long-term investment
security. Otherwise, the profitability of offshore projects
threatens to become so unattractive that it will no
longer be possible to raise any outside capital. After
all, even today the calculated income return of German
offshore wind turbines is distinctly lagging behind other
countries. The logistics service provider DB Schenker
came to the same conclusion: a cost reduction potential
of 20–40% is currently assumed in the areas production,
supply, assembly and transshipment, realized by means
of integrated planning, controlling and supervising of
holistic logistics systems.7
But how can we achieve savings of up to one million
euros per installed MW? What do experts in this field
consider to be the essential factors for successfully
improving efficiency in the entire logistics process?
6 Offshore wind farms in Europe, market study 2010, KPMG7 Interview with Sebastian Peiler, DB Schenker, July 25, 2011
Good Project Planning is the Key to Success Good project planning is of the essence when erecting
offshore wind farms, as the effects of poor planning are
much more palpable than in onshore projects. Small
delays can quickly lead to exceeding both schedule and
budget. Most delays result from insufficient information
and decision-making processes, as well as when the
individual sequential steps in the logistics process are
inadequately dovetailed. To avoid delays it is necessary
to involve all parties concerned more intensely and at
an earlier stage for the duration of the entire logistics
process. Logistics experts in particular are very keen
on being involved in the entire project planning
phase as early as possible, so that they can plan for
the long term and be prepared to react adequately to
any unforeseen events. Hence, all parties concerned
should be involved as early as in the first process
step of internal planning: the viability review phase.
This way, the effects of delays on costs and thus the
profitability of the project can be determined at an early
stage. Efficient voting, coordination and communication
processes must be established and adopted in order
to guarantee a successful outcome. This helps to
make sure that the internal project processes meet the
requirements of each and every player. After all, the
planning of an offshore wind farm requires the same
degree of integrated planning (sequential, parallel, and
continuous) as a large-scale project to avoid delays at
the points of intersection to the greatest possible extent.
If the coordination requirements are to be met, project
controlling must be carried out from a single source.
The factors for successful project planning are therefore
based on those of classic large-scale project planning:
foresight, agreement, coordination, and communication.
Success of German Offshore Ports by Means of Specialization and Cooperation The expansion of the North Sea and Baltic Sea ports has
already begun. There is a clear trend towards an „all-
round harbor“: a port which not only accommodates
interim storage and the loading of large components,
but also offers enough space for production venues and
the storage of all the necessary erection units. Siemens,
for instance, is planning a comprehensive, integrated
production and logistics venue in Ireland. Experts,
however, believe this trend is heading in the wrong
direction. From an economic point of view, they are all
in favor of a specialization of the ports which could be
suitable for the offshore wind market.
Bremerhaven Production of foundations, nacelles, rotors and towers, shipment
Brunsbüttel Potential location for shipment, assembly and production of large components
Cuxhaven Production of foundations and towers, shipment
Emden Production of nacelles and rotors, assembly and shipment
Husum Potential support base for maintenance and construction teams
Rendsburg- Osterrönfeld
Potential location for shipment, assembly and production of large components
Büsum Potential support base for maintenance and construction teams
Lubmin Potential location for production, shipment and maintenance, grid connection point for the Baltic Sea
Rostock Production of nacelles, rotors and towers as well as shipment(onshore), potential location for production (offshore), shipment, maintenance
Sassnitz Potential location for production, shipment and maintenance
Stade Production of rotors
Wilhelmshaven Production, platform, construction fleet location, shipment
Dagebüll Möglicher Stützpunkt für Wartungs- und Bauteams
Helgoland Potential support base for maintenance and construction teams
Source: Barkawi; dena Deutsche Energie-Agentur
Overview of Offshore Port Trends, Needs and Technologies
Expanding ports into all-round harbors would entail
not only uncovered investments but also further
delays of the infrastructure setup: time we do not have,
considering the objectives and the competition with
British and Dutch ports. In addition, competition for the
most promising port areas and facilities would cause
yet a further increase in costs. Moreover, experts see
a danger in setting up excess capacities for the long
term, both in storage and handling areas and space
allotted to installation units. Although expanding port
logistics is immensely important for the growth of the
offshore wind market, doing things simply for the sake
of doing them in all ports, and in an uncoordinated
fashion, would eventually lead to excess capacities.
Therefore experts in the field do not focus on competition
between the ports but rather on cooperation as a
factor for success. The aim of cooperating is to link
the locations and use the focal points of “production,
logistics and service ports for offshore wind parks”8 in
order to provide potential customers with a closely knit,
specialized network of ports. The “Offshore Windpark
Logistik” cooperation [Offshore Wind Farm Logistics],
which consists of ports along the North Sea shore of
Schleswig-Holstein in Germany, is an example of how
tasks can be distributed successfully. The German
ports at Brunsbüttel and Rendsburg-Osterrönfeld act
8 dena Deutsche Energie-Agentur
as harbors for assembling and manufacturing large
components, whereas the ports of Büsum, Dagebüll,
Husum and Brunsbüttel serve as reaction service
ports. The logistics chain is completed by the ports of
Heligoland, Hörnum, List, and Wyk Auf Föhr, which are
responsible for supplies.9 This promising cooperation is
a good example of an efficient port capacity structure
along German shores. The individual ports carry out all
coordination at an early stage, thus avoiding resource-
consuming competition in the medium term and
eliminating the danger of setting up excess capacities
in the long term.
Irrespective of their specialization, German offshore
ports are not only facing challenges pertaining to loading,
but also new challenges in the fields of security and IT.
After all, the targeted objective of 25 GW of installed
output means that an additional 22.510 million tons of
goods will be handled by 2030 and must be included
in and reflected by appropriate logistics, guidance and
simulation systems.
9 Gesamtverband Schleswig-Holsteinischer Häfen e.V. (General Association of Schleswig-Holstein Ports)
10 Barkawi Management Consultants (estimate)
Source: Maritime Technologien Schleswig-Holstein, MC Marketing Consulting, and dsn Projekte und Studien für Wirtschaft und Gesellschaft (Kiel) [dsn Projects and Studies for Economy and Society, Kiel, Germany]
Trends
New IT requirements due to an increase in the flow of goods and transshipment volumes
A growing logistics market, growing network of German seaports, rising requirements regarding port hinterland connections
Global rise in security requirements, increasing requirements regarding maritime security
Increase in seaport optimization and flexibility
Increase in the number of environmental standards and requirements in the port area
Needs (for development)
• Port IT and logistics systems• Simulation systems• Process-oriented control systems• Terminal communication systems
• Slot management• Logistics platforms• Computer-controlled data sharing• Feeder systems• RoRo/ConRo terminals
• Security management• International security services
• Commercial vehicle loading facilities• Cross docking center integrated into
terminal• Planning systems for transshipment
equipment and carriers
• Hazardous goods management• Sustainability strategy for Baltic Sea
ports• Energy management consulting and
services
Technologies
• Port information and communication technology
• Transport and logistics systems
• Security technology
• Port and transshipment technology
• Environmental technology
The Availability of Adequate Equipment must be EnsuredTwo approaches for overcoming erection unit shortages
have proven to be successful, yet they could not be more
different: while RWE purchased two installation ships
of its own11 in order to defy the shortages prevailing in
the competition, Vattenfall continues to pursue a pure
project controlling-based approach, meaning it relies
on commissioning logistics service providers.
RWE‘s installation ships are primarily used for the
erection of the offshore wind park “Nordsee Ost” [North
Sea East]. From RWE‘s point of view, deploying a large
fleet of ships in order to attain better flexibility and avoid
shortages is currently the key factor for success, and
also the right strategy to pursue in the years to come.
However, not all of the companies that are active in
the offshore wind power industry possess the funding
required for such an approach. The costs for a hotel ship
with a four-year delivery period, for example, amount to
120 million euros, while installation ships such as those
recently commissioned by RWE still cost approximately
100 million each. Nonetheless, ensuring the availability
of the equipment required is one of the key imperatives
for successfully implementing offshore projects.
Whether or not it pays off to purchase one‘s own
equipment strongly depends on the strategy chosen
by the respective company. A strategic approach
involving the purchase of its own equipment will give
the company in question a good return if they intend
to realize massive growth plans, as such investment
decisions can be expected to give rise to enormous
economies of scale, meaning they could provide a
high degree of equipment utilization and thus present
a good opportunity for achieving an adequate return
on investment (ROI). Moreover, the owners of the few
existing installation ships can rely on the so-called
„multi-vendor principle“ and rent out their equipment to
third parties whenever they do not need these capacities
themselves. This increases the degree of utilization
and thereby enhances the return on their investment.
Furthermore, this strategy provides companies with a
rare and highly valuable opportunity in the offshore
business: it allows them to gain experience which they
can benefit from in their future projects.
Some of the other UCs12 however, have positioned
themselves as pure project controlling firms and
11 RWE corporate website12 UC = utility company
commission third-party providers for implementation.
Their intention is to create a competitive environment in
order to bring down the costs. Yet in the long run, they
would not rule out that they might purchase their own
equipment, too. However, they would only employ such
an approach if the number of their projects was sufficient
to ensure a high degree of equipment utilization. At first,
this rather cautious and risk-minimizing strategy seems
to argue for reluctant investments in new offshore
projects or seems to be based on the assumption that
current shortages will wear off.
No matter which strategy will turn out to be the preferred
choice of major wind park operators, the impact on
the peripheral industries affected will definitely be
substantial. If the vertical model applied by RWE takes
hold, plant manufacturers will have to face losses for
services provided beyond the warranty periods and
various niche providers currently benefitting from
equipment and staff shortages will be subject to
enormous pressure. However, such comprehensive
structural changes take several years.
Independent of the chosen approach, the demand for
special-purpose vessels and complex constructions will
rise, thus entailing a huge potential for German shipping
companies. Provided that the political and financial
development turns out to be favorable, forecasts project
a market potential from „classic“ shipyard activities
(vessel construction, reconstruction, maintenance)
amounting to up to 6.5 billion euros until 2020. Beyond
these classic activities, a further potential sales volume
from offshore structures (jackets and platforms) of up to
11.5 billion euros can be derived. Simply by exploiting
these potentials, 6,000 jobs on German shipyards could
be secured13 – a potential that especially the economically
battered Baltic Sea regions could benefit from.
Realizing Significant Savings Potentials by Means of StandardizationThe logistics related to the installation of offshore wind
power plants is not only to be regarded as one of the major
cost drivers, but also falls into the project phase presenting
the most substantial challenges. The standardization of
both plant components and organizational processes
during the installation – which is almost non-existent
at present – would significantly contribute to saving
time and costs. The degree of standardization in the
construction of foundations, for example, is virtually
13 KPMG; German Shipbuilding and Ocean Industries Association; Federal Ministry of Economics and Technology; German Shipowners‘ Association; Offshore Wind Power Foundation
zero. Currently, each and every „jacket foundation“ is
a unique piece and hugely expensive. Standardized
foundations are expected to remedy that situation, as
they are supposed to reduce the scale of pre-foundation
planning and the amount of installation work required,
thus presenting a considerable cost reduction. The
gravity foundation developed by the ZÜBLIN company
is a prime example for such standardization. This type
of foundation weighs up to 5,500 tons and sets the stage
for a reduction of installation costs: it allows for series
production.14 A high degree of pre-assembly as well as
production close to the quay are expected to further
reduce the challenges posed to logistics. Standardized
foundations also contribute to a reduction of installation
technology investments, since it is no longer necessary
to have different erection units matching the respective
foundation types available. Standardizing foundations
as well as all related services thus constitutes a major
factor for reducing offshore installations costs, seeing
as these costs make up 25-30% of the total investment
costs for each offshore wind power plant.
Only Few Examples of Best Practice Available So FarModern, coordinated logistics concepts and models in
the offshore wind market allow for cost reductions and
thus influence the profitability of a planned offshore
wind park. Although the automotive industry and the
wind power industry do not seem to have much in
common at first sight, the automotive industry‘s cutting-
edge logistics methods can serve as a role model for
most companies in the wind power industry (and for
all other industries as well). Just in time (JIT), Merge in
transit (MIT) or Just in sequence (JIS), to name just a
few, are logistics concepts that can also be applied in
other industries, as they allow for successful logistics
at low cost. In the case of the offshore wind industry,
for example, weak links in the supply chain can be
eliminated by employing the JIT concept, and a stronger
involvement of suppliers in the overall process can
help to reduce both stocks and costs. Implementing
the JIT concept would make it possible to synchronize
procurement and production, as well as to provide
information and coordination across the entire value-
added chain and among all parties involved.
As opposed to the situation in the wind power industry,
the good handling properties of automotive components
facilitate transport across longer distances. Hence best
practices from industries such as the heavy duty and
14 Dr.-Ing. Udo Hartwig, Dipl.-Ing. Klaus Pöllath, ZÜBLIN AG
plant industry or the aerospace industry are the examples
to turn to with regard to this aspect. The requirements
and challenges for logistics in these two industries
due to the sheer dimensions of the components, the
distribution networks required and the safety and security
regulations are substantial. The experience gained in the
field of aerospace logistics is highly valuable here, such
as the insight that transporting heavy loads on inland
waterways instead of ground shipping has several major
advantages. Load limits, for instance, are not as crucial
in waterway transportation. The administrative effort
is considerably lower and fewer permits need to be
obtained: planning and approving as well as carrying
out heavy-load transports on inland waterways is faster
and more cost-efficient.
With regard to the maritime technology required to
install offshore plants and the experience with and
handling of changing weather and tidal conditions at
sea, the only other industry the offshore wind industry
can possibly be compared to is the oil and gas industry.
Both the experience and the offshore technology
from the oil and gas industry were drawn on for the
construction of the offshore wind park „Alpha Ventus“,
for example. Nonetheless, Erik Pietsch, Project Manager
for Logistics Planning at Vattenfall, points out that while
there is solid experience in certain areas of the oil and
gas industry that can serve as inspiration, there are also
some fundamental differences compared to offshore
wind parks. So far, the erection of single structures
was often the main focus of activity, whereas offshore
wind power projects require the construction of large,
contiguous offshore parks made up of wind turbines and
platforms. The supply chain for the construction and
operation of such wind parks is far more complex, as
both sequential and parallel – and considerably longer
– logistics services have to be planned and controlled.15
Aside from the industries mentioned earlier, it is
worthwhile taking a look at further branches of industry:
let us not forget about the logistics of major construction
sites, for example, where the scale of construction
projects, construction site accessibility, the construction
technology employed and the usage of interim storage
facilities is just as relevant as in the case of the offshore
wind power industry.
15 Interview with Erik Pietsch, Vattenfall, 08/09/2011
Industries with Best Practice Examples in the Offshore Wind Business
Grid connection
Process steps
Automotive Heavy duty & plant industry
EnergyOil & gas Onshore wind
Civil engineering
Industries
Aerospace
Installation
Foundation
Logistics (transport & shipment,
methodology)
Industries with high degree of best practice transfer Industries with low degree of best practice transfer
The Synchronization of Technology, Funding, Grid Connection and Logistics is the Key for Overall SuccessGermany‘s emerging offshore wind industry is at a
crossroads. While plant manufacturers are called upon
to develop larger and less vulnerable plants in order to
defy the harsh weather conditions out at sea, it will be
the duty of wind park operators and service providers
in particular to create a stable and profitable value-
added chain. In order to achieve that, project controlling
has to really live up to its potential and assume more
responsibility. Stepping up coordination, consultation
and communication between all stakeholders
involved would help to ensure efficient planning and
implementation of logistics requirements while wasting
as little time and as few resources as possible, seeing as
efficient logistics and the prevention of shortages are not
only key levers for the profitability of offshore projects,
but also a fundamental prerequisite for ensuring success
and a positive outcome.
However, it should not be neglected that the offshore
wind market faces numerous other challenges aside
from the logistics challenges at hand. The challenges
regarding technological progress, grid connection and
funding are interrelated and interdependent and thus
have to be overcome almost simultaneously. All in all,
even the most efficient logistics process can only make
a minor contribution to the profitability of such projects
if grid connection cannot be set up in due time and if
the technology employed is insufficient. And the service
issue presents another challenge. This is not only a
question of costs incurred, but a more fundamental
issue concerning the availability and deployment of
resources and material throughout the entire service
process. Sooner or later, non-existent or unsophisticated
service concepts will aggravate issues relating to the
availability of staff and spare parts as well as disposal
and dismantling issues.
If the challenges described here are not met in the short
run, Germany will be at a risk of failing to meet its goal
of achieving an installed capacity of 10 GW by 2020 and
fail to keep up with the developments in the promising
offshore market, thus losing its position as one of the
trailblazers in the wind power sector. In the industry, the
German North Sea is seen as the offshore pilot project
par excellence: if technology, logistics, grid connection
and funding work here, offshore wind power will also
work anywhere else in the world, because framework
conditions at almost all of the other locations are far
more favorable than in the North Sea. Both in terms of its
reputation and its leading role in the technological field,
it would be a serious setback for Germany as a business
location if the economic and ecological potential of
offshore wind power were to remain unused.
Source: Barkawi Management Consultants
Authors
Frank Reichert is heading Barkawi’s After Market Services Practice as a Vice President.
After graduating as a Diplom-Kaufmann at Munich’s LMU, including stopovers in Boston and London, Frank started his career as a consultant at Siemens Management Consulting. Followed by engagements at BayTech Venture Capital, Diebold and Detecon, he joined Barkawi Management Consultants in 2006, where he became responsible for the Aftermarket practice after a short period of time.
Frank’s core consulting topics include innovative service concepts, business and market strategies as well as operational excellence projects.
Acknowledgements to the following companies
REpower Systems SE
RWE Innogy GmbH
DB Schenker
Vattenfall Europe AG
EnBW Erneuerbare Energien GmbH
GE Energy Deutschland
Hellmann Worldwide Logistics GmbH & Co. KG
NOW Nordsee-Offshore-Wind GmbH/Northern Energy Unternehmensgruppe
Robert Kunze is a Consultant in the After Market Services Practice at Barkawi Management Consultants. He is focusing on renewable energies, e-mobility and telecommunications. Within these industries he is specialized on designing and implementing complex Service and Operations Planning Processes.
Saman Kitvarametha is a Consultant in the After Market Services Practice at Barkawi Management Consultants. Amongst other topics he is focusing on the optimization of Maintenance and Repair Processes in companies out of the renewable energies sector.
Barkawi Management Consultants I Baierbrunner Str. 35 I D-81379 Munich I Telephone +49-89-74 98 26-0 I www.barkawi.com