EnergyWatch

Analyst sees two wind carriers as especially well positioned for demand boom

Two companies in particular hold strong positions in terms of reaping the fruits from the wind turbine installation vessel market, which in a few years could see a situation similar to the current container market, analyst tells ShippingWatch.

Photo: cadeler

The market for the specialized and highly expensive ships used to install offshore wind turbines may in a few years look like the container market that currently dominates.

Wind turbines are only getting larger, creating demand for modern and upgraded vessels with even bigger cranes to install the heavy machines at sea.

And when comparing a demand that's expected to double with the available capacity, there is going to be an imbalance in the years up to 2025 reminiscent of that seen in container today.

Clarksons Platou's Head of Research Turner Holm says as much, and he sees two players in particular as strongly positioned on the booming market. Both are characterized by having money and the will to spend it.

We've now seen how a shipowner such as Eneti can transform, come in and raise capital to order vessels [...] I would expect others to take note and make similar moves.

Turner Holm, Head of Research, Clarksons Platou

"Eneti is making some very bold moves, and they seem to be doing everything right. They will actually be the largest player in the market when all their ships are delivered," he says, referring to the former Scorpio Bulkers, which has sold its entire dry bulk fleet to instead bank on wind turbine installation vessels (WTIVs).

"They've recently acquired Seajacks, which is a long-term operator in the market, so they have the operating confidence. For Eneti alone it would have been very difficult to come in and get established without making an acquisition like that."

Most recently, in early December, Eneti ordered its second WTIV, which is set for construction by Daewoo Shipbuilding and Marine Engineering (DSME) in South Korea. The price is USD 326m.

Eneti also recently raised close to USD 200m, which will be spent on financing new installation ships, one of which will be constructed in the US and of which Eneti can own just under half because the company isn't registered in the US. But the vessel is going to live up to the US Jones Act and may as such install wind turbines in the country. This light entry into the market provides Eneti with another advantage as offshore wind – especially under President Joe Biden – is expected to grow immensely.

There are more than ten offshore wind projects planned for establishment in US waters.

They're going to double the size of their fleet, they're building some of the highest spec vessels yet in the market, and they've built up a very strong contract backlog. So they're very well positioned.

Turner Holm, Head of Research, Clarksons Platou

"It will be key for the offshore wind installation operators to get vessels in place to build these turbines in the US," Holm says.

He also draws attention to Danish carrier Cadeler, formerly known as Swire Blue Ocean, listed in Oslo, where the company has raised around EUR 200 million for its new WTIVs. At the same time, Cadeler is investing heavily in upgrading the cranes on its existing ships, so they'll be ready to handle the larger wind turbines expected to become the norm in the coming years.

The company's listing is a strength, providing access to raising capital for investment in green energy, which is seen as attractive among investors.

"The challenges with the larger turbines in the coming years create opportunities for newer players to come in and take advantage of the disruption. And who are doing this? A lot of it comes from public companies," he says.

"They're the ones who have access to capital. Cadeler is a great example of this. They're going to double the size of their fleet, they're building some of the highest spec vessels yet in the market, and they've built up a very strong contract backlog. So they're very well positioned."

Who's next?

The interesting thing, then, is who is going to enter the market. Because, with the incoming high demand, there will most definitely be a series of completely new players investing in the large installation ships in the years to come.

"We've now seen how a shipowner such as Eneti can transform, come in and raise capital to order vessels, and then look forward to becoming the biggest player by the time the vessels are delivered. I would expect others to take note and make similar moves," he says, though he declines to name specific contenders.

"It will be interesting to see who will enter the market. We should expect some of these perhaps a bit conservative European shipowners to start looking toward offshore wind installation."

Recently, Norwegian offshore shipping line Havfram moved into the market alongside asset manager J.P. Morgan Global Alternatives with an order for a series of new WTIVs.

(This article is provided by our sister media, ShippingWatch)

Cadeler CEO eyes acquisition wave in offshore market: "There are opportunities for growth"

Eneti orders second wind service vessel for USD 326m 

Cadeler takes over 140 seafarers and reflags ships to Denmark 

 

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