Offshore wind and cold ironing: the varying approaches of China and the US

The Chinese National Bureau of Statistics released energy data this week which showed a significant, 19% rise in wind-generated electricity in the year to August 2020.

After removing subsidies from solar power last year, the Chinese government is instead presiding over a big increase in wind power, with ambitions to grow offshore wind power from 200 gigaWatts in 2019 to 400 gW by 2030 and 1,000 gW by 2050.

But China’s efforts to grow offshore wind farm installations is being held back by a lack of wind turbine installation ships, according to Shanghai Electric, a manufacturer of wind turbines and one of China’s “500 most valuable brands.”

Data from IHS-Markit reveals that only three offshore jack-up construction vessels are currently on order for delivery after 2020, one each being scheduled from China, South Korea and Japan, all in 2022.  Deliveries of this type of vessel have been falling from a peak of 19 vessels in 2016 to just seven in 2020.

Historically, the US has built the largest number of jack-up offshore construction vessels but these have generally been used for oil and gas installations. Still, wind farm installation vessel activity there is set to grow, albeit from a low base.

The American Wind Energy Association, in its September 2020 industry Status Update, reports that the first US offshore wind farm, the 30 mW Block Island Wind Farm off the New Jersey Coast, will be joined by the 12 mW Coastal Virginia Offshore pilot project by the end of 2020, with 14 offshore wind projects totalling 9,112 mW to be operational by 2026.

The AWEA says that “With stable policies in place, the Department of Energy found the US could develop a total of 86 GW of offshore wind projects by 2050.”

Offshore wind has become an essential part of decarbonising shipping because of its renewable contribution to electricity grids from which ports draw their power. Ships calling at the ports cold-iron, drawing renewably sourced electricity from the port, to run auxiliary power onboard, allowing the ships’ diesel generators to be switched off.

A Capesize bulk carrier, post-Panamax containership or VLCC will burn two tonnes a day or more of gasoil in port to power generators providing electricity for equipment throughout the ship. As hundreds of these ships perform operations in port limits every day, there is an opportunity to cut thousands of tonnes of CO2 emissions every day by switching to cold-ironing. If the electricity comes from renewable generators, the benefit is doubled.

In China, terminals in Shenzhen and Shanghai as well as the Kai Tak Cruise Terminal in Hong Kong already provide some cold ironing facilities, but the electricity itself is more likely to come from the coal-dominated power grid than from specific renewable sources.

In the US, the Port of Los Angeles opened the West Basin Container Terminal in 2004, the first container terminal in the world to offer cold ironing. In August that year, the containership NYK Atlas, the world’s first container ship built with cold ironing specifications, called at the terminal for the first time. By 2014, half of all ships calling at PLA were cold-ironing.

In August 2020 the California Air Resources Board updated cold ironing regulations to oblige auto carriers and oil tankers calling at California ports to cold-iron from January 2023, adding them to containerships, reefers and cruise ships already covered by regulation. CARB believes this update to the regulations will cut pollution by 90 per cent from an extra 2,300 port visits a year.

And in the last few weeks, US fuel cell manufacturer Ballard Power Systems (NASDAQ: BLDP) announced the launch of a 200 kW fuel cell that can be scaled up to provide cold-ironing for ships in port (see our report here).

Meanwhile, the nascent US offshore wind farm industry will require the construction of tens of Jones Act compliant offshore construction ships. The opportunity exists for these ships themselves to be test beds for alternative non-hydrocarbon propulsion systems.

Dominion Energy, developing the Coastal Virginia Offshore Wind project, is building the first Jones Act compliant offshore wind installation vessel, due to enter service in the Hampton Roads by the end of 2023. Meanwhile the American Bureau of Shipping has granted approval a new ultra-efficient windfarm service vessel designed by Vard Marine Houston. 

Darren Truelock, Vice President at Vard, says, ‘We believe that the US Offshore Wind market holds several promising opportunities for US owners, designers & shipbuilders. The US market seems to be moving quickly starting on the East Coast, so a purpose-built US Offshore Wind Jones Act fleet is inevitable.’

Mark Williams

Mark Williams