1 00:00:00,280 --> 00:00:02,520 Speaker 1: Hey everyone. I remember the first time I saw an 2 00:00:02,520 --> 00:00:04,560 Speaker 1: offshore wind farm. It was on a flight back to 3 00:00:04,600 --> 00:00:07,080 Speaker 1: London from Portugal back in twenty fourteen. I was just 4 00:00:07,080 --> 00:00:09,039 Speaker 1: sitting there looking out the window at the sunset and 5 00:00:09,039 --> 00:00:12,240 Speaker 1: there it was so impressive. It just went on for 6 00:00:12,240 --> 00:00:15,120 Speaker 1: what seemed like forever, what looked like hundreds of turbines 7 00:00:15,120 --> 00:00:18,599 Speaker 1: spinning quietly below. Well, it turns out basically everything has 8 00:00:18,680 --> 00:00:21,880 Speaker 1: changed and offshore winds in twenty fourteen. For one, the 9 00:00:21,920 --> 00:00:25,480 Speaker 1: turbines has gotten a lot bigger, meaning more capacity per turbine, 10 00:00:25,560 --> 00:00:28,760 Speaker 1: meaning fewer turbines are at the same output. And two, 11 00:00:28,840 --> 00:00:31,200 Speaker 1: the industry is really starting to take off this year, 12 00:00:31,320 --> 00:00:34,640 Speaker 1: being IF expects ten point six gigawatts to come online globally, 13 00:00:35,000 --> 00:00:37,479 Speaker 1: up sixty six percent from last year, and the pipeline 14 00:00:37,479 --> 00:00:40,040 Speaker 1: of new projects just keeps growing. Today on the show, 15 00:00:40,240 --> 00:00:43,200 Speaker 1: we've got Image and Brown and Chelsea Jean Michelle, offshore 16 00:00:43,240 --> 00:00:45,959 Speaker 1: wind analysts for ben F. They'll tell us about what's 17 00:00:46,040 --> 00:00:48,520 Speaker 1: driving growth in offshore wind, some of the challenges facing 18 00:00:48,520 --> 00:00:51,159 Speaker 1: an adolescent industry, and who stands to gain from all 19 00:00:51,200 --> 00:00:53,840 Speaker 1: of it. This episode is based on the offshore wind 20 00:00:53,880 --> 00:00:55,959 Speaker 1: market outlook for the first half of twenty twenty one. 21 00:00:56,440 --> 00:00:58,400 Speaker 1: Being IF users can find this report on beanof Go 22 00:00:58,560 --> 00:01:00,959 Speaker 1: on the Bloomber terminal. Being If to com and being 23 00:01:01,000 --> 00:01:03,200 Speaker 1: f Mobile as a reminder of being does not provide 24 00:01:03,240 --> 00:01:05,479 Speaker 1: investment or strategy advice, and you can hear the full 25 00:01:05,480 --> 00:01:07,679 Speaker 1: disclaimer at the end of the show. Him Mark Taylor, 26 00:01:07,760 --> 00:01:18,240 Speaker 1: and you're listening to Switch on Being a podcast. Imagin, Chelsea, Welcome, 27 00:01:18,480 --> 00:01:21,640 Speaker 1: Hey Mark, Hey Mark, thanks for joining. You just mentioned 28 00:01:21,680 --> 00:01:23,360 Speaker 1: this is your first time on the show. We're really 29 00:01:23,360 --> 00:01:25,559 Speaker 1: glad to have you on. Excited to be here. Yeah, 30 00:01:25,560 --> 00:01:28,840 Speaker 1: thanks for having us. Okay, Imagen, can you just start 31 00:01:28,920 --> 00:01:32,560 Speaker 1: us off? You know why offshore wind? We have wind 32 00:01:33,200 --> 00:01:34,959 Speaker 1: already on shore, why do we need to put it 33 00:01:34,959 --> 00:01:36,640 Speaker 1: off shore? So? I think there's a few kind of 34 00:01:36,720 --> 00:01:39,560 Speaker 1: key advantages for offshore wind that we really see. So 35 00:01:39,880 --> 00:01:42,039 Speaker 1: one of the big ones is that offshore wind comes 36 00:01:42,040 --> 00:01:44,240 Speaker 1: at scale. So when you're thinking about offs your wind, 37 00:01:44,319 --> 00:01:47,520 Speaker 1: you're talking like giggle watch scale projects. So that's kind 38 00:01:47,520 --> 00:01:49,200 Speaker 1: of a similar size to what you're talking when you're 39 00:01:49,200 --> 00:01:52,560 Speaker 1: thinking about nuclear reactors, except in an offshore wind project, 40 00:01:53,000 --> 00:01:56,480 Speaker 1: you don't have that nuclear waste angle, and offshore wind 41 00:01:56,600 --> 00:01:59,280 Speaker 1: can be built much bigger because it's the sea, so 42 00:01:59,320 --> 00:02:02,400 Speaker 1: there's kind of less space confinedness than you would have 43 00:02:02,440 --> 00:02:04,840 Speaker 1: when you're building on land. At the same time, when 44 00:02:04,840 --> 00:02:07,760 Speaker 1: you're building at sea, you can use much bigger turbines. 45 00:02:08,080 --> 00:02:12,040 Speaker 1: So that's because you can't see them. So the typical 46 00:02:12,800 --> 00:02:15,000 Speaker 1: biggest offshore wind turbine that we're seeing today is around 47 00:02:15,040 --> 00:02:18,120 Speaker 1: fifty megawatts versus what you see on shore, which is 48 00:02:18,120 --> 00:02:20,680 Speaker 1: around five So they're about three times the size. They 49 00:02:20,720 --> 00:02:23,680 Speaker 1: during around three times the amount of power. So scale 50 00:02:23,800 --> 00:02:25,880 Speaker 1: is kind of one of the biggest advantages. So the 51 00:02:25,880 --> 00:02:28,880 Speaker 1: biggest advantages that it's big exactly, it's just an assumption 52 00:02:28,919 --> 00:02:30,560 Speaker 1: I have. I guess it's just something in my in 53 00:02:30,639 --> 00:02:34,160 Speaker 1: my mind, I guess that it's windier out at sea. 54 00:02:34,280 --> 00:02:37,480 Speaker 1: Is that true? Also, Yeah, definitely that is true. So 55 00:02:37,720 --> 00:02:39,480 Speaker 1: I guess if you were to take to like, for 56 00:02:39,560 --> 00:02:43,280 Speaker 1: like turbines one on shore, one offshore, the one offshore 57 00:02:43,280 --> 00:02:46,639 Speaker 1: would just spend more times during the year, okay, thereby 58 00:02:46,880 --> 00:02:50,000 Speaker 1: producing more electricity Exactly. On the show we put out 59 00:02:50,040 --> 00:02:53,000 Speaker 1: on the second of August called something like Energy Transition 60 00:02:53,080 --> 00:02:55,720 Speaker 1: Fund Frenzy I believe it was called, we mentioned that 61 00:02:55,760 --> 00:02:58,520 Speaker 1: there's going to be just a ton of wind projects 62 00:02:58,520 --> 00:03:00,440 Speaker 1: built in the next thirty years. We put it on 63 00:03:00,480 --> 00:03:03,840 Speaker 1: the order of something like sixty eight thousand wind projects, 64 00:03:03,880 --> 00:03:06,520 Speaker 1: of which we think about seven thousand of those would 65 00:03:06,520 --> 00:03:09,720 Speaker 1: be offshore wind. Basically, you know that that's Mark Taylor's 66 00:03:09,720 --> 00:03:12,760 Speaker 1: back of the envelope calculations, But really the point is 67 00:03:12,800 --> 00:03:15,920 Speaker 1: that it's going to grow like crazy. So immagrant, can 68 00:03:15,960 --> 00:03:17,840 Speaker 1: you keep it going and and tell us kind of 69 00:03:17,840 --> 00:03:21,040 Speaker 1: where we're at today and how big you think this 70 00:03:21,120 --> 00:03:23,600 Speaker 1: market is going to get for offshore wind specifically. So 71 00:03:23,639 --> 00:03:26,760 Speaker 1: where we are today, we're around thirty six gig awards, 72 00:03:26,840 --> 00:03:29,880 Speaker 1: which is the equivalent to around eight thousand turbines that 73 00:03:29,919 --> 00:03:34,440 Speaker 1: are currently operating in the waters. Almost all of that 74 00:03:34,560 --> 00:03:37,720 Speaker 1: is currently confined to Europe. But over the next sort 75 00:03:37,760 --> 00:03:40,240 Speaker 1: of ten fifteen years or so, we expect the market 76 00:03:40,360 --> 00:03:44,160 Speaker 1: to grow around eleven fold to reach over four hundred gigs. 77 00:03:44,360 --> 00:03:47,680 Speaker 1: So there's steep growth projected, and this scale is kind 78 00:03:47,680 --> 00:03:50,840 Speaker 1: of twofold. So one is that we're expecting more markets 79 00:03:50,880 --> 00:03:53,160 Speaker 1: to start building offshore wind. As I said, most of 80 00:03:53,160 --> 00:03:55,080 Speaker 1: its can find the Europe at the moment, but we're 81 00:03:55,080 --> 00:03:57,880 Speaker 1: expecting markets in a pack and the Americas start to 82 00:03:57,880 --> 00:04:00,200 Speaker 1: build off shore and The second angle is that there's 83 00:04:00,200 --> 00:04:02,520 Speaker 1: a building it currently, are just going to build more 84 00:04:02,560 --> 00:04:06,760 Speaker 1: of it. So where will this growth start? You mentioned 85 00:04:06,920 --> 00:04:09,440 Speaker 1: in your market outlook that you know this we're based 86 00:04:09,480 --> 00:04:11,680 Speaker 1: on this discussion on you said that what ten point 87 00:04:11,800 --> 00:04:15,920 Speaker 1: seven gigawatts have capacity coming online globally this year, up 88 00:04:15,960 --> 00:04:20,520 Speaker 1: sixty six from last year. So where is that growth happening? 89 00:04:20,720 --> 00:04:22,640 Speaker 1: Is it still just in Europe they're just building more? 90 00:04:22,720 --> 00:04:25,159 Speaker 1: Is are we seeing new markets opening up? So this 91 00:04:25,240 --> 00:04:27,720 Speaker 1: year in particular will be a really big year. As 92 00:04:27,720 --> 00:04:32,160 Speaker 1: you touched on eleven gigawatts of of show capacity coming online, 93 00:04:32,240 --> 00:04:37,200 Speaker 1: which is around growth on the existing fleet. The majority 94 00:04:37,200 --> 00:04:39,599 Speaker 1: of that is actually coming online in China. So a 95 00:04:39,640 --> 00:04:41,799 Speaker 1: lot of the projects in China are trying to rush 96 00:04:41,800 --> 00:04:43,880 Speaker 1: to come online this year to get hold of some 97 00:04:44,000 --> 00:04:47,440 Speaker 1: expiring subsidy that the government is offering, which ends at 98 00:04:47,440 --> 00:04:49,240 Speaker 1: the end of the year. And we saw that last 99 00:04:49,320 --> 00:04:52,200 Speaker 1: year in the Chinese market for onshore wind Right, that 100 00:04:52,240 --> 00:04:54,160 Speaker 1: they were raised to get done by these subsidies and 101 00:04:54,160 --> 00:04:57,279 Speaker 1: they put on what like a hundred gigs and three 102 00:04:57,279 --> 00:05:00,360 Speaker 1: months or something like that. It was bonkers. It was 103 00:05:00,360 --> 00:05:02,920 Speaker 1: a crazy, crazy build rush. So I think the kind 104 00:05:02,920 --> 00:05:05,960 Speaker 1: of rush off shore will be exactly the same, and 105 00:05:06,000 --> 00:05:09,520 Speaker 1: we're expecting China just to go crazy. Wow, that's really cool. 106 00:05:09,760 --> 00:05:12,000 Speaker 1: That was always seemed to be a question in offshore wind, 107 00:05:12,040 --> 00:05:13,600 Speaker 1: is that, you know wind, is China going to pick 108 00:05:13,720 --> 00:05:16,440 Speaker 1: up the torch and carry forward? It seems like they've 109 00:05:16,440 --> 00:05:18,880 Speaker 1: they've started. Where else are we going to start seeing 110 00:05:18,880 --> 00:05:21,760 Speaker 1: growth in this sector? I think that a really great 111 00:05:21,800 --> 00:05:25,000 Speaker 1: place to look for huge growth is the US. So 112 00:05:25,120 --> 00:05:27,640 Speaker 1: right now, we're currently at about forty two megawatts, which 113 00:05:27,640 --> 00:05:30,760 Speaker 1: is equivalent to seven turbines in the water. And so 114 00:05:30,960 --> 00:05:33,480 Speaker 1: the Biden administration earlier this year put out a target 115 00:05:33,480 --> 00:05:37,159 Speaker 1: for thirty gigawatts by so you can really see that 116 00:05:37,640 --> 00:05:41,320 Speaker 1: the government is really shooting for a huge amount of growth, 117 00:05:41,440 --> 00:05:44,839 Speaker 1: shooting for the stars. Yeah, you're you're going from essentially 118 00:05:44,960 --> 00:05:49,040 Speaker 1: zero to thirty gigawatts. And so if we look at 119 00:05:49,240 --> 00:05:50,920 Speaker 1: how it's going to grow, we're going to see a 120 00:05:50,960 --> 00:05:55,000 Speaker 1: lot of the large scale installations happening from onwards. But 121 00:05:55,120 --> 00:05:57,680 Speaker 1: that only gives you about six to seven years to 122 00:05:57,720 --> 00:06:00,719 Speaker 1: achieve that thirty giga watt goal. And so what that 123 00:06:00,760 --> 00:06:03,080 Speaker 1: means is the US has to average about five giga 124 00:06:03,080 --> 00:06:05,680 Speaker 1: watts per year to meet that thirty giga watt target. 125 00:06:06,040 --> 00:06:08,440 Speaker 1: But you look at some place like the UK, which 126 00:06:08,480 --> 00:06:10,200 Speaker 1: is one of the most mature offshore wind markets in 127 00:06:10,200 --> 00:06:12,280 Speaker 1: the world, and they have an average run rate of 128 00:06:12,320 --> 00:06:15,880 Speaker 1: about three giga watts per year. So putting that into perspective, 129 00:06:15,920 --> 00:06:18,640 Speaker 1: you can really see how large the school is. But 130 00:06:18,880 --> 00:06:21,719 Speaker 1: that being said, even though it's quite ambitious, it really 131 00:06:22,080 --> 00:06:25,279 Speaker 1: um sends a clear signal to developers that the US 132 00:06:25,400 --> 00:06:27,119 Speaker 1: is in it and that they're in support of growing 133 00:06:27,160 --> 00:06:30,880 Speaker 1: the market. What do you think so currently VNS is 134 00:06:30,920 --> 00:06:34,520 Speaker 1: forecasting about twenty six giga watts by twenty so we 135 00:06:34,600 --> 00:06:36,919 Speaker 1: do think that they will likely miss the target. But 136 00:06:37,040 --> 00:06:40,800 Speaker 1: that being said, states already have set multiple offshore wind 137 00:06:40,800 --> 00:06:43,720 Speaker 1: targets before the federal government did so. Looking at the 138 00:06:43,760 --> 00:06:47,320 Speaker 1: big ones, New York nine giga watts by five, New 139 00:06:47,400 --> 00:06:50,599 Speaker 1: Jersey seven and a half giga watts by five, and 140 00:06:50,640 --> 00:06:53,119 Speaker 1: then you also have Massachusetts in North Carolina with pretty 141 00:06:53,160 --> 00:06:55,760 Speaker 1: large targets. But you'll notice that these states set the 142 00:06:55,760 --> 00:06:59,600 Speaker 1: targets for instead of and so while these states might 143 00:06:59,600 --> 00:07:02,000 Speaker 1: achieve their targets, the federal government one is a little 144 00:07:02,000 --> 00:07:04,360 Speaker 1: bit more ambitious. Do you think that will drive states 145 00:07:04,400 --> 00:07:06,039 Speaker 1: to to raise their game or do you think they'll 146 00:07:06,040 --> 00:07:08,279 Speaker 1: stick to the plan or do you think more states 147 00:07:08,279 --> 00:07:10,200 Speaker 1: will come in. I guess there's a few more coastal 148 00:07:10,200 --> 00:07:13,120 Speaker 1: states that could be candidates here. Well, I guess you 149 00:07:13,160 --> 00:07:15,480 Speaker 1: could think of it kind of two fold. So one 150 00:07:15,680 --> 00:07:18,640 Speaker 1: is that there's no there's no set way that a 151 00:07:18,760 --> 00:07:21,000 Speaker 1: state is going to achieve their target. It might happen 152 00:07:21,040 --> 00:07:24,960 Speaker 1: that New York achieves nine giga watts by two so 153 00:07:25,000 --> 00:07:26,840 Speaker 1: they hit it three years earlier. It all depends on 154 00:07:26,880 --> 00:07:30,160 Speaker 1: how much capacity they procure and each solicitation that they have. 155 00:07:30,760 --> 00:07:33,680 Speaker 1: But then kind of thinking about the new states point 156 00:07:33,720 --> 00:07:36,960 Speaker 1: that you mentioned, North Carolina recently announced their target for 157 00:07:37,000 --> 00:07:40,200 Speaker 1: eight giga watts by and two point eight giga watts 158 00:07:40,320 --> 00:07:43,720 Speaker 1: by twenty thirty, I believe earlier this year, and this 159 00:07:43,800 --> 00:07:46,400 Speaker 1: is after states had already been announcing many of these targets. 160 00:07:46,400 --> 00:07:48,640 Speaker 1: So North Carolina is a fairly new state in this respect. 161 00:07:49,040 --> 00:07:51,200 Speaker 1: Then you can also pivot to looking at the west coast. 162 00:07:51,360 --> 00:07:54,640 Speaker 1: So California they have a bill where they're looking to 163 00:07:55,320 --> 00:07:58,000 Speaker 1: set off shore wind targets. They've walked back a few 164 00:07:58,080 --> 00:08:00,800 Speaker 1: of them. Initially they were going quite big, ten gigawatts 165 00:08:00,960 --> 00:08:05,600 Speaker 1: by but they walked that back and so states are 166 00:08:06,200 --> 00:08:10,160 Speaker 1: definitely interested in offshore wind. New Or States especially or 167 00:08:10,200 --> 00:08:12,840 Speaker 1: again also has a bill that they recently passed looking 168 00:08:12,880 --> 00:08:16,840 Speaker 1: to procure three gigawatts by So you have a lot 169 00:08:16,840 --> 00:08:19,040 Speaker 1: of different things, a lot of different elements in play here, 170 00:08:19,200 --> 00:08:22,480 Speaker 1: but the moral of the stories that states are interested 171 00:08:22,480 --> 00:08:24,800 Speaker 1: in offshore wind and they're shooting for the stars with 172 00:08:24,840 --> 00:08:27,320 Speaker 1: these targets, that's amazing. I mean, like we were just 173 00:08:27,360 --> 00:08:30,200 Speaker 1: commenting before we started recording that TELSA, you are an 174 00:08:30,200 --> 00:08:33,960 Speaker 1: offshore wind analyst based in New York, right, and just 175 00:08:34,040 --> 00:08:35,760 Speaker 1: a couple of years ago that would have been an 176 00:08:35,760 --> 00:08:38,560 Speaker 1: oxymoron to have an offshore wind analysts in the US. 177 00:08:38,679 --> 00:08:41,640 Speaker 1: It's it's really a testament to to where the industry 178 00:08:41,720 --> 00:08:43,880 Speaker 1: is going. I think, yeah, I agree. And when you 179 00:08:43,880 --> 00:08:46,319 Speaker 1: look at the history of offshore wind in the US, right, 180 00:08:46,360 --> 00:08:49,880 Speaker 1: it's really plagued by false starts, delays. You think of 181 00:08:50,000 --> 00:08:53,200 Speaker 1: Cape Wind, which was initially conceived in the early two 182 00:08:53,200 --> 00:08:57,280 Speaker 1: thousands and went through over a decade of trying to 183 00:08:57,280 --> 00:09:01,800 Speaker 1: get permits, trying to get on tracks, trying to simply 184 00:09:02,920 --> 00:09:05,640 Speaker 1: get through the courts right and to get this project built, 185 00:09:05,920 --> 00:09:08,760 Speaker 1: and it just didn't end up happening. But I think 186 00:09:08,800 --> 00:09:12,040 Speaker 1: what's different now is that you know, states are on board, 187 00:09:12,160 --> 00:09:15,440 Speaker 1: governments are on board, developers are interested in the market. 188 00:09:15,920 --> 00:09:18,480 Speaker 1: The stars are kind of aligning for US offshore wind now. 189 00:09:18,640 --> 00:09:21,360 Speaker 1: So it's I think it's ready to take off. Now. 190 00:09:21,960 --> 00:09:24,160 Speaker 1: The history is sad, but you know, I think it's 191 00:09:24,200 --> 00:09:27,120 Speaker 1: kind of like a redemption story for US offshore wind, 192 00:09:27,160 --> 00:09:30,640 Speaker 1: and you know, I'm ready. I'm excited to see what happens. Well, 193 00:09:30,640 --> 00:09:33,000 Speaker 1: there you go, that's all you need. Let's talk a 194 00:09:33,040 --> 00:09:34,880 Speaker 1: bit about how this is going to get done before 195 00:09:34,880 --> 00:09:36,960 Speaker 1: we get into any other markets. I want to stick 196 00:09:37,000 --> 00:09:40,199 Speaker 1: on the US for just a second. So Charles Barkley 197 00:09:40,240 --> 00:09:42,640 Speaker 1: always says this thing, no free pub you know, no 198 00:09:42,800 --> 00:09:46,360 Speaker 1: free publicity. There's this really fantastic podcast I've been listening 199 00:09:46,400 --> 00:09:49,840 Speaker 1: to lately called Windfall from Outside in from what New 200 00:09:49,840 --> 00:09:52,320 Speaker 1: Hampshire Public Media. They do a great job. They did 201 00:09:52,320 --> 00:09:55,640 Speaker 1: a deep dive on Cape wind, you know, and who 202 00:09:55,720 --> 00:09:59,360 Speaker 1: stands to gain and and not from from offshore wind 203 00:09:59,360 --> 00:10:04,240 Speaker 1: in the US. And one thing that they talked about 204 00:10:04,640 --> 00:10:08,880 Speaker 1: was how this market will be supplied so that most 205 00:10:08,920 --> 00:10:11,520 Speaker 1: of the you know, developers for these initial projects are 206 00:10:11,559 --> 00:10:14,080 Speaker 1: coming over from Denmark. Some of the ships you know 207 00:10:14,120 --> 00:10:17,040 Speaker 1: that they're coming over to do the installations are also 208 00:10:17,440 --> 00:10:20,720 Speaker 1: going to be coming from Denmark. Two questions, is the 209 00:10:20,760 --> 00:10:25,760 Speaker 1: industry globally big enough to support these ambitions in the 210 00:10:25,840 --> 00:10:29,240 Speaker 1: US and elsewhere? And second, if the ships are going 211 00:10:29,280 --> 00:10:34,000 Speaker 1: to come over from Europe to supply US projects on 212 00:10:34,040 --> 00:10:36,319 Speaker 1: the East coast, who's going to supply the ones in 213 00:10:36,360 --> 00:10:39,040 Speaker 1: the West Coast? Are they going to be able to reach, 214 00:10:39,320 --> 00:10:42,000 Speaker 1: you know, and and go through the I guess the 215 00:10:42,000 --> 00:10:43,760 Speaker 1: Panamenna Canal or I don't know how how is that 216 00:10:43,800 --> 00:10:46,400 Speaker 1: going to work? Mark? You touched on a really interesting point, 217 00:10:46,559 --> 00:10:48,360 Speaker 1: and I think that's something that a lot of people 218 00:10:48,360 --> 00:10:52,440 Speaker 1: in the industry are curious about right now. So with 219 00:10:52,520 --> 00:10:55,120 Speaker 1: the US supply chain question, there's going to need to 220 00:10:55,120 --> 00:10:57,960 Speaker 1: be massive build out, right, Like we imagine talked about 221 00:10:58,000 --> 00:11:00,520 Speaker 1: the massive growth that we're expecting. In order to realize that, 222 00:11:00,559 --> 00:11:02,640 Speaker 1: you have to have a supply chain to make that happen. 223 00:11:03,120 --> 00:11:05,760 Speaker 1: And so, for example, let's let's look at this shipping question. 224 00:11:06,240 --> 00:11:08,400 Speaker 1: So right now, there are already a lot of US 225 00:11:08,520 --> 00:11:11,320 Speaker 1: ports that are being developed to support the growing offshore 226 00:11:11,360 --> 00:11:15,560 Speaker 1: wind industry. And in the US there's also an interesting 227 00:11:15,559 --> 00:11:18,480 Speaker 1: tidbit called the Jones Act, which essentially means that if 228 00:11:18,480 --> 00:11:21,240 Speaker 1: you're traveling between any two points in the US, that 229 00:11:21,360 --> 00:11:24,640 Speaker 1: ship needs to be U S crewed, US flag, US owned, 230 00:11:24,760 --> 00:11:28,120 Speaker 1: US built, and so that adds a whole other dimension 231 00:11:28,160 --> 00:11:32,080 Speaker 1: to the U S story. So there's already a wind 232 00:11:32,080 --> 00:11:35,640 Speaker 1: turbine installation vessel being built by Dominion that's going to 233 00:11:35,640 --> 00:11:37,880 Speaker 1: be used in the first couple of oshore wind projects 234 00:11:37,920 --> 00:11:40,719 Speaker 1: in the US. But even then, you know, as all 235 00:11:40,720 --> 00:11:43,040 Speaker 1: of these projects start cropping up, and then you have 236 00:11:43,240 --> 00:11:46,599 Speaker 1: the European ships that that also need to build projects, 237 00:11:46,640 --> 00:11:50,240 Speaker 1: there's going to be a squeeze in resources that we 238 00:11:50,280 --> 00:11:53,319 Speaker 1: still need to address in terms of the East Coast 239 00:11:53,400 --> 00:11:56,040 Speaker 1: VERSUS West Coast question. You know, I think that's that's 240 00:11:56,080 --> 00:11:58,480 Speaker 1: still up for debate. It's still up for grabs, especially 241 00:11:58,520 --> 00:12:00,720 Speaker 1: when you start to think about places like YI that 242 00:12:00,840 --> 00:12:04,559 Speaker 1: already has some interesting offshore wind areas that the Bureau 243 00:12:04,600 --> 00:12:07,880 Speaker 1: of Ocean Energy Management has identified. How are they going 244 00:12:07,920 --> 00:12:10,440 Speaker 1: to build off shore wind They're very very far out 245 00:12:10,520 --> 00:12:13,920 Speaker 1: from the US mainland, but also any other any other place, 246 00:12:14,320 --> 00:12:16,520 Speaker 1: So that that brings up another interesting question for a 247 00:12:16,520 --> 00:12:20,040 Speaker 1: supply chain. So that really seems like an opportunity on 248 00:12:20,040 --> 00:12:22,880 Speaker 1: one angle and also a squeeze on the other You know, 249 00:12:22,920 --> 00:12:25,839 Speaker 1: the President Biden said, what a couple of weeks ago, 250 00:12:25,880 --> 00:12:27,800 Speaker 1: there no reason a wind turbine couldn't be made in 251 00:12:27,800 --> 00:12:30,800 Speaker 1: Pittsburgh instead of Beijing, right, is are we seeing that 252 00:12:30,840 --> 00:12:35,440 Speaker 1: to our US developers stepping up for their market or 253 00:12:35,760 --> 00:12:39,360 Speaker 1: are we seeing Japanese developers stepping up for the Japanese market? 254 00:12:39,400 --> 00:12:42,000 Speaker 1: You know, how's the who's winning and supply or who's 255 00:12:42,000 --> 00:12:43,880 Speaker 1: stepped to win and supply? Yeah, I guess speaking a 256 00:12:43,920 --> 00:12:46,360 Speaker 1: little bit more about the U S angle, developers are 257 00:12:46,440 --> 00:12:50,520 Speaker 1: committing to local jobs, local manufacturing. So there's a monopile 258 00:12:50,600 --> 00:12:53,280 Speaker 1: factory that's being built in New Jersey. I believe what's 259 00:12:53,280 --> 00:12:57,000 Speaker 1: a monopile factory? Sorry, oh yep, let me backtrack. So 260 00:12:57,160 --> 00:12:59,920 Speaker 1: when we talk about off shore wind going to star 261 00:13:00,000 --> 00:13:02,880 Speaker 1: it that over. When we talk about offshore wind, there's 262 00:13:03,000 --> 00:13:07,239 Speaker 1: two types of foundations, bottom fixed as well as floating foundations. 263 00:13:07,559 --> 00:13:11,280 Speaker 1: And for bottom fixed foundations, one of the most widely 264 00:13:11,360 --> 00:13:14,240 Speaker 1: used ones is the monopile. So think of the turbine 265 00:13:14,360 --> 00:13:17,720 Speaker 1: being connected to a connector piece known as the transition piece, 266 00:13:18,040 --> 00:13:20,800 Speaker 1: and then connected to the monopile, which is essentially the 267 00:13:20,840 --> 00:13:23,520 Speaker 1: long foundation think of it as like a long pole 268 00:13:23,920 --> 00:13:27,839 Speaker 1: that's then hammered into the sea floor. So in that case, 269 00:13:28,000 --> 00:13:31,679 Speaker 1: the monopile factory would be built in New Jersey, as 270 00:13:31,679 --> 00:13:34,480 Speaker 1: I mentioned. And then there's also a steel factory that 271 00:13:34,559 --> 00:13:37,600 Speaker 1: was recently announced by um U s Wind, who is 272 00:13:37,600 --> 00:13:40,280 Speaker 1: a developer that's planning on building a project off the 273 00:13:40,280 --> 00:13:44,199 Speaker 1: coast of Maryland. So to answer your question, yes, there's 274 00:13:44,280 --> 00:13:46,480 Speaker 1: there are some elements that will be built in the US, 275 00:13:46,559 --> 00:13:48,560 Speaker 1: but again it's still has to be built out widely, 276 00:13:48,920 --> 00:13:51,320 Speaker 1: and the earlier projects will likely depend a lot on 277 00:13:51,559 --> 00:13:55,560 Speaker 1: European manufacturing and supply chain. The ships have to take 278 00:13:55,600 --> 00:13:58,000 Speaker 1: as long as the projects themselves. I assume are there 279 00:13:58,080 --> 00:14:03,000 Speaker 1: enough ships to install all of these projects globally. Well, again, 280 00:14:03,080 --> 00:14:05,800 Speaker 1: it's another interesting point, and I think I'll pivot to 281 00:14:05,840 --> 00:14:07,880 Speaker 1: image and who maybe might know a little bit more. Sorry, 282 00:14:07,920 --> 00:14:09,640 Speaker 1: I'm just I'm just going down a rabbit hole here. 283 00:14:09,720 --> 00:14:12,600 Speaker 1: This is this is fascinating guys. Sorry. So the biggest 284 00:14:12,600 --> 00:14:14,920 Speaker 1: problem with the ships is that they're not big enough 285 00:14:15,200 --> 00:14:20,560 Speaker 1: to install the latest, greatest, biggest turbines that are hitting 286 00:14:20,560 --> 00:14:24,240 Speaker 1: like fifteen megawats, right, something like that, Exactly when they 287 00:14:24,320 --> 00:14:27,240 Speaker 1: hit fifteen megawats. The big thing is they get much taller. 288 00:14:27,480 --> 00:14:30,160 Speaker 1: So in order to install them, in order to lift 289 00:14:30,160 --> 00:14:32,280 Speaker 1: them on top of that monopile piece that Chelsea was 290 00:14:32,320 --> 00:14:34,880 Speaker 1: talking about, you have to have this big crane that 291 00:14:35,000 --> 00:14:38,480 Speaker 1: does it. And the ships today essentially are not big 292 00:14:38,600 --> 00:14:41,640 Speaker 1: enough to lift them high enough to actually get them 293 00:14:41,680 --> 00:14:47,200 Speaker 1: on top. Okay, so the upshot is so the upshot 294 00:14:47,280 --> 00:14:50,120 Speaker 1: is we need to build more ships, but more more 295 00:14:50,160 --> 00:14:52,120 Speaker 1: fun ships too. I don't know if you if you've 296 00:14:52,120 --> 00:14:54,600 Speaker 1: seen these ships, they're definitely worth googling. They look like 297 00:14:54,680 --> 00:14:56,640 Speaker 1: kind of like robots that are stuck in the water. 298 00:14:57,000 --> 00:14:59,840 Speaker 1: The way they operate is that they sail out to 299 00:15:00,000 --> 00:15:03,000 Speaker 1: sites with their legs kind of stuck on the bow, 300 00:15:03,600 --> 00:15:05,880 Speaker 1: and I get to the project site, they put their 301 00:15:05,960 --> 00:15:08,120 Speaker 1: legs and then pushed them down and put them in 302 00:15:08,160 --> 00:15:10,080 Speaker 1: the seabed, and then they jack up the bow of 303 00:15:10,120 --> 00:15:11,560 Speaker 1: the ship so that they're kind of like a stable 304 00:15:11,640 --> 00:15:14,520 Speaker 1: letting playing field for the ship, and they lift the 305 00:15:14,520 --> 00:15:18,720 Speaker 1: turbine tower on top of the foundation piece. Wow, have 306 00:15:18,840 --> 00:15:21,120 Speaker 1: you seen this? Have you? Have you gone out and 307 00:15:21,400 --> 00:15:23,960 Speaker 1: you know, watched this happen in person? In my next 308 00:15:24,000 --> 00:15:26,080 Speaker 1: life mark in your next life, man, you should go 309 00:15:26,120 --> 00:15:28,360 Speaker 1: do it. I mean back when I was I used 310 00:15:28,360 --> 00:15:30,240 Speaker 1: to be a geo thermal analyst and there's just so 311 00:15:30,320 --> 00:15:32,520 Speaker 1: much value in going out to the actual sites and 312 00:15:32,560 --> 00:15:37,280 Speaker 1: seeing them build the thing. Anyway, for another day, Um, 313 00:15:37,360 --> 00:15:39,480 Speaker 1: and we'll do a podcast on location. How about that. 314 00:15:39,560 --> 00:15:42,160 Speaker 1: Let's do that. It sounds good. Let's talk about who's 315 00:15:42,200 --> 00:15:46,080 Speaker 1: who's paying for all this for a second, so you know, 316 00:15:46,040 --> 00:15:48,440 Speaker 1: I any reference to earlier, but again, August two, we 317 00:15:48,480 --> 00:15:53,560 Speaker 1: did a show energy Transition Fund Frenzy, and in it 318 00:15:53,840 --> 00:15:56,400 Speaker 1: we talked about how, you know, there's been thirty billion 319 00:15:56,520 --> 00:15:59,120 Speaker 1: raised in the past couple of months for renewable energy 320 00:15:59,160 --> 00:16:02,360 Speaker 1: or transition fund raised by asset managers right to invest 321 00:16:02,440 --> 00:16:07,280 Speaker 1: in renewable energy projects really kind of specifically. And my 322 00:16:07,400 --> 00:16:09,560 Speaker 1: question is, first, you know, do they have an appetite 323 00:16:09,600 --> 00:16:12,600 Speaker 1: for offshore wind or is it just onshore? And if not, 324 00:16:12,800 --> 00:16:15,920 Speaker 1: you know who is paying for these these offshore wind projects? Yeah. 325 00:16:16,000 --> 00:16:18,080 Speaker 1: So offshore wind, I think is a funny one because 326 00:16:18,120 --> 00:16:21,400 Speaker 1: it hasn't been around for that long and it's still, 327 00:16:21,440 --> 00:16:25,440 Speaker 1: in many eyes, a relatively risky asset class for many people. 328 00:16:25,960 --> 00:16:29,920 Speaker 1: So having said that, the industry is maturing and we're 329 00:16:29,960 --> 00:16:32,040 Speaker 1: seeing more and more projects get built, So those kind 330 00:16:32,040 --> 00:16:35,440 Speaker 1: of risks are essentially being taken away, and so we're 331 00:16:35,440 --> 00:16:39,040 Speaker 1: starting to see the spectrum of investors that are coming 332 00:16:39,040 --> 00:16:43,200 Speaker 1: into the industry broaden. Traditionally it used to be kind 333 00:16:43,200 --> 00:16:46,480 Speaker 1: of closed club of critique players, your likes of Asted 334 00:16:46,520 --> 00:16:48,960 Speaker 1: for example, who kind of took hold of the industry. 335 00:16:49,600 --> 00:16:52,400 Speaker 1: Now we're seeing it kind of broadened out, and we're 336 00:16:52,400 --> 00:16:54,680 Speaker 1: starting to see new players like all in Gas come 337 00:16:54,720 --> 00:16:57,840 Speaker 1: into the sector and start investing the projects. So are 338 00:16:57,840 --> 00:17:01,160 Speaker 1: these mostly going to be done on balance sheets rather 339 00:17:01,240 --> 00:17:04,480 Speaker 1: than you know, somebody coming in and providing debt or 340 00:17:04,800 --> 00:17:07,720 Speaker 1: equity to these projects, because I imagine BP is just 341 00:17:07,760 --> 00:17:10,280 Speaker 1: going to pay for you know themselves or Equino or whatever. Right, 342 00:17:10,560 --> 00:17:12,399 Speaker 1: I think it will still be a combination actually of 343 00:17:12,400 --> 00:17:15,760 Speaker 1: the two. So when we do outlooks, we kind of 344 00:17:15,840 --> 00:17:19,160 Speaker 1: look at the split between project finance and balance sheet finance, 345 00:17:19,480 --> 00:17:21,679 Speaker 1: and project finance is taking more of the more of 346 00:17:21,720 --> 00:17:23,560 Speaker 1: the pie as we go forward, but I think balance 347 00:17:23,560 --> 00:17:25,320 Speaker 1: sheet finance will still be part of it, particularly as 348 00:17:25,359 --> 00:17:27,199 Speaker 1: you've mentioned with these big players that are starting to 349 00:17:27,240 --> 00:17:28,800 Speaker 1: come in that can from them. Can you talk about 350 00:17:28,840 --> 00:17:30,720 Speaker 1: that just for a second. I mean, one thing to 351 00:17:30,800 --> 00:17:32,920 Speaker 1: just caught my eye, I was looking at where was 352 00:17:32,960 --> 00:17:35,440 Speaker 1: I linked in, and I just saw a post from 353 00:17:35,880 --> 00:17:37,720 Speaker 1: a former colleague that just said, Hey, we're hiring a 354 00:17:37,760 --> 00:17:41,600 Speaker 1: hundred people for offshore wind at BP. Come come join us. 355 00:17:41,640 --> 00:17:43,280 Speaker 1: You know, as it go out, that's that's quite a 356 00:17:43,280 --> 00:17:46,680 Speaker 1: bit in one chunk, and my thoughts went to, well, 357 00:17:46,720 --> 00:17:48,359 Speaker 1: they must be doing that to compete with what the 358 00:17:48,400 --> 00:17:51,640 Speaker 1: Norwegians with Equinora, right, is that right? Or what's going 359 00:17:51,640 --> 00:17:53,600 Speaker 1: on with these oil and gas players getting into this 360 00:17:53,640 --> 00:17:56,560 Speaker 1: market specifically? Well, BP is a funny one because it's 361 00:17:56,560 --> 00:17:59,680 Speaker 1: actually partnered up with Equino, so I guess particularly in 362 00:17:59,680 --> 00:18:03,560 Speaker 1: the US, so it's uh, maybe not as much a yeah, 363 00:18:03,680 --> 00:18:07,360 Speaker 1: a foe as a friend. But I think the whole 364 00:18:07,359 --> 00:18:09,679 Speaker 1: transition of these oil and gas guys coming into offshore 365 00:18:09,680 --> 00:18:12,720 Speaker 1: wind is the fact that they under pressure from shareholders 366 00:18:12,760 --> 00:18:15,160 Speaker 1: to kind of realign businesses right and invest a lot 367 00:18:15,200 --> 00:18:17,520 Speaker 1: more in renewables, and they see offshore wind as a 368 00:18:17,520 --> 00:18:20,080 Speaker 1: really attractive way of doing that because, as I touched 369 00:18:20,080 --> 00:18:23,639 Speaker 1: on before, offshore wind brings scale, so you can buy 370 00:18:24,200 --> 00:18:27,080 Speaker 1: large scale projects or invest in large scale projects, which 371 00:18:27,080 --> 00:18:29,560 Speaker 1: brings gigga watts into your portfolio. So if you've got 372 00:18:29,560 --> 00:18:34,080 Speaker 1: a giggle wat target like BP of fifty gigawatts. By 373 00:18:34,119 --> 00:18:37,040 Speaker 1: by developing gigga wat scale assets, you can kind of 374 00:18:37,080 --> 00:18:40,480 Speaker 1: accumulate them quite quickly. Yeah. I'll also just add that 375 00:18:40,560 --> 00:18:44,359 Speaker 1: there's often an element of knowledge sharing that oil and 376 00:18:44,400 --> 00:18:47,240 Speaker 1: gas companies like to talk about. So if you look 377 00:18:47,240 --> 00:18:50,360 Speaker 1: at building an offshore oil and gas rig, a lot 378 00:18:50,400 --> 00:18:53,000 Speaker 1: of oil and gas companies see that as an opportunity 379 00:18:53,080 --> 00:18:56,080 Speaker 1: to leverage knowledge that they've learned there in the offshore 380 00:18:56,080 --> 00:18:58,640 Speaker 1: wind industry. And if you look at the eighty eight 381 00:18:58,640 --> 00:19:02,399 Speaker 1: megawatt high wind camping project that's being built off of 382 00:19:02,440 --> 00:19:06,080 Speaker 1: Norway right now by equinor those offshore wind turbines are 383 00:19:06,119 --> 00:19:08,960 Speaker 1: actually being used to power an offshore oil and gas rig. 384 00:19:09,400 --> 00:19:11,840 Speaker 1: So that's an interesting tibit there that I think that 385 00:19:11,920 --> 00:19:16,000 Speaker 1: oil and gas companies also see an opportunity. Okay, that 386 00:19:16,040 --> 00:19:18,520 Speaker 1: makes sense. Okay, let's close up this section and just 387 00:19:18,560 --> 00:19:22,080 Speaker 1: say like, okay, I just want your take. So, given 388 00:19:22,119 --> 00:19:24,359 Speaker 1: what we've talked about, you know that we're saying like 389 00:19:24,400 --> 00:19:27,000 Speaker 1: the industry has all these targets, you know, and growth, 390 00:19:27,040 --> 00:19:30,960 Speaker 1: ambitious growth plans, all this stuff, but there's also it 391 00:19:31,119 --> 00:19:33,560 Speaker 1: seems to be potential shortage to supply. I don't know, 392 00:19:34,359 --> 00:19:36,280 Speaker 1: what do you think. Do you think this is this 393 00:19:36,359 --> 00:19:37,960 Speaker 1: is a fad? Do you think it's here to stay? 394 00:19:38,000 --> 00:19:40,400 Speaker 1: Do you think this growth is sustainable? Do you think 395 00:19:40,800 --> 00:19:43,840 Speaker 1: you know these markets can reach the stars as they're 396 00:19:43,840 --> 00:19:45,720 Speaker 1: as they're trying to do. Yeah, I think it's I 397 00:19:45,760 --> 00:19:48,600 Speaker 1: think it's his to stay. I think we're seeing a 398 00:19:48,600 --> 00:19:51,560 Speaker 1: lot of ambition from government pivot towards offshore wind, which 399 00:19:51,640 --> 00:19:54,600 Speaker 1: is really exciting for the sector. At the same time, 400 00:19:55,560 --> 00:19:57,119 Speaker 1: when we talk about think about just a number of 401 00:19:57,119 --> 00:20:00,800 Speaker 1: turbines in the water. Although we're projecting large scale gigawats, 402 00:20:00,880 --> 00:20:02,960 Speaker 1: because the turbines are getting much bigger, what that actually 403 00:20:02,960 --> 00:20:05,160 Speaker 1: means is you need fewer of them. So in terms 404 00:20:05,200 --> 00:20:08,160 Speaker 1: of actually supply challenges of getting more turbines in the water, 405 00:20:08,280 --> 00:20:10,480 Speaker 1: there's actually a few essentially of them that would otherwise 406 00:20:10,480 --> 00:20:13,120 Speaker 1: be needed. So for us, I think, yeah, we're seeing 407 00:20:13,160 --> 00:20:16,119 Speaker 1: real ambition from government stepping up to set these goals, 408 00:20:16,320 --> 00:20:18,200 Speaker 1: and we're actually seeing more developers want to come in 409 00:20:18,240 --> 00:20:21,200 Speaker 1: and develop these projects. So I guess it's good news. Yeah. 410 00:20:21,240 --> 00:20:23,880 Speaker 1: I also think when we look at what happened last 411 00:20:23,960 --> 00:20:27,639 Speaker 1: year with the pandemic, we kind of saw that the 412 00:20:27,680 --> 00:20:30,560 Speaker 1: supply chain was really ready to ramp up for a 413 00:20:30,640 --> 00:20:34,720 Speaker 1: huge year of installations, and so at least in the 414 00:20:34,760 --> 00:20:36,879 Speaker 1: in the global wind industry, and so I think that 415 00:20:36,920 --> 00:20:41,200 Speaker 1: there's definitely opportunities for you know, us to be surprised, 416 00:20:41,280 --> 00:20:44,320 Speaker 1: for us to see supply chain really step up to 417 00:20:44,359 --> 00:20:46,800 Speaker 1: the plate to realize these projects. Now, it's not going 418 00:20:46,880 --> 00:20:50,040 Speaker 1: to happen by magic, of course, but there's there's potential 419 00:20:50,080 --> 00:20:52,280 Speaker 1: for growth and for it to be realized. If you 420 00:20:52,280 --> 00:20:54,399 Speaker 1: didn't know what a monopile was before passing play on 421 00:20:54,400 --> 00:20:56,439 Speaker 1: this podcast, we're going to take a short break and 422 00:20:56,440 --> 00:20:57,919 Speaker 1: when we come back, we're going to talk about some 423 00:20:57,960 --> 00:21:00,720 Speaker 1: of the tech involved in offshore wind. So we'll talk 424 00:21:00,720 --> 00:21:03,600 Speaker 1: about monopiles, we'll talk about floating wind, all of it. 425 00:21:03,920 --> 00:21:10,520 Speaker 1: Stay with us. So in the top we just briefly 426 00:21:10,560 --> 00:21:14,880 Speaker 1: mentioned that these turbines can hit what fifteen megawatts apiece? Right, 427 00:21:14,920 --> 00:21:17,480 Speaker 1: those are giant? Can you try to put that in 428 00:21:17,560 --> 00:21:20,040 Speaker 1: perspective for us, You know, how big are these things? 429 00:21:20,240 --> 00:21:23,639 Speaker 1: So a fifteen megawat turbine today is around two hundred 430 00:21:23,640 --> 00:21:26,040 Speaker 1: and sixty ms high from the base of the turbine 431 00:21:26,040 --> 00:21:28,600 Speaker 1: to the blade tip when it's right at its top 432 00:21:28,880 --> 00:21:35,000 Speaker 1: and for reference, the Eiffel Tower is around three high. Okay, wow, 433 00:21:35,119 --> 00:21:37,199 Speaker 1: so we're talking pretty big. The big thing here is 434 00:21:37,240 --> 00:21:40,200 Speaker 1: we expect them to get bigger. So we did some 435 00:21:40,400 --> 00:21:43,879 Speaker 1: estimates at benf and we expect turbines to get to 436 00:21:43,960 --> 00:21:48,560 Speaker 1: around three seventy five ms high by okay, so taller 437 00:21:48,600 --> 00:21:51,880 Speaker 1: than the Eiffel Tower. Eiffel Tower exactly wow, and quite 438 00:21:51,920 --> 00:21:54,879 Speaker 1: a bit taller. Geez. Is that the limit? You know? 439 00:21:55,000 --> 00:21:56,760 Speaker 1: Is there a limit to how big these things can get? 440 00:21:57,000 --> 00:22:01,080 Speaker 1: When you're looking at a three eight meter turbine, how 441 00:22:01,160 --> 00:22:03,720 Speaker 1: much power output do you think that would would you 442 00:22:03,760 --> 00:22:06,600 Speaker 1: expect that to produce? So the key thing about offshore 443 00:22:06,640 --> 00:22:10,479 Speaker 1: turbines is they're not really constrained in size. So unlike 444 00:22:10,600 --> 00:22:15,040 Speaker 1: turbines onshore, you're kind of constrained in size because people 445 00:22:15,080 --> 00:22:17,840 Speaker 1: don't like to see them. So you don't like to 446 00:22:17,840 --> 00:22:20,399 Speaker 1: see a huge turbine in your backyard. But at the 447 00:22:20,400 --> 00:22:22,399 Speaker 1: same time, you're kind of constrained in size because you 448 00:22:22,440 --> 00:22:25,760 Speaker 1: have to transport the turbine components via road, which means 449 00:22:25,840 --> 00:22:28,639 Speaker 1: that sometimes it's almost impossible to get them under bridges 450 00:22:28,960 --> 00:22:31,879 Speaker 1: or just almost impossible to get them through various corners 451 00:22:31,880 --> 00:22:34,959 Speaker 1: of roads. Whereas offshore you just need to transport them 452 00:22:34,960 --> 00:22:38,880 Speaker 1: by a ship and there's less constraints there. When we're 453 00:22:38,880 --> 00:22:42,280 Speaker 1: talking about a turbine that's in heights, we're suggesting that's 454 00:22:42,280 --> 00:22:45,520 Speaker 1: around thirty five megawats, which is pretty big. So if 455 00:22:45,560 --> 00:22:47,800 Speaker 1: you're looking at a gigger what scale projects that we're 456 00:22:47,840 --> 00:22:50,600 Speaker 1: looking at the moment, you only need around thirty turbines. 457 00:22:51,080 --> 00:22:53,320 Speaker 1: I heard that in the you Know the Outside in 458 00:22:53,400 --> 00:22:55,760 Speaker 1: podcast I mentioned earlier, is that when they had to 459 00:22:57,040 --> 00:23:00,480 Speaker 1: reassess the Vineyard wind project because it hits some hit 460 00:23:00,560 --> 00:23:05,000 Speaker 1: some snags, the technology it advanced and they went from 461 00:23:05,040 --> 00:23:07,479 Speaker 1: having to do a hundred turbines down to like sixty 462 00:23:07,520 --> 00:23:11,000 Speaker 1: seven or sixty two or something like that. So bigger 463 00:23:11,040 --> 00:23:14,600 Speaker 1: outputting more output turbine, fewer turbines. That's that's pretty cool. 464 00:23:15,000 --> 00:23:18,000 Speaker 1: How does that impact cost? You know, are these turbines? 465 00:23:18,520 --> 00:23:21,840 Speaker 1: Are these projects more expensive? With bigger turbines are even 466 00:23:21,840 --> 00:23:23,920 Speaker 1: out as it cheaper? How does that work? No, that's 467 00:23:23,920 --> 00:23:27,200 Speaker 1: one of the big drivers reducing the cost of offshore wind. 468 00:23:27,320 --> 00:23:30,879 Speaker 1: So bigger turbines means you need fewer of them, So 469 00:23:30,960 --> 00:23:34,399 Speaker 1: that means you need fewer cables, you need fewer monopiles, 470 00:23:34,400 --> 00:23:38,440 Speaker 1: you need fewer you need less time offshore constructing them, 471 00:23:38,480 --> 00:23:40,920 Speaker 1: and that ultimately means that the cost of the project 472 00:23:41,080 --> 00:23:43,639 Speaker 1: is lower. So bigger turbines are the key driver behind 473 00:23:43,800 --> 00:23:46,560 Speaker 1: reducing costs in the industry. Can you talk about that 474 00:23:46,640 --> 00:23:49,080 Speaker 1: just a bit more, like, how does that relate to 475 00:23:49,200 --> 00:23:54,040 Speaker 1: the cost of other renewable technologies like solar or on 476 00:23:54,080 --> 00:23:56,840 Speaker 1: shore wind. Offshore wind is around double as expensive as 477 00:23:56,880 --> 00:23:59,000 Speaker 1: an onshore wind project. But do you make up for 478 00:23:59,080 --> 00:24:03,240 Speaker 1: it because the ind is blowing harder and and more 479 00:24:03,280 --> 00:24:07,240 Speaker 1: often you know, out at sea, or how does that work? Well? 480 00:24:07,280 --> 00:24:09,800 Speaker 1: The key thing is that because they are more expensive, 481 00:24:09,840 --> 00:24:12,040 Speaker 1: governments have had to subsidize them. They've done that in 482 00:24:12,080 --> 00:24:15,240 Speaker 1: kind of two ways. Governments are either subsidizing projects by 483 00:24:15,320 --> 00:24:18,960 Speaker 1: paying developers a premium for the power that they're actually generating. 484 00:24:19,680 --> 00:24:23,560 Speaker 1: Or movements have subsidized the projects by paying for some 485 00:24:23,600 --> 00:24:26,360 Speaker 1: of the upfront costs of the project that the developer 486 00:24:26,359 --> 00:24:29,359 Speaker 1: would otherwise would have had to have paid for. Traditionally, 487 00:24:29,359 --> 00:24:31,040 Speaker 1: they kind of have done this by paying for the 488 00:24:31,080 --> 00:24:33,679 Speaker 1: transmission element of the projects. That's the big cable that 489 00:24:33,800 --> 00:24:35,919 Speaker 1: like brings the power back to shore from the offshore 490 00:24:35,920 --> 00:24:39,000 Speaker 1: wind farm, and that's actually a pretty substantive cost, particularly 491 00:24:39,000 --> 00:24:41,800 Speaker 1: as these projects get further from shore, that cable can 492 00:24:41,880 --> 00:24:44,600 Speaker 1: be around a third of the total capex of the project. 493 00:24:45,080 --> 00:24:46,919 Speaker 1: Know how far out at sea are these projects? How 494 00:24:46,960 --> 00:24:49,080 Speaker 1: long is that cable? You know? Because I guess there's 495 00:24:49,240 --> 00:24:51,320 Speaker 1: a question of are they and I sor you know, 496 00:24:51,359 --> 00:24:53,680 Speaker 1: and you know, visible from shore and all that stuff. 497 00:24:53,720 --> 00:24:55,880 Speaker 1: Where do you have to put them? So projects getting 498 00:24:55,880 --> 00:24:59,439 Speaker 1: built today are around two kilometers from shore. That's the 499 00:24:59,440 --> 00:25:02,359 Speaker 1: furthest we've seen so pretty far. And they're getting further 500 00:25:02,400 --> 00:25:05,280 Speaker 1: from shore because you can access better wind speeds there. 501 00:25:05,960 --> 00:25:07,919 Speaker 1: A lot of the early projects were close to shore. 502 00:25:08,480 --> 00:25:11,199 Speaker 1: Um that's one because they were using smaller turbines so 503 00:25:11,320 --> 00:25:14,040 Speaker 1: they weren't as much of an aysore. But it was 504 00:25:14,080 --> 00:25:17,080 Speaker 1: also easier to operate them close to shore obviously. So 505 00:25:17,119 --> 00:25:20,000 Speaker 1: my instant question when you mentioned how how far out 506 00:25:20,000 --> 00:25:22,200 Speaker 1: they are from shoes that cheese doesn't the sea floor? 507 00:25:22,240 --> 00:25:25,120 Speaker 1: Isn't the sea floor like pretty pretty far down there 508 00:25:25,200 --> 00:25:27,000 Speaker 1: at that point? Like I remember one time I was 509 00:25:27,040 --> 00:25:29,240 Speaker 1: in where was like Turks and Caicos and you can 510 00:25:29,280 --> 00:25:32,040 Speaker 1: see the continental shelf just drop off and it just 511 00:25:32,080 --> 00:25:35,520 Speaker 1: goes down forever. Does that make things more expensive or 512 00:25:35,560 --> 00:25:37,920 Speaker 1: does it open up for things like like floating wind. 513 00:25:38,600 --> 00:25:42,440 Speaker 1: Well Mark, You're exactly right. As projects move further out, 514 00:25:42,560 --> 00:25:45,359 Speaker 1: usually you're dealing with a lot deeper waters, and so 515 00:25:45,440 --> 00:25:49,000 Speaker 1: with deeper waters you can't necessarily use a monopile or 516 00:25:49,040 --> 00:25:51,800 Speaker 1: a bottom fixed foundation anymore. You do have to pivot 517 00:25:51,800 --> 00:25:54,719 Speaker 1: to floating wind. And the threshold that we usually um 518 00:25:54,960 --> 00:25:59,120 Speaker 1: look to is about sixty or two feet, and so 519 00:25:59,200 --> 00:26:01,400 Speaker 1: that's kind of when you think, okay, I can no 520 00:26:01,440 --> 00:26:05,000 Speaker 1: longer use bottom fixed let me pivot to floating and 521 00:26:05,720 --> 00:26:08,479 Speaker 1: floating wind is essentially think of it as like a 522 00:26:08,520 --> 00:26:11,640 Speaker 1: turbine on a boat, and so instead of it being 523 00:26:11,720 --> 00:26:15,000 Speaker 1: fixed to a foundation that's then fixed to the sea floor, 524 00:26:15,280 --> 00:26:18,000 Speaker 1: it's instead fixed to a foundation that's kind of somewhere 525 00:26:18,040 --> 00:26:20,560 Speaker 1: along sea level, and then it has a counter weight 526 00:26:20,720 --> 00:26:23,280 Speaker 1: to balance out the weight of the turbine itself. Depending 527 00:26:23,320 --> 00:26:27,080 Speaker 1: on the design, it might be underneath the underneath sea level, 528 00:26:27,160 --> 00:26:30,159 Speaker 1: kind of working around the surface of the sea, and 529 00:26:30,160 --> 00:26:32,640 Speaker 1: then that's then attached to mooring cables which are then 530 00:26:32,720 --> 00:26:35,720 Speaker 1: anchored into the sea floor. So it's a lot more 531 00:26:35,760 --> 00:26:39,200 Speaker 1: complex engineering wise, and it's also a lot more expensive 532 00:26:39,280 --> 00:26:42,560 Speaker 1: than bottom fixed foundations. However, as image and mentioned, the 533 00:26:42,560 --> 00:26:45,600 Speaker 1: further out that you go, you can also achieve greater 534 00:26:45,640 --> 00:26:48,280 Speaker 1: wind speeds, more consistent wind speeds, and so there's some 535 00:26:48,359 --> 00:26:51,920 Speaker 1: benefits there. So it just seems like a big job 536 00:26:52,160 --> 00:26:57,400 Speaker 1: for the people that are figuring out the optimization between 537 00:26:58,280 --> 00:27:04,960 Speaker 1: line losses, water depth, turbine size. Basically, the engineers of 538 00:27:05,000 --> 00:27:09,000 Speaker 1: figuring out the optimal locations and specs for these projects. 539 00:27:09,080 --> 00:27:13,320 Speaker 1: Right countries around the world usually have opted for bottom 540 00:27:13,320 --> 00:27:17,200 Speaker 1: fixed right because it's more mature, it's cheaper, it makes sense. 541 00:27:17,560 --> 00:27:20,479 Speaker 1: But then you also have some regions, so take the 542 00:27:20,480 --> 00:27:23,320 Speaker 1: west coast of the US where bottom fixed foundations are 543 00:27:23,359 --> 00:27:25,560 Speaker 1: not an options. You have that steep drop off the 544 00:27:25,560 --> 00:27:28,359 Speaker 1: continental shelf that you mentioned, and if they want offshore wind, 545 00:27:28,560 --> 00:27:31,040 Speaker 1: they're going to have to install floating and so it's 546 00:27:31,080 --> 00:27:33,920 Speaker 1: kind of you know that that narrows down the engineering 547 00:27:33,960 --> 00:27:36,080 Speaker 1: question a little bit more when you when you have 548 00:27:36,119 --> 00:27:38,199 Speaker 1: to ask yourself, what's possible for us to do with 549 00:27:38,240 --> 00:27:41,119 Speaker 1: our geography. Flitting wind opens up a whole load of 550 00:27:41,160 --> 00:27:44,000 Speaker 1: new markets the west coast of the US, some sites 551 00:27:44,040 --> 00:27:49,240 Speaker 1: in Japan, South Korea, some sites in Mediterranean, in France, Scotland. 552 00:27:49,960 --> 00:27:53,399 Speaker 1: So floating wind is a kind of alternative technology which 553 00:27:53,920 --> 00:27:57,479 Speaker 1: could potentially grow the sector much further than what bottom 554 00:27:57,480 --> 00:27:59,800 Speaker 1: fix could. Okay, so I got one more question on 555 00:27:59,800 --> 00:28:04,320 Speaker 1: on tech or you know, project engineering. Once I was flying, 556 00:28:05,040 --> 00:28:08,200 Speaker 1: I hated relative thing, back to personal whatever. But I 557 00:28:08,240 --> 00:28:10,920 Speaker 1: remember one time I was flying from what Portugal back 558 00:28:10,960 --> 00:28:15,200 Speaker 1: to London and I just noticed these giant offshore wind 559 00:28:15,240 --> 00:28:17,760 Speaker 1: farms that were just taking up a lot of space. 560 00:28:18,320 --> 00:28:21,199 Speaker 1: So can you comment on just like how much I 561 00:28:21,240 --> 00:28:23,639 Speaker 1: guess see area, I don't even know what you call 562 00:28:23,680 --> 00:28:26,520 Speaker 1: it that these projects take up. Yeah, these four projects 563 00:28:26,560 --> 00:28:28,640 Speaker 1: can be huge. So the biggest one in the UK, 564 00:28:28,800 --> 00:28:33,159 Speaker 1: which is owned by sec Equano or in any spans 565 00:28:33,200 --> 00:28:36,560 Speaker 1: pretty much the area of Greater London. So that's over 566 00:28:36,600 --> 00:28:40,000 Speaker 1: one kilometers squared. If you were to put that into 567 00:28:40,000 --> 00:28:42,760 Speaker 1: football pitches or soccer pitches for you guys in the US, 568 00:28:42,840 --> 00:28:46,360 Speaker 1: that's over two hundred thousand soccer pitches. And so does 569 00:28:46,400 --> 00:28:49,440 Speaker 1: that mean are we going to see at some point 570 00:28:49,480 --> 00:28:53,800 Speaker 1: We're probably gonna see a repowering of plants like that 571 00:28:54,000 --> 00:28:57,600 Speaker 1: right where you'd have bigger turbines, you know, they take 572 00:28:57,640 --> 00:29:00,400 Speaker 1: down all the old turbines and rep raced them with 573 00:29:00,440 --> 00:29:03,480 Speaker 1: bigger ones that get the same output for with a 574 00:29:03,520 --> 00:29:05,320 Speaker 1: smaller footprint. Is that right? Or is they're going to 575 00:29:05,440 --> 00:29:08,560 Speaker 1: leave those there forever. So turbine technology now kind of 576 00:29:08,600 --> 00:29:10,800 Speaker 1: lost around thirty years. A lot of the sites are 577 00:29:11,040 --> 00:29:15,200 Speaker 1: taken for thirty years. So we'll see projects repowered on 578 00:29:15,240 --> 00:29:18,600 Speaker 1: that basis, and I guess in thirty years time we'll 579 00:29:18,640 --> 00:29:20,360 Speaker 1: let you know how big turbines are at that point. 580 00:29:21,000 --> 00:29:23,560 Speaker 1: There you go. Hey, I got one more question for 581 00:29:23,600 --> 00:29:28,160 Speaker 1: you guys. So you're not an offshore wind analyst, you're 582 00:29:28,160 --> 00:29:30,320 Speaker 1: not any analyst at all, but you're still an offshore 583 00:29:30,360 --> 00:29:34,880 Speaker 1: wind what's the one job you choose. I'm a turbine technician, definitely. 584 00:29:35,320 --> 00:29:39,280 Speaker 1: Oh I was going to choose carabine technician. I'm standing 585 00:29:39,320 --> 00:29:44,080 Speaker 1: on the top of this fifteen megawat turline and maybe 586 00:29:44,160 --> 00:29:47,160 Speaker 1: fixing the gearbox. Yeah, you just have to go out 587 00:29:47,160 --> 00:29:49,560 Speaker 1: there and fix the turbines and you get to be 588 00:29:49,600 --> 00:29:52,920 Speaker 1: on top of the world amongst these huge structures. It's 589 00:29:52,960 --> 00:29:56,160 Speaker 1: kind of great. Okay, So both of you turbine technician. 590 00:29:56,800 --> 00:29:58,960 Speaker 1: All right. I think the main thing we've learned today 591 00:29:59,000 --> 00:30:04,000 Speaker 1: then everybody, is that neither Imagen nor Chelsea are afraid 592 00:30:04,040 --> 00:30:08,600 Speaker 1: of heights. Okay, Imagen Chelsea. Thanks for joining. Thanks so much, Mark. 593 00:30:08,600 --> 00:30:17,760 Speaker 1: It was a lot of fun. Thanks Mark. This week's 594 00:30:17,760 --> 00:30:20,280 Speaker 1: show was produced by Ava Gonzalez E SLA and edited 595 00:30:20,280 --> 00:30:22,680 Speaker 1: by Rex Warner of gray Stoke Media. Bloomberg an E 596 00:30:22,680 --> 00:30:25,040 Speaker 1: app is a service provided by Bloomberg Finance LP and 597 00:30:25,040 --> 00:30:27,960 Speaker 1: its affiliates. This recording does not constitute, nor should it 598 00:30:28,000 --> 00:30:31,960 Speaker 1: be construed, as investment advice, investment recommendations, or a recommendation 599 00:30:32,040 --> 00:30:34,560 Speaker 1: as to an investment or other strategy. Bloomberg an E 600 00:30:34,800 --> 00:30:37,440 Speaker 1: should not be considered as information sufficient upon which to 601 00:30:37,520 --> 00:30:41,120 Speaker 1: base an investment decision. Neither Bloomberg Finance LP nor any 602 00:30:41,160 --> 00:30:44,160 Speaker 1: of its affiliates makes any representation or warranty as to 603 00:30:44,200 --> 00:30:47,520 Speaker 1: the accuracy or completeness of the information contained in this recording, 604 00:30:47,600 --> 00:30:49,920 Speaker 1: and any liability as a result of this recording is 605 00:30:49,920 --> 00:30:50,720 Speaker 1: expressly discla