WEBVTT - The Coming Boom in Offshore Wind 0:00:00.280 --> 0:00:02.520 Hey everyone. I remember the first time I saw an 0:00:02.520 --> 0:00:04.560 offshore wind farm. It was on a flight back to 0:00:04.600 --> 0:00:07.080 London from Portugal back in twenty fourteen. I was just 0:00:07.080 --> 0:00:09.039 sitting there looking out the window at the sunset and 0:00:09.039 --> 0:00:12.240 there it was so impressive. It just went on for 0:00:12.240 --> 0:00:15.120 what seemed like forever, what looked like hundreds of turbines 0:00:15.120 --> 0:00:18.599 spinning quietly below. Well, it turns out basically everything has 0:00:18.680 --> 0:00:21.880 changed and offshore winds in twenty fourteen. For one, the 0:00:21.920 --> 0:00:25.480 turbines has gotten a lot bigger, meaning more capacity per turbine, 0:00:25.560 --> 0:00:28.760 meaning fewer turbines are at the same output. And two, 0:00:28.840 --> 0:00:31.200 the industry is really starting to take off this year, 0:00:31.320 --> 0:00:34.640 being IF expects ten point six gigawatts to come online globally, 0:00:35.000 --> 0:00:37.479 up sixty six percent from last year, and the pipeline 0:00:37.479 --> 0:00:40.040 of new projects just keeps growing. Today on the show, 0:00:40.240 --> 0:00:43.200 we've got Image and Brown and Chelsea Jean Michelle, offshore 0:00:43.240 --> 0:00:45.959 wind analysts for ben F. They'll tell us about what's 0:00:46.040 --> 0:00:48.520 driving growth in offshore wind, some of the challenges facing 0:00:48.520 --> 0:00:51.159 an adolescent industry, and who stands to gain from all 0:00:51.200 --> 0:00:53.840 of it. This episode is based on the offshore wind 0:00:53.880 --> 0:00:55.959 market outlook for the first half of twenty twenty one. 0:00:56.440 --> 0:00:58.400 Being IF users can find this report on beanof Go 0:00:58.560 --> 0:01:00.959 on the Bloomber terminal. Being If to com and being 0:01:01.000 --> 0:01:03.200 f Mobile as a reminder of being does not provide 0:01:03.240 --> 0:01:05.479 investment or strategy advice, and you can hear the full 0:01:05.480 --> 0:01:07.679 disclaimer at the end of the show. Him Mark Taylor, 0:01:07.760 --> 0:01:18.240 and you're listening to Switch on Being a podcast. Imagin, Chelsea, Welcome, 0:01:18.480 --> 0:01:21.640 Hey Mark, Hey Mark, thanks for joining. You just mentioned 0:01:21.680 --> 0:01:23.360 this is your first time on the show. We're really 0:01:23.360 --> 0:01:25.559 glad to have you on. Excited to be here. Yeah, 0:01:25.560 --> 0:01:28.840 thanks for having us. Okay, Imagen, can you just start 0:01:28.920 --> 0:01:32.560 us off? You know why offshore wind? We have wind 0:01:33.200 --> 0:01:34.959 already on shore, why do we need to put it 0:01:34.959 --> 0:01:36.640 off shore? So? I think there's a few kind of 0:01:36.720 --> 0:01:39.560 key advantages for offshore wind that we really see. So 0:01:39.880 --> 0:01:42.039 one of the big ones is that offshore wind comes 0:01:42.040 --> 0:01:44.240 at scale. So when you're thinking about offs your wind, 0:01:44.319 --> 0:01:47.520 you're talking like giggle watch scale projects. So that's kind 0:01:47.520 --> 0:01:49.200 of a similar size to what you're talking when you're 0:01:49.200 --> 0:01:52.560 thinking about nuclear reactors, except in an offshore wind project, 0:01:53.000 --> 0:01:56.480 you don't have that nuclear waste angle, and offshore wind 0:01:56.600 --> 0:01:59.280 can be built much bigger because it's the sea, so 0:01:59.320 --> 0:02:02.400 there's kind of less space confinedness than you would have 0:02:02.440 --> 0:02:04.840 when you're building on land. At the same time, when 0:02:04.840 --> 0:02:07.760 you're building at sea, you can use much bigger turbines. 0:02:08.080 --> 0:02:12.040 So that's because you can't see them. So the typical 0:02:12.800 --> 0:02:15.000 biggest offshore wind turbine that we're seeing today is around 0:02:15.040 --> 0:02:18.120 fifty megawatts versus what you see on shore, which is 0:02:18.120 --> 0:02:20.680 around five So they're about three times the size. They 0:02:20.720 --> 0:02:23.680 during around three times the amount of power. So scale 0:02:23.800 --> 0:02:25.880 is kind of one of the biggest advantages. So the 0:02:25.880 --> 0:02:28.880 biggest advantages that it's big exactly, it's just an assumption 0:02:28.919 --> 0:02:30.560 I have. I guess it's just something in my in 0:02:30.639 --> 0:02:34.160 my mind, I guess that it's windier out at sea. 0:02:34.280 --> 0:02:37.480 Is that true? Also, Yeah, definitely that is true. So 0:02:37.720 --> 0:02:39.480 I guess if you were to take to like, for 0:02:39.560 --> 0:02:43.280 like turbines one on shore, one offshore, the one offshore 0:02:43.280 --> 0:02:46.639 would just spend more times during the year, okay, thereby 0:02:46.880 --> 0:02:50.000 producing more electricity Exactly. On the show we put out 0:02:50.040 --> 0:02:53.000 on the second of August called something like Energy Transition 0:02:53.080 --> 0:02:55.720 Fund Frenzy I believe it was called, we mentioned that 0:02:55.760 --> 0:02:58.520 there's going to be just a ton of wind projects 0:02:58.520 --> 0:03:00.440 built in the next thirty years. We put it on 0:03:00.480 --> 0:03:03.840 the order of something like sixty eight thousand wind projects, 0:03:03.880 --> 0:03:06.520 of which we think about seven thousand of those would 0:03:06.520 --> 0:03:09.720 be offshore wind. Basically, you know that that's Mark Taylor's 0:03:09.720 --> 0:03:12.760 back of the envelope calculations, But really the point is 0:03:12.800 --> 0:03:15.920 that it's going to grow like crazy. So immagrant, can 0:03:15.960 --> 0:03:17.840 you keep it going and and tell us kind of 0:03:17.840 --> 0:03:21.040 where we're at today and how big you think this 0:03:21.120 --> 0:03:23.600 market is going to get for offshore wind specifically. So 0:03:23.639 --> 0:03:26.760 where we are today, we're around thirty six gig awards, 0:03:26.840 --> 0:03:29.880 which is the equivalent to around eight thousand turbines that 0:03:29.919 --> 0:03:34.440 are currently operating in the waters. Almost all of that 0:03:34.560 --> 0:03:37.720 is currently confined to Europe. But over the next sort 0:03:37.760 --> 0:03:40.240 of ten fifteen years or so, we expect the market 0:03:40.360 --> 0:03:44.160 to grow around eleven fold to reach over four hundred gigs. 0:03:44.360 --> 0:03:47.680 So there's steep growth projected, and this scale is kind 0:03:47.680 --> 0:03:50.840 of twofold. So one is that we're expecting more markets 0:03:50.880 --> 0:03:53.160 to start building offshore wind. As I said, most of 0:03:53.160 --> 0:03:55.080 its can find the Europe at the moment, but we're 0:03:55.080 --> 0:03:57.880 expecting markets in a pack and the Americas start to 0:03:57.880 --> 0:04:00.200 build off shore and The second angle is that there's 0:04:00.200 --> 0:04:02.520 a building it currently, are just going to build more 0:04:02.560 --> 0:04:06.760 of it. So where will this growth start? You mentioned 0:04:06.920 --> 0:04:09.440 in your market outlook that you know this we're based 0:04:09.480 --> 0:04:11.680 on this discussion on you said that what ten point 0:04:11.800 --> 0:04:15.920 seven gigawatts have capacity coming online globally this year, up 0:04:15.960 --> 0:04:20.520 sixty six from last year. So where is that growth happening? 0:04:20.720 --> 0:04:22.640 Is it still just in Europe they're just building more? 0:04:22.720 --> 0:04:25.159 Is are we seeing new markets opening up? So this 0:04:25.240 --> 0:04:27.720 year in particular will be a really big year. As 0:04:27.720 --> 0:04:32.160 you touched on eleven gigawatts of of show capacity coming online, 0:04:32.240 --> 0:04:37.200 which is around growth on the existing fleet. The majority 0:04:37.200 --> 0:04:39.599 of that is actually coming online in China. So a 0:04:39.640 --> 0:04:41.799 lot of the projects in China are trying to rush 0:04:41.800 --> 0:04:43.880 to come online this year to get hold of some 0:04:44.000 --> 0:04:47.440 expiring subsidy that the government is offering, which ends at 0:04:47.440 --> 0:04:49.240 the end of the year. And we saw that last 0:04:49.320 --> 0:04:52.200 year in the Chinese market for onshore wind Right, that 0:04:52.240 --> 0:04:54.160 they were raised to get done by these subsidies and 0:04:54.160 --> 0:04:57.279 they put on what like a hundred gigs and three 0:04:57.279 --> 0:05:00.360 months or something like that. It was bonkers. It was 0:05:00.360 --> 0:05:02.920 a crazy, crazy build rush. So I think the kind 0:05:02.920 --> 0:05:05.960 of rush off shore will be exactly the same, and 0:05:06.000 --> 0:05:09.520 we're expecting China just to go crazy. Wow, that's really cool. 0:05:09.760 --> 0:05:12.000 That was always seemed to be a question in offshore wind, 0:05:12.040 --> 0:05:13.600 is that, you know wind, is China going to pick 0:05:13.720 --> 0:05:16.440 up the torch and carry forward? It seems like they've 0:05:16.440 --> 0:05:18.880 they've started. Where else are we going to start seeing 0:05:18.880 --> 0:05:21.760 growth in this sector? I think that a really great 0:05:21.800 --> 0:05:25.000 place to look for huge growth is the US. So 0:05:25.120 --> 0:05:27.640 right now, we're currently at about forty two megawatts, which 0:05:27.640 --> 0:05:30.760 is equivalent to seven turbines in the water. And so 0:05:30.960 --> 0:05:33.480 the Biden administration earlier this year put out a target 0:05:33.480 --> 0:05:37.159 for thirty gigawatts by so you can really see that 0:05:37.640 --> 0:05:41.320 the government is really shooting for a huge amount of growth, 0:05:41.440 --> 0:05:44.839 shooting for the stars. Yeah, you're you're going from essentially 0:05:44.960 --> 0:05:49.040 zero to thirty gigawatts. And so if we look at 0:05:49.240 --> 0:05:50.920 how it's going to grow, we're going to see a 0:05:50.960 --> 0:05:55.000 lot of the large scale installations happening from onwards. But 0:05:55.120 --> 0:05:57.680 that only gives you about six to seven years to 0:05:57.720 --> 0:06:00.719 achieve that thirty giga watt goal. And so what that 0:06:00.760 --> 0:06:03.080 means is the US has to average about five giga 0:06:03.080 --> 0:06:05.680 watts per year to meet that thirty giga watt target. 0:06:06.040 --> 0:06:08.440 But you look at some place like the UK, which 0:06:08.480 --> 0:06:10.200 is one of the most mature offshore wind markets in 0:06:10.200 --> 0:06:12.280 the world, and they have an average run rate of 0:06:12.320 --> 0:06:15.880 about three giga watts per year. So putting that into perspective, 0:06:15.920 --> 0:06:18.640 you can really see how large the school is. But 0:06:18.880 --> 0:06:21.719 that being said, even though it's quite ambitious, it really 0:06:22.080 --> 0:06:25.279 um sends a clear signal to developers that the US 0:06:25.400 --> 0:06:27.119 is in it and that they're in support of growing 0:06:27.160 --> 0:06:30.880 the market. What do you think so currently VNS is 0:06:30.920 --> 0:06:34.520 forecasting about twenty six giga watts by twenty so we 0:06:34.600 --> 0:06:36.919 do think that they will likely miss the target. But 0:06:37.040 --> 0:06:40.800 that being said, states already have set multiple offshore wind 0:06:40.800 --> 0:06:43.720 targets before the federal government did so. Looking at the 0:06:43.760 --> 0:06:47.320 big ones, New York nine giga watts by five, New 0:06:47.400 --> 0:06:50.599 Jersey seven and a half giga watts by five, and 0:06:50.640 --> 0:06:53.119 then you also have Massachusetts in North Carolina with pretty 0:06:53.160 --> 0:06:55.760 large targets. But you'll notice that these states set the 0:06:55.760 --> 0:06:59.600 targets for instead of and so while these states might 0:06:59.600 --> 0:07:02.000 achieve their targets, the federal government one is a little 0:07:02.000 --> 0:07:04.360 bit more ambitious. Do you think that will drive states 0:07:04.400 --> 0:07:06.039 to to raise their game or do you think they'll 0:07:06.040 --> 0:07:08.279 stick to the plan or do you think more states 0:07:08.279 --> 0:07:10.200 will come in. I guess there's a few more coastal 0:07:10.200 --> 0:07:13.120 states that could be candidates here. Well, I guess you 0:07:13.160 --> 0:07:15.480 could think of it kind of two fold. So one 0:07:15.680 --> 0:07:18.640 is that there's no there's no set way that a 0:07:18.760 --> 0:07:21.000 state is going to achieve their target. It might happen 0:07:21.040 --> 0:07:24.960 that New York achieves nine giga watts by two so 0:07:25.000 --> 0:07:26.840 they hit it three years earlier. It all depends on 0:07:26.880 --> 0:07:30.160 how much capacity they procure and each solicitation that they have. 0:07:30.760 --> 0:07:33.680 But then kind of thinking about the new states point 0:07:33.720 --> 0:07:36.960 that you mentioned, North Carolina recently announced their target for 0:07:37.000 --> 0:07:40.200 eight giga watts by and two point eight giga watts 0:07:40.320 --> 0:07:43.720 by twenty thirty, I believe earlier this year, and this 0:07:43.800 --> 0:07:46.400 is after states had already been announcing many of these targets. 0:07:46.400 --> 0:07:48.640 So North Carolina is a fairly new state in this respect. 0:07:49.040 --> 0:07:51.200 Then you can also pivot to looking at the west coast. 0:07:51.360 --> 0:07:54.640 So California they have a bill where they're looking to 0:07:55.320 --> 0:07:58.000 set off shore wind targets. They've walked back a few 0:07:58.080 --> 0:08:00.800 of them. Initially they were going quite big, ten gigawatts 0:08:00.960 --> 0:08:05.600 by but they walked that back and so states are 0:08:06.200 --> 0:08:10.160 definitely interested in offshore wind. New Or States especially or 0:08:10.200 --> 0:08:12.840 again also has a bill that they recently passed looking 0:08:12.880 --> 0:08:16.840 to procure three gigawatts by So you have a lot 0:08:16.840 --> 0:08:19.040 of different things, a lot of different elements in play here, 0:08:19.200 --> 0:08:22.480 but the moral of the stories that states are interested 0:08:22.480 --> 0:08:24.800 in offshore wind and they're shooting for the stars with 0:08:24.840 --> 0:08:27.320 these targets, that's amazing. I mean, like we were just 0:08:27.360 --> 0:08:30.200 commenting before we started recording that TELSA, you are an 0:08:30.200 --> 0:08:33.960 offshore wind analyst based in New York, right, and just 0:08:34.040 --> 0:08:35.760 a couple of years ago that would have been an 0:08:35.760 --> 0:08:38.560 oxymoron to have an offshore wind analysts in the US. 0:08:38.679 --> 0:08:41.640 It's it's really a testament to to where the industry 0:08:41.720 --> 0:08:43.880 is going. I think, yeah, I agree. And when you 0:08:43.880 --> 0:08:46.319 look at the history of offshore wind in the US, right, 0:08:46.360 --> 0:08:49.880 it's really plagued by false starts, delays. You think of 0:08:50.000 --> 0:08:53.200 Cape Wind, which was initially conceived in the early two 0:08:53.200 --> 0:08:57.280 thousands and went through over a decade of trying to 0:08:57.280 --> 0:09:01.800 get permits, trying to get on tracks, trying to simply 0:09:02.920 --> 0:09:05.640 get through the courts right and to get this project built, 0:09:05.920 --> 0:09:08.760 and it just didn't end up happening. But I think 0:09:08.800 --> 0:09:12.040 what's different now is that you know, states are on board, 0:09:12.160 --> 0:09:15.440 governments are on board, developers are interested in the market. 0:09:15.920 --> 0:09:18.480 The stars are kind of aligning for US offshore wind now. 0:09:18.640 --> 0:09:21.360 So it's I think it's ready to take off. Now. 0:09:21.960 --> 0:09:24.160 The history is sad, but you know, I think it's 0:09:24.200 --> 0:09:27.120 kind of like a redemption story for US offshore wind, 0:09:27.160 --> 0:09:30.640 and you know, I'm ready. I'm excited to see what happens. Well, 0:09:30.640 --> 0:09:33.000 there you go, that's all you need. Let's talk a 0:09:33.040 --> 0:09:34.880 bit about how this is going to get done before 0:09:34.880 --> 0:09:36.960 we get into any other markets. I want to stick 0:09:37.000 --> 0:09:40.199 on the US for just a second. So Charles Barkley 0:09:40.240 --> 0:09:42.640 always says this thing, no free pub you know, no 0:09:42.800 --> 0:09:46.360 free publicity. There's this really fantastic podcast I've been listening 0:09:46.400 --> 0:09:49.840 to lately called Windfall from Outside in from what New 0:09:49.840 --> 0:09:52.320 Hampshire Public Media. They do a great job. They did 0:09:52.320 --> 0:09:55.640 a deep dive on Cape wind, you know, and who 0:09:55.720 --> 0:09:59.360 stands to gain and and not from from offshore wind 0:09:59.360 --> 0:10:04.240 in the US. And one thing that they talked about 0:10:04.640 --> 0:10:08.880 was how this market will be supplied so that most 0:10:08.920 --> 0:10:11.520 of the you know, developers for these initial projects are 0:10:11.559 --> 0:10:14.080 coming over from Denmark. Some of the ships you know 0:10:14.120 --> 0:10:17.040 that they're coming over to do the installations are also 0:10:17.440 --> 0:10:20.720 going to be coming from Denmark. Two questions, is the 0:10:20.760 --> 0:10:25.760 industry globally big enough to support these ambitions in the 0:10:25.840 --> 0:10:29.240 US and elsewhere? And second, if the ships are going 0:10:29.280 --> 0:10:34.000 to come over from Europe to supply US projects on 0:10:34.040 --> 0:10:36.319 the East coast, who's going to supply the ones in 0:10:36.360 --> 0:10:39.040 the West Coast? Are they going to be able to reach, 0:10:39.320 --> 0:10:42.000 you know, and and go through the I guess the 0:10:42.000 --> 0:10:43.760 Panamenna Canal or I don't know how how is that 0:10:43.800 --> 0:10:46.400 going to work? Mark? You touched on a really interesting point, 0:10:46.559 --> 0:10:48.360 and I think that's something that a lot of people 0:10:48.360 --> 0:10:52.440 in the industry are curious about right now. So with 0:10:52.520 --> 0:10:55.120 the US supply chain question, there's going to need to 0:10:55.120 --> 0:10:57.960 be massive build out, right, Like we imagine talked about 0:10:58.000 --> 0:11:00.520 the massive growth that we're expecting. In order to realize that, 0:11:00.559 --> 0:11:02.640 you have to have a supply chain to make that happen. 0:11:03.120 --> 0:11:05.760 And so, for example, let's let's look at this shipping question. 0:11:06.240 --> 0:11:08.400 So right now, there are already a lot of US 0:11:08.520 --> 0:11:11.320 ports that are being developed to support the growing offshore 0:11:11.360 --> 0:11:15.560 wind industry. And in the US there's also an interesting 0:11:15.559 --> 0:11:18.480 tidbit called the Jones Act, which essentially means that if 0:11:18.480 --> 0:11:21.240 you're traveling between any two points in the US, that 0:11:21.360 --> 0:11:24.640 ship needs to be U S crewed, US flag, US owned, 0:11:24.760 --> 0:11:28.120 US built, and so that adds a whole other dimension 0:11:28.160 --> 0:11:32.080 to the U S story. So there's already a wind 0:11:32.080 --> 0:11:35.640 turbine installation vessel being built by Dominion that's going to 0:11:35.640 --> 0:11:37.880 be used in the first couple of oshore wind projects 0:11:37.920 --> 0:11:40.719 in the US. But even then, you know, as all 0:11:40.720 --> 0:11:43.040 of these projects start cropping up, and then you have 0:11:43.240 --> 0:11:46.599 the European ships that that also need to build projects, 0:11:46.640 --> 0:11:50.240 there's going to be a squeeze in resources that we 0:11:50.280 --> 0:11:53.319 still need to address in terms of the East Coast 0:11:53.400 --> 0:11:56.040 VERSUS West Coast question. You know, I think that's that's 0:11:56.080 --> 0:11:58.480 still up for debate. It's still up for grabs, especially 0:11:58.520 --> 0:12:00.720 when you start to think about places like YI that 0:12:00.840 --> 0:12:04.559 already has some interesting offshore wind areas that the Bureau 0:12:04.600 --> 0:12:07.880 of Ocean Energy Management has identified. How are they going 0:12:07.920 --> 0:12:10.440 to build off shore wind They're very very far out 0:12:10.520 --> 0:12:13.920 from the US mainland, but also any other any other place, 0:12:14.320 --> 0:12:16.520 So that that brings up another interesting question for a 0:12:16.520 --> 0:12:20.040 supply chain. So that really seems like an opportunity on 0:12:20.040 --> 0:12:22.880 one angle and also a squeeze on the other You know, 0:12:22.920 --> 0:12:25.839 the President Biden said, what a couple of weeks ago, 0:12:25.880 --> 0:12:27.800 there no reason a wind turbine couldn't be made in 0:12:27.800 --> 0:12:30.800 Pittsburgh instead of Beijing, right, is are we seeing that 0:12:30.840 --> 0:12:35.440 to our US developers stepping up for their market or 0:12:35.760 --> 0:12:39.360 are we seeing Japanese developers stepping up for the Japanese market? 0:12:39.400 --> 0:12:42.000 You know, how's the who's winning and supply or who's 0:12:42.000 --> 0:12:43.880 stepped to win and supply? Yeah, I guess speaking a 0:12:43.920 --> 0:12:46.360 little bit more about the U S angle, developers are 0:12:46.440 --> 0:12:50.520 committing to local jobs, local manufacturing. So there's a monopile 0:12:50.600 --> 0:12:53.280 factory that's being built in New Jersey. I believe what's 0:12:53.280 --> 0:12:57.000 a monopile factory? Sorry, oh yep, let me backtrack. So 0:12:57.160 --> 0:12:59.920 when we talk about off shore wind going to star 0:13:00.000 --> 0:13:02.880 it that over. When we talk about offshore wind, there's 0:13:03.000 --> 0:13:07.239 two types of foundations, bottom fixed as well as floating foundations. 0:13:07.559 --> 0:13:11.280 And for bottom fixed foundations, one of the most widely 0:13:11.360 --> 0:13:14.240 used ones is the monopile. So think of the turbine 0:13:14.360 --> 0:13:17.720 being connected to a connector piece known as the transition piece, 0:13:18.040 --> 0:13:20.800 and then connected to the monopile, which is essentially the 0:13:20.840 --> 0:13:23.520 long foundation think of it as like a long pole 0:13:23.920 --> 0:13:27.839 that's then hammered into the sea floor. So in that case, 0:13:28.000 --> 0:13:31.679 the monopile factory would be built in New Jersey, as 0:13:31.679 --> 0:13:34.480 I mentioned. And then there's also a steel factory that 0:13:34.559 --> 0:13:37.600 was recently announced by um U s Wind, who is 0:13:37.600 --> 0:13:40.280 a developer that's planning on building a project off the 0:13:40.280 --> 0:13:44.199 coast of Maryland. So to answer your question, yes, there's 0:13:44.280 --> 0:13:46.480 there are some elements that will be built in the US, 0:13:46.559 --> 0:13:48.560 but again it's still has to be built out widely, 0:13:48.920 --> 0:13:51.320 and the earlier projects will likely depend a lot on 0:13:51.559 --> 0:13:55.560 European manufacturing and supply chain. The ships have to take 0:13:55.600 --> 0:13:58.000 as long as the projects themselves. I assume are there 0:13:58.080 --> 0:14:03.000 enough ships to install all of these projects globally. Well, again, 0:14:03.080 --> 0:14:05.800 it's another interesting point, and I think I'll pivot to 0:14:05.840 --> 0:14:07.880 image and who maybe might know a little bit more. Sorry, 0:14:07.920 --> 0:14:09.640 I'm just I'm just going down a rabbit hole here. 0:14:09.720 --> 0:14:12.600 This is this is fascinating guys. Sorry. So the biggest 0:14:12.600 --> 0:14:14.920 problem with the ships is that they're not big enough 0:14:15.200 --> 0:14:20.560 to install the latest, greatest, biggest turbines that are hitting 0:14:20.560 --> 0:14:24.240 like fifteen megawats, right, something like that, Exactly when they 0:14:24.320 --> 0:14:27.240 hit fifteen megawats. The big thing is they get much taller. 0:14:27.480 --> 0:14:30.160 So in order to install them, in order to lift 0:14:30.160 --> 0:14:32.280 them on top of that monopile piece that Chelsea was 0:14:32.320 --> 0:14:34.880 talking about, you have to have this big crane that 0:14:35.000 --> 0:14:38.480 does it. And the ships today essentially are not big 0:14:38.600 --> 0:14:41.640 enough to lift them high enough to actually get them 0:14:41.680 --> 0:14:47.200 on top. Okay, so the upshot is so the upshot 0:14:47.280 --> 0:14:50.120 is we need to build more ships, but more more 0:14:50.160 --> 0:14:52.120 fun ships too. I don't know if you if you've 0:14:52.120 --> 0:14:54.600 seen these ships, they're definitely worth googling. They look like 0:14:54.680 --> 0:14:56.640 kind of like robots that are stuck in the water. 0:14:57.000 --> 0:14:59.840 The way they operate is that they sail out to 0:15:00.000 --> 0:15:03.000 sites with their legs kind of stuck on the bow, 0:15:03.600 --> 0:15:05.880 and I get to the project site, they put their 0:15:05.960 --> 0:15:08.120 legs and then pushed them down and put them in 0:15:08.160 --> 0:15:10.080 the seabed, and then they jack up the bow of 0:15:10.120 --> 0:15:11.560 the ship so that they're kind of like a stable 0:15:11.640 --> 0:15:14.520 letting playing field for the ship, and they lift the 0:15:14.520 --> 0:15:18.720 turbine tower on top of the foundation piece. Wow, have 0:15:18.840 --> 0:15:21.120 you seen this? Have you? Have you gone out and 0:15:21.400 --> 0:15:23.960 you know, watched this happen in person? In my next 0:15:24.000 --> 0:15:26.080 life mark in your next life, man, you should go 0:15:26.120 --> 0:15:28.360 do it. I mean back when I was I used 0:15:28.360 --> 0:15:30.240 to be a geo thermal analyst and there's just so 0:15:30.320 --> 0:15:32.520 much value in going out to the actual sites and 0:15:32.560 --> 0:15:37.280 seeing them build the thing. Anyway, for another day, Um, 0:15:37.360 --> 0:15:39.480 and we'll do a podcast on location. How about that. 0:15:39.560 --> 0:15:42.160 Let's do that. It sounds good. Let's talk about who's 0:15:42.200 --> 0:15:46.080 who's paying for all this for a second, so you know, 0:15:46.040 --> 0:15:48.440 I any reference to earlier, but again, August two, we 0:15:48.480 --> 0:15:53.560 did a show energy Transition Fund Frenzy, and in it 0:15:53.840 --> 0:15:56.400 we talked about how, you know, there's been thirty billion 0:15:56.520 --> 0:15:59.120 raised in the past couple of months for renewable energy 0:15:59.160 --> 0:16:02.360 or transition fund raised by asset managers right to invest 0:16:02.440 --> 0:16:07.280 in renewable energy projects really kind of specifically. And my 0:16:07.400 --> 0:16:09.560 question is, first, you know, do they have an appetite 0:16:09.600 --> 0:16:12.600 for offshore wind or is it just onshore? And if not, 0:16:12.800 --> 0:16:15.920 you know who is paying for these these offshore wind projects? Yeah. 0:16:16.000 --> 0:16:18.080 So offshore wind, I think is a funny one because 0:16:18.120 --> 0:16:21.400 it hasn't been around for that long and it's still, 0:16:21.440 --> 0:16:25.440 in many eyes, a relatively risky asset class for many people. 0:16:25.960 --> 0:16:29.920 So having said that, the industry is maturing and we're 0:16:29.960 --> 0:16:32.040 seeing more and more projects get built, So those kind 0:16:32.040 --> 0:16:35.440 of risks are essentially being taken away, and so we're 0:16:35.440 --> 0:16:39.040 starting to see the spectrum of investors that are coming 0:16:39.040 --> 0:16:43.200 into the industry broaden. Traditionally it used to be kind 0:16:43.200 --> 0:16:46.480 of closed club of critique players, your likes of Asted 0:16:46.520 --> 0:16:48.960 for example, who kind of took hold of the industry. 0:16:49.600 --> 0:16:52.400 Now we're seeing it kind of broadened out, and we're 0:16:52.400 --> 0:16:54.680 starting to see new players like all in Gas come 0:16:54.720 --> 0:16:57.840 into the sector and start investing the projects. So are 0:16:57.840 --> 0:17:01.160 these mostly going to be done on balance sheets rather 0:17:01.240 --> 0:17:04.480 than you know, somebody coming in and providing debt or 0:17:04.800 --> 0:17:07.720 equity to these projects, because I imagine BP is just 0:17:07.760 --> 0:17:10.280 going to pay for you know themselves or Equino or whatever. Right, 0:17:10.560 --> 0:17:12.399 I think it will still be a combination actually of 0:17:12.400 --> 0:17:15.760 the two. So when we do outlooks, we kind of 0:17:15.840 --> 0:17:19.160 look at the split between project finance and balance sheet finance, 0:17:19.480 --> 0:17:21.679 and project finance is taking more of the more of 0:17:21.720 --> 0:17:23.560 the pie as we go forward, but I think balance 0:17:23.560 --> 0:17:25.320 sheet finance will still be part of it, particularly as 0:17:25.359 --> 0:17:27.199 you've mentioned with these big players that are starting to 0:17:27.240 --> 0:17:28.800 come in that can from them. Can you talk about 0:17:28.840 --> 0:17:30.720 that just for a second. I mean, one thing to 0:17:30.800 --> 0:17:32.920 just caught my eye, I was looking at where was 0:17:32.960 --> 0:17:35.440 I linked in, and I just saw a post from 0:17:35.880 --> 0:17:37.720 a former colleague that just said, Hey, we're hiring a 0:17:37.760 --> 0:17:41.600 hundred people for offshore wind at BP. Come come join us. 0:17:41.640 --> 0:17:43.280 You know, as it go out, that's that's quite a 0:17:43.280 --> 0:17:46.680 bit in one chunk, and my thoughts went to, well, 0:17:46.720 --> 0:17:48.359 they must be doing that to compete with what the 0:17:48.400 --> 0:17:51.640 Norwegians with Equinora, right, is that right? Or what's going 0:17:51.640 --> 0:17:53.600 on with these oil and gas players getting into this 0:17:53.640 --> 0:17:56.560 market specifically? Well, BP is a funny one because it's 0:17:56.560 --> 0:17:59.680 actually partnered up with Equino, so I guess particularly in 0:17:59.680 --> 0:18:03.560 the US, so it's uh, maybe not as much a yeah, 0:18:03.680 --> 0:18:07.360 a foe as a friend. But I think the whole 0:18:07.359 --> 0:18:09.679 transition of these oil and gas guys coming into offshore 0:18:09.680 --> 0:18:12.720 wind is the fact that they under pressure from shareholders 0:18:12.760 --> 0:18:15.160 to kind of realign businesses right and invest a lot 0:18:15.200 --> 0:18:17.520 more in renewables, and they see offshore wind as a 0:18:17.520 --> 0:18:20.080 really attractive way of doing that because, as I touched 0:18:20.080 --> 0:18:23.639 on before, offshore wind brings scale, so you can buy 0:18:24.200 --> 0:18:27.080 large scale projects or invest in large scale projects, which 0:18:27.080 --> 0:18:29.560 brings gigga watts into your portfolio. So if you've got 0:18:29.560 --> 0:18:34.080 a giggle wat target like BP of fifty gigawatts. By 0:18:34.119 --> 0:18:37.040 by developing gigga wat scale assets, you can kind of 0:18:37.080 --> 0:18:40.480 accumulate them quite quickly. Yeah. I'll also just add that 0:18:40.560 --> 0:18:44.359 there's often an element of knowledge sharing that oil and 0:18:44.400 --> 0:18:47.240 gas companies like to talk about. So if you look 0:18:47.240 --> 0:18:50.360 at building an offshore oil and gas rig, a lot 0:18:50.400 --> 0:18:53.000 of oil and gas companies see that as an opportunity 0:18:53.080 --> 0:18:56.080 to leverage knowledge that they've learned there in the offshore 0:18:56.080 --> 0:18:58.640 wind industry. And if you look at the eighty eight 0:18:58.640 --> 0:19:02.399 megawatt high wind camping project that's being built off of 0:19:02.440 --> 0:19:06.080 Norway right now by equinor those offshore wind turbines are 0:19:06.119 --> 0:19:08.960 actually being used to power an offshore oil and gas rig. 0:19:09.400 --> 0:19:11.840 So that's an interesting tibit there that I think that 0:19:11.920 --> 0:19:16.000 oil and gas companies also see an opportunity. Okay, that 0:19:16.040 --> 0:19:18.520 makes sense. Okay, let's close up this section and just 0:19:18.560 --> 0:19:22.080 say like, okay, I just want your take. So, given 0:19:22.119 --> 0:19:24.359 what we've talked about, you know that we're saying like 0:19:24.400 --> 0:19:27.000 the industry has all these targets, you know, and growth, 0:19:27.040 --> 0:19:30.960 ambitious growth plans, all this stuff, but there's also it 0:19:31.119 --> 0:19:33.560 seems to be potential shortage to supply. I don't know, 0:19:34.359 --> 0:19:36.280 what do you think. Do you think this is this 0:19:36.359 --> 0:19:37.960 is a fad? Do you think it's here to stay? 0:19:38.000 --> 0:19:40.400 Do you think this growth is sustainable? Do you think 0:19:40.800 --> 0:19:43.840 you know these markets can reach the stars as they're 0:19:43.840 --> 0:19:45.720 as they're trying to do. Yeah, I think it's I 0:19:45.760 --> 0:19:48.600 think it's his to stay. I think we're seeing a 0:19:48.600 --> 0:19:51.560 lot of ambition from government pivot towards offshore wind, which 0:19:51.640 --> 0:19:54.600 is really exciting for the sector. At the same time, 0:19:55.560 --> 0:19:57.119 when we talk about think about just a number of 0:19:57.119 --> 0:20:00.800