Wind turbine installation vessel Reprieve or a debt trap for Scorpio Bulkers?
Wind turbine installation vessel (WTIV): A new business ventureOn 3 August 2020, Scorpio Bulkers (SALT) announced the signing of a Letter of Intent (LOI) to construct a wind turbine installation vessel
(WTIV), due for delivery in 2023 with the option for up to three additional vessels. The total cost of the project is expected to be in the
range of USD 265-290 mn, subject to final design specifications. Based on the preliminary information, the 148-meter long vessel would
run on hybrid-battery power and will be fuel cell ready.
Given the embryonic stage of the sector, there is a shortage of WTIV vessels capable of installing large turbines in deep waters. SALT has
claimed that at least 10 more vessels will be needed by 2024 to meet the global demand. At present, the contract rates for such vessels
is as high as USD 220,000pd, thereby providing their operators with ample cash flows and liquidity.
At present, there are 7,233 offshore turbines installed around the globe. Based on IEA forecasts, this number, however, is expected to
skyrocket to 26,900 by 2030. On the other hand, the other factor, the turbine sizes are also expected to increase. Based on a report by
Global Wind Energy Council (GWEC), in 2010, the largest commercially available wind turbine was 90 meters with capacity of 3MW. In
2021, there are expectations of a turbine as big as 220 meters, with generation capacity of 12MW. Technological advancements coupled
with cheap cost of wind turbines are the key drivers of this sector.
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