In response to the global energy market disruption caused by Russia's invasion of Ukraine, European policymakers have recognized the urgency to enhance domestic energy production and meet renewable targets. The European Commission introduced the REPowerEU Plan in May 2022, which emphasized the crucial role of wind energy in rapidly reducing reliance on Russian fossil fuels by 2027. EU Member States have also agreed to nearly double their offshore wind capacities by 2030.
The development of offshore wind is also being driven by companies looking to adhere to emission control and sustainability standards. However, there are challenges in achieving sustainability goals due to the perceived cost of green options and the associated higher risks. To overcome these challenges and achieve cost savings, companies must integrate early-phase design and execution. This includes providing operations and maintenance services, leveraging digitization, and hiring personnel specialized in these sectors. Manuel Pallister, Portfolio Director for HC Group’s Sustainability practice argues, “Overall, the wind industry needs to address talent shortages, supply chain complexities, sustainability disparities, and operational integration to meet the increasing demand for renewable energy and achieve growth in the offshore wind sector”.
To gain further insights into the talent challenges confronting the offshore wind industry, HC Insider interviewed Kenneth Simonsen, an expert in the renewable energy field.
HC Insider: Which type of offshore wind energy, floating or fixed, is experiencing the most global growth?
Kenneth Simonsen: The growth of offshore wind energy is becoming increasingly global, with a particular focus on Europe, including the UK, and the US. Both bottom-fixed and floating solutions are showing great potential, which is driving the need for skilled professionals. For the remainder of this decade most wind farm developments will be based on bottom-fixed solutions. Key focus will be on technology developments such as larger turbines and increased cable transmission capacity. That said, floating wind is receiving increasing attention, but we are unlikely to witness substantial volumes in floating wind until early next decade.
HC Insider: Which areas in the wind industry are crucial for talent acquisition and retention? Are they regionally or locally oriented?
KS: For our company, Europe and the US will be the primary regions for talent recruitment, although the types of setups required may differ slightly geographically. While much of our engineering and execution muscle is based in Europe, we have more local presence with regards to business development and early phase engineering. It is crucial to have people on the ground in the prioritized markets to drive growth. Therefore, I anticipate recruiting not only within our company but also externally for early-phase engineering competence. In some key European markets like the UK, Germany, and Denmark, we already have a pool of existing talent that we can leverage, while in other regions such as the US, we will need to build new competencies.
HC Insider: Are you adapting roles in your organisation to face the supply chain issues?
KS: The scarcity of resources, including people, materials, and manufacturing capacity, is constraining the growth of the offshore wind industry. However, this challenge is also driving creativity as it forces the sector to find new business and delivery models. Shortening execution times through implementing these new models could help increase overall capacity. As we gain more experience in both bottom-fixed and floating wind and become more comfortable managing new types of risks, we can further reduce execution times.
HC Insider: What are the current difficulties you see for offshore wind in the short/medium term?
KS: The supply chain is undoubtedly an essential aspect, but there is another issue. With so many different countries and jurisdictions having offshore wind ambitions, securing acreage is becoming increasingly complicated. The rules and regulations governing acreage awards vary significantly, making it difficult for developers to build the necessary assurance. Harmonizing these rules and regulations would simplify the process, reducing the complexity of building the assurance necessary to develop offshore wind projects. While this is not a short-term solution, harmonization over the next two to three years would be immensely helpful.
HC Insider: Are there skill or talent shortages limiting growth in the offshore wind industry?
KS: There is still a lot to learn in the offshore wind industry, both in bottom-fixed and floating wind. While bottom-fixed is becoming more mainstream, there are still issues with operational longevity. With floating wind, there are logistical challenges to overcome. For example, how can you build 50 steel foundations each the size of a football field in just one or two seasons? Cooperation across the value chain and supply chain will be crucial to finding solutions to the skills shortage. This will require a whole new approach to collaboration and communication across industries, which is essential to achieving sustainability goals.
HC Insider: Are sustainability demands (scope 1,2&3) impacting how wind farms are developed?
KS: Absolutely. Customers now increasingly demand control over their emissions, which is reflected in contracts and proposals. Equally suppliers must also adhere to these standards. As we strive to strike a balance between cost and sustainability, it is unfortunate that we even have to make such a choice. Ideally, sustainability should be the obvious choice, but the reality is that green steel and cement are more expensive, often making it difficult to convince customers to choose these options. In some cases, contract processes like the UK auction process prioritize the lowest cost, which doesn't encourage the use of sustainable solutions. The perception that green options carry higher risk may also result in higher interest rates from banks and funding partners, making it more expensive for developers. Currently, the objective of achieving a commercially viable project is at odds with sustainability, and this disparity needs to be addressed.
HC Insider: How can an organization coordinate O&M effort to achieve cost savings during supply chain challenges?
KS: In the evolving offshore wind industry, integrating operational principles into early-phase design and execution is crucial for tackling supply chain challenges. By offering both operations and maintenance services and incorporating unmanned solutions, such as predictive maintenance through sensors and drone inspections, companies can leverage the potential of digitization.
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