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Saturday, July 2, 2022

Crowley Takes Large & Leading Role In U.S. Offshore Wind

Maritime Activity Reports, Inc.

March 3, 2022

Crowley and ESVAGT have entered a joint venture to build and operate Jones Act-compliant SOVs in the U.S. market. (Image: ESVAGT / Crowley)

Crowley and ESVAGT have entered a joint venture to build and operate Jones Act-compliant SOVs in the U.S. market. (Image: ESVAGT / Crowley)

There’s often an upside to being among first-movers in an emerging industry, but many are often stifled by the risk inherent to new ventures. For Crowley, which today is leading the charge on a number of maritime fronts such as sustainability and decarbonization, the jump into U.S. offshore wind is being made with diligent planning, a team of experts, solid partners and 130 years of maritime and supply chain logistics experience in hand, each of which will help to mitigate the risk that comes with growing a new industry.

Also key, according to Crowley’s Vice President of New Energy, Jeff Andreini, is a well-defined vision and the strategy to attain it. “We've been involved in offshore wind now since roughly 2016. And, initially we looked at [our role] as utilizing tugs and barges for the purposes of transporting the components and the foundations offshore to the European wind turbine installation vessels (WTIV) due to the Jones Act rules,” Andreini said. “Within the last couple of years though, we've grown to a point where we looked at it and said, ‘Our internal skillset, our external partners give us this flexibility of playing in multiple different verticals and really becoming a full-service turnkey provider.’”

Today, Crowley is positioning itself to provide landside and marine logistics solutions during all phases of the offshore wind lifecycle to customers throughout the U.S. This includes workforce development, port terminals and marshaling, vessel development and operation and engineering. As the industry ramps up on the back of large government commitments and substantial industry investment, the question for Crowley is “How do we get there?”

And that’s where Andreini comes in. A 42-year Crowley veteran with experience in both operations and administration, he is currently responsible for the global development of renewable energy including offshore wind as well as Crowley’s current liquefied natural gas (LNG) business in Puerto Rico.

Crowley has the infrastructure [to become a full-service offshore wind services provider]; and by that, I mean the administrative support to be able to do something this significant,” Andreini said. While some maritime companies trying to make a jump into U.S. offshore wind may have a handful of individuals dedicated to the task, Crowley is assembling a proper and growing team, Andreini explained. The firm has dedicated offshore wind staff across the U.S., from the West Coast to the Gulf of Mexico, and up the Mid-Atlantic and Northeast. Its New England hub office in Providence, R.I. has a director of operations, managers of vessels, of terminals, of HSSE and training. “We have a really, really strong, strong team that's well-knit and covers all the different geographies of the United States and enables us to fulfill the vision that we have in carrying out our strategy.”

“Our internal skillset, our external partners give us this flexibility of playing in multiple different verticals and really becoming a full-service turnkey provider.” - Jeff Andreini, VP New Energy, Crowley (Photo: Crowley)

Navigating challenges
While some will say it has been a long time coming, the U.S. offshore wind industry is now finally ramping up in a big way, in large part due to the Biden Administrations announced commitment to have 30 gigawatts (GW) of offshore wind power in development by 2030. Today, only 42 megawatts (MG) of operational utility scale offshore wind power has been installed in U.S. waters—including 30 MW at the Block Island Wind Farm and 12 MG at the Coastal Virginia Offshore Wind (CVOW) pilot project—meaning America’s offshore wind industry is still relatively young with a long way to go to reach 30 GW. Certainly, there have been—and will be—challenges along the way.

“The biggest challenge is infrastructure, and this really covers three different sectors,” Andreini said. “One is the asset side. Are we going to have enough equipment floating assets to be able to carry out this goal of 30 GW by 2030? Another is on the terminal side. Where will you find the necessary acreage to facilitate marshaling and also operations and maintenance? There's a lot of terminals, a lot of land that's available, but a lot of investment is going to be required to build them out in a sufficient timeframe to meet industry needs. And then the last one is just on the pure people side. Where do you find mariners for all of these different new vessels that are going to be required, and even some of the existing vessels? Where do you find individuals who want to work in logistics or information technology, or who want to be employed running terminals? Where do you find the individuals who are going to be the technicians able to do the maintenance and repair on turbines offshore?”

Vessels
Crowley is actively working to help tackle all three challenges. With regard to assets, the company has said that many of its existing U.S.-flagged vessels, engineering and logistics services could quickly and easily pivot to support the offshore wind industry. For example, its large, capable fleet of tugs and barges can be used to feeder turbine foundations and components to WTIVs for installation offshore.

Still, new vessels will be needed as the industry continues to scale up, and the clock is ticking. “I think we are going to have a problem. I truly believe that time is running out,” Andreini said. “There's not enough tugs, certainly not enough barges. We only have one Jones Act WTIV. It's going to be difficult when the crunch comes somewhere between 2025 and 2030 for the utilization of assets.”

But building up a new Jones Act fleet for an industry not yet firing on all cylinders has its own unique set of challenges. “How do companies in the United States maritime transportation business get the necessary funding? How do they get the necessary guarantees from developers and OEMs about being able to build vessels with that are going to have some level of sustainability and longevity?” Andreini asked. “We're not going to build anything on spec. And, quite frankly, I don't think there are too many of our competitors who would either. If we can get some long-term contracts, some guarantees, I think you'll see the industry move a little bit quicker with respect to the assets that are going to be required to be able to support U.S. offshore wind.”

Crowley will be ready to build once contracts materialize. In March 2021, it announced it was teaming up with Danish shipping company ESVAGT to build and operate purpose-built, Jones Act-compliant service operations vessels (SOV), used during the operation and maintenance (O&M) phases of wind farm projects, serving as an at-sea base of operations to accommodate and transfer technicians, tools and equipment to and from turbines. “That was the first major external partner that Crowley took in this journey for offshore wind,” Andreini said. “The two companies are very synergistic in their core values for sustainability, for safety and integrity in doing business. We expect to be operating in partnership with them moving forward as the industry grows, both here on the East Coast and the Gulf of Mexico and on the West Coast as well.”

“We are responding to Equinor for Empire Wind’s needs for an SOV, which we hope to hear about by the end of the first quarter. And there is another RFP that should be coming out, hopefully in February timeframe. We have identified a shipyard where we will build the SOV here in the United States,” Andreini said. He noted that Crowley is also exploring potentially building and operating crew transfer vessels (CTV), typically aluminum catamarans, used for transporting wind farm technicians and other personnel, and sometimes equipment, out to wind farm project sites on a daily basis. These vessels would not be built and operated as part of the ESVAGT joint venture.

Terminals
In September 2021, Crowley announced it would be partnering with Vineyard Wind (a joint venture between Avangrid Renewables and Copenhagen Infrastructure Partners), and the city of Salem, Mass. to create a public-private partnership that would establish Salem Harbor as a major offshore wind port. Under the terms of the proposed deal, Crowley, through its New Energy subsidiary Crowley Wind Services, will purchase the 42 acres surrounding Salem Harbor Station, currently owned by Footprint Power LLC, and will serve as the long-term offshore wind port operator for the site, while Vineyard Wind will serve as the port’s anchor tenant.

“We're in the process of finalizing the purchase sale agreement right now with the sellers. The next steps will be doing some of the engineering geo technical designing and finalizing the lease with our anchor tenant, which should be completed by the third quarter of this year. And then we’ll focus on building out the facility, having it ready to go by 2025 to support both Park City Wind and Commonwealth Wind, and then also hopefully the floating wind that would be coming to the Gulf of Maine and the Northeast some 10 to 15 years from now.”

When asked if Crowley is interested in or currently looking into similar arrangements elsewhere, Andreini said, “Absolutely. We see terminal management as the nexus point in offshore wind everything from a supply chain point of view really flows through what's going on at the terminal itself. And it really speaks to those verticals that are a part of our strategy. Not only do we have Salem on tap, we are looking at facilities in the state of New York and New Jersey in couple of locations in the Mid-Atlantic and then also a location on the U.S. West Coast. We've begun initial discussions with some property managers in the Gulf of Mexico as well. I would hope and expect that there will be further announcements about Crowley in partnering efforts with terminals on the East Coast and potentially the West Coast to get announced before the end of this year.”

Crowley has teamed up with Vineyard Wind and the city of Salem, Mass. to establish Salem Harbor as a major offshore wind port. (Image: Crowley)

People
The process of recruiting, training and retaining the manpower necessary to build and support the industry long-term is another challenge on the minds of stakeholders today. Again, Crowley is combining its expertise with industry partners to tackle the challenge head on. In June 2021, it signed a memorandum of understanding (MOU) with specialized safety training provider RelyOn Nutec to develop and administer wind energy training through the creation of Global Wind Organization (GWO) satellite facilities.

Two months later, in August 2021, Crowley and Massachusetts Maritime Academy (MMA) revealed plans to create a first-of-its-kind training and workforce development program dedicated specifically to the New England region’s offshore wind energy industry. The program will be certified by the GWO, a non-profit that sets international standards for safety training. The academy will coordinate with Relyon Nutec to deliver the courses. “We will announce later this year, a similar arrangement in the state of New York and also up in the state of Maine. And we are finalizing the same in the states of Virginia and North Carolina,” Andreini said, adding that the goal is to develop not just the technicians that need to be certified, but also offshore wind curriculum, workforce development and mariner training to be able to support the industry.

“The labor unions are beginning to focus in on what's going to be required as it pertains, not only to the technicians, but also in regards to the mariners. It's a large task that's in front of them,” Andreini said. “The more important thing though, is how do companies like Crowley, how do labor unions, how do maritime academies, how do community colleges and all of these different states communicate to the youth today the opportunity that's out in front of them? Because the individuals that are going to be working in this industry, they're the ones that are sitting right now in middle school and in high school. When they become 20, 22, 25 years old, they are going to be the foundation for what's happening in the U.S. wind industry. We really feel that it's important to be able to communicate that to high schools, again to community colleges, so that they understand there's a tremendous opportunity here.

“You can be a technician, you can be a mariner, you can work in the information technology side, biology, there's so many different opportunities for people today beyond just again, being a mariner on a vessel, or being a technician, communicating that opportunity, training them, giving them the proper education so that they are going to be able to fill those billets is what's the most responsible thing to do. We are one of the many companies that are out there that are trying to achieve that goal.”

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