00:09 Michael Gaines: Hello and welcome to NOV Today; I'm your host Michael Gaines. Located in a converted industrial building in one of the Netherlands' shipyards in Schiedam is a building with the name GustoMSC standing proudly atop the roof. Having been acquired by NOV in 2018, the GustoMSC name is one with deep maritime roots dating back to 1862 with their creation of an iron foundry, producing steel structures, dredging equipment, and cranes. Fast forward more than 150 years and the list of GustoMSC accomplishments and engineering contributions to the energy world pay tribute to the truly innovative spirit of this team. Those achievements span decades of innovation, from the development of the first floating crane in 1908 to the first European designed and built jackup named the SeaShell in 1959, to the design of the CP-8001—the first and largest DP2 jackup built in Japan for Japanese offshore wind and civil construction projects. The ability to provide this level of innovation, design, support, and, frankly, creative engineering requires people who embody the same kind of traits themselves. On this episode of NOV Today, we talk with two people who are helping continue the GustoMSC legacy. Here's our conversation.
01:50 Michael Gaines: Okay, this is NOV Today and I am Michael Gaines. And I am in, not Houston, I am in the Netherlands, in Schiedam?
02:06 Andries Hofman: Schiedam.
02:07 Michael Gaines: Schiedam okay, thank you. Yeah. Yeah. I just... Yeah, there you go. So, I am in Schiedam in the Netherlands, and I am visiting the GustoMSC facility here and the office and getting to talk to several people in the area. And I have a couple of gentlemen here who have graciously carved out some of their time to share their perspective on GustoMSC as well as what it means to them and a little bit about their background. So, can you tell me your name and your title?
02:46 Andries Hofman: Yep. My name is Andries Hofman, pronounced in Dutch. I have a background in offshore engineering from TU Delft. I started working in 2001 with GustoMSC, and ever since I stayed with the company. Most of the time I'm working in the renewable sector, which means that I'm making designs which install, for example, wind turbines in sea. I've done also several oil and gas projects in the past, but, last few years, predominantly I've been designing jackups for renewables.
03:26 Michael Gaines: Okay, great. And Thomas.
03:29 Thomas Lerchenmüller: Yeah, I'm Thomas Lerchenmüller. I'm what we call the design manager for construction jackups, what we just talked about before. It's all the jackups with more than three legs, we say, and, the same as Andries, I'm designing them. Next to that, I'm coordinating the sale support efforts. So if our sales managers go outside and they need some more technical assistance, we both assist them on that side, and we are really in charge of developing all the concepts. Background to me is similar to Andries' background; I'm a naval architect with a structural major, if you wish. I'm with the company already also since 2004, so ever since my graduation. Actually graduated at GustoMSC, did my master thesis here, so stuck around afterwards.
04:17 Michael Gaines: Oh wow, yeah. Wow.
04:19 Thomas Lerchenmüller: We start to become fossils here.
04:21 Andries Hofman: Yeah. We started to, we do yeah.
04:24 Michael Gaines: Well, it's not a bad thing, it's not a bad thing at all. It's a lot of experience.
04:27 Andries Hofman: Yeah, definitely I think for both of us, it applies that we were in this industry quite early. And we can simply say that for offshore wind, it started round about 2001 for us as a company. And we were involved in one of the first purpose-built jackups for offshore wind installation. And ever since we started to take more market share and brought in our own ideas and our own expertise. So, from the start we took a nice position and we have been able to maintain and build on that.
05:00 Thomas Lerchenmüller: Yeah, we indeed... We grew up sort of together with the industry, and that is I think one of the interesting things. So, we are on one side pioneering and learning, but on the other hand also just growing up with the industry together, so that's...
05:12 Andries Hofman: I think it's quite nice if you look a little bit back into the history of offshore oil and gas—now that's an industry that is much more mature than offshore wind. Offshore wind is a relatively young industry. So, as I just mentioned, in 2001 we were working on the first purpose-built jackup for offshore wind, and little by little this market has been growing. And the wind turbines that are being put in sea, they have been growing very much in size, in weights, in heights, but also the number of companies and people involved. It has been growing enormously. And I think at least that applies to me; by the time we started, we just got a request to give some engineering assistance and come up with a jacking system for a big jackup. But everybody was looking at this industry like, "Why would they put wind turbines at sea?" It's a very small industry, and then for a couple of years there was almost no work in this industry, but I think from 2006, '07, no '08 on, certainly it started to be a very busy industry, with many more players entering the market, and we certainly got ourselves a lot of work in this market.
06:28 Thomas Lerchenmüller: Now, what's really interesting, what Andries is referring to is that, it is on one hand comparable to the oil and gas offshore industry. So they took some things from the oil and gas industry, but on the other hand they also, yeah, in the sense reinvented the wheel with a couple of things. But that's, in a sense, also was important because the requirements for installing wind turbines offshore are different than the requirements that you have when you are drilling for oil or gas.
06:55 Michael Gaines: Yeah, I'm interested to know some of those, 'cause I'm looking, so there's a mural here on the wall. I think it's the Kraken. And so I'm looking at it and I first and foremost do not try to sell myself as an expert in naval architecture and vessels. But when I look very quickly and say, "Okay, well, I see a drillship or a jackup," and then I might see this vessel, and it seems that there are some things that might be similar but there might be others that aren't, and I know it's not that simple.
07:35 Thomas Lerchenmüller: No. Yeah, one of the main things that's actually very funny because the Kraken was my first project that I was involved in the self-propelled jackups. And actually, this jackup itself is what we call a multipurpose jackup, so this is actually used in the oil and gas industry for, at this mural, for example, it's alongside a fixed platform and doing well servicing. So that is oil and gas related, but that same jackup also installs wind turbines. So that's one of the units that is used for both or was used for both in the past as a multipurpose unit, but nowadays we see that more of these units are really purpose built and more examples that they're really dedicated for wind turbine installation or foundation installation. And this one is more of a multipurpose unit, it's smaller. But one of the main differences that you might see between a drilling jackup and a wind turbine installation jackup, if you wish, is that the frequency of moving the jackup from one location to the other is a lot higher. A wind turbine typically nowadays takes 24 hours to install, something like that.
08:46 Andries Hofman: Yeah. Between 24 or 36 hours.
08:47 Thomas Lerchenmüller: Yeah, 24, 36 hours, depends a little bit on the weather. So if the weather is good, you can install a whole wind turbine with powers, and cells, blades, and everything in 24 hours. So you're on location maybe 24 hours plus/minus a little bit and then you move to the next location, and the drilling jackup is on one location maybe for half a year or maybe for a year if they do a big campaign on drilling, maybe even longer. And so one of the things that drives the design is the number of location moves, and that's in a lot of ways, you want to make sure that the jackup is designed for the fact that it is able to relocate fast and efficiently. So that is both regarding to its own propulsion. For example, a lot of these jackups have their own propulsion, their own positioning system with a DP system. That is one thing. But also to be able to preload very fast, and that is a little bit more on the technical side, but you are preloading the legs. And with a three-legged unit, you always have to take on a lot of water ballasts, which takes a lot of time. And with four legs, you can diagonally load, unload two legs, and that means that you can load the other two, and that is done really quickly at just a switch of the joystick.
09:57 Andries Hofman: Maybe we need to take one step back. Why do we use a jackup for wind turbine installation anyhow?
10:02 Thomas Lerchenmüller: Yeah, that is maybe even more intriguing. Now even the idea, the first question... No, it's actually the same thing, the same thing as what you do with drilling, yeah? You want to have a stable platform offshore. That is the main thing. But with oil and gas, it's taking longer. You can stay there for a year or so, and with wind you have to move every other day. And that is really the biggest difference between the two.
10:21 Andries Hofman: I think maybe it's very easy to explain. Installing wind turbines on land, you just put up a big pole, maybe 80 to 100 meters high in the air, and there you try to install a generator and maybe fix some blades into a halter. If you want to do that at sea, at 100 meters height, and you have a moving vessel, well, everything will be moving too much at 100 meters height if you just roll a little bit. At a 100 meters height, you'll move a lot, and then it becomes impossible to install a wind turbine. So we want to have, indeed, a stable platform. We always say the table must be stable, then you put a big crane on there and then you can safely work at 100 meters above sea level. So that's the reason why we have a jackup. You just move to a location, you sail to a location on your own propulsion, and then get out of the water to become a stable table, and then you can use a crane safety to work at 100 meters or more than a 100 meters above seawater level.
11:24 Michael Gaines: So what kind of water depth are these vessels typically operating in?
11:32 Thomas Lerchenmüller: That is driven by the water depth that the turbines are... wind turbines are installed. And these turbines that we're talking about are turbines that are put on the ground, and so either with a monopile foundations, so a pile really hammered into the ground and then put on top of that or a tripod, or a...
11:49 Andries Hofman: A small jacket.
11:49 Thomas Lerchenmüller: A jacket structure. But typically the water depths, they range from anywhere around 10 meters of water depth to, and... they're talking at the moment, probably the maximum water depths that things are installed are 45, 50 meters, but it goes further to about 65 meters and then, around that water depth, people think that it will change into floating wind turbine structures.
12:13 Michael Gaines: Yeah so you jumped to where I was sort of thinking and I know you've sort of lightly talked about the... a little bit about the history, some of the technology, but similarly to drilling, where they're wanting to drill deeper and further in laterals, it sounds like, to your point, that you're now experiencing the same except in terms of maybe water depth and those characteristics. So now they're saying, "Well, I want to go out further and deeper." So where do you... How do you handle that? 'Cause I'm sure the dynamics of...
12:46 Andries Hofman: Yeah, I think we think we have three.
12:48 Thomas Lerchenmüller: Yeah, three challenges.
12:49 Michael Gaines: Yeah.
12:49 Andries Hofman: No, that's good.
12:50 Thomas Lerchenmüller: Go ahead, Andries.
12:50 Andries Hofman: One is the water depth.
12:52 Thomas Lerchenmüller: Yeah.
12:52 Andries Hofman: And I think Thomas addressed that, and we're of course looking at the low-hanging fruit first, so when there are locations where we can install turbines near the coastline, we will. Of course, some people don't like it. They don't want to see them in their backyard, as we speak. So, there is an incentive to put them a little bit further out. But of course, there must be infrastructure in place to get the power back to shore. So, there's always this.
13:19 Michael Gaines: This tradeoff or balance.
13:20 Andries Hofman: Tradeoff. Once you get further offshore, normally it gets steeper. So, we try to be relatively near shore. So one of the challenges is water depth because when it gets deeper, the water, the foundations get bigger, get heavier, and get more expensive and rapidly they get more expensive. If they get deeper, also the foundations get heavier. That's the second challenge. In the early days of offshore wind we were installing wind turbines, so wind turbine foundations of 200 to 300 tons, and now we are talking about foundations of 1,500 to 2,000 tons.
14:00 Michael Gaines: So, I understand the increase in weight, but why is that a challenge?
14:06 Andries Hofman: Well, it is all about the cranes that install them. And I think there's a similar, or there's a comparison to be made to the offshore oil and gas industry, where in the early days, integrated modules were being lifted by the heavy-crane vessels and actually the large, large capacity lift up to 14,000 tons. And, it's more or less the maximum that we have seen in the industry because the biggest crane vessels cannot handle anything heavier. We see a similar process in offshore wind. The foundations get heavier, but there are no jackups that can install these heavy foundations anymore.
14:43 Thomas Lerchenmüller: Yeah. And adding to that, because water depth is one thing that is driving also the weight of the foundations, but the other thing that is maybe even a bigger driver is the size of the turbines. Because we started off with one and a half, two megawatt turbines and within 10 years now, we went from this type of turbines, one or two megawatts, we are now actually in place or being built are nine, nine and half megawatt turbines already. And we're talking about 12 megawatt turbines. We're talking about 15, maybe 20 megawatt turbines, and the development is quite exponential actually in size. And not only size, but because they're also becoming bigger, the weight of all the components becomes bigger as well. So what you have to do is you... That is the big challenge of the wind turbine installation vessels, next to water depth is lifting height. So you have to lift components very high up, because the bigger the turbine gets the higher you have to lift the components, but also these components become heavier.
15:45 Thomas Lerchenmüller: So, you have to lift very, very heavy components very, very high. And the combination of the heights, so the heights you're talking about now is maybe 140 to 150 meters above the waterline, and weights you're talking about that you have to lift, for example in the cell, will weigh about a 1,000 tons. So, you have to lift a 1,000 tons weight offshore, in an offshore environment, 140 to 150 meters above the water line. That is, maybe even the bigger challenges than the foundations, is that because it's a combination of height and weight, and that is really a big issue that...
16:29 Andries Hofman: I agree, I agree all the way. And, actually this big challenge for the height combined with weight. This is also driven the developments that we've seen in the last 10 years. So cranes getting bigger, more out of the standard range of cranes. So, all developers that are involved in this industry have had to come up with new models, new technologies. So this was quite an exciting area to work in.
16:55 Michael Gaines: Yeah, and I'm sure... As you both were talking and you're talking about height and weight, and so the junior engineer in my mind, the wannabe engineer, is now plotting this on an X-Y plot. And, I'm wondering to myself, is there a point to which, I'm trying to go up into the right, is there a point of demarcation where from a size standpoint you say, "This is a dotted line?" And now I've got to, good to your point, go back to the technology.
17:26 Thomas Lerchenmüller: Very, very interesting. And I think one of the things that you have to put into that X-Y graph, that we didn't talk about yet, is cost.
17:35 Michael Gaines: Oh, okay.
17:36 Thomas Lerchenmüller: Because one of the things that is very important, and we think actually it's quite good but it also puts pressure on everything, is that in the early days or actually til a couple of years ago, all the wind farms were heavily subsidized, especially in Europe. The financing of the wind farms were really heavily subsidized. And that went down more and more in the last couple of years. There is actually the first couple of wind parks now that are fully unsubsidized or financed, just...
18:03 Andries Hofman: Zero subsidy.
18:04 Thomas Lerchenmüller: Zero-subsidy parks, but that makes the pressure on the cost of installation vessels, but also cost of fabrication, but also cost of installation. So, also of installation vessels. The pressure on this, reducing this cost, is quite high. So, you actually have to have a very heavy component, very high up in the air, for as little as possible costs please.
18:27 Michael Gaines: Yeah.
18:27 Thomas Lerchenmüller: And that combination is important. And also looking at efficiencies, so logistics, how many turbines does a vessel have to carry? Because if you have a vessel that has to carry four of the biggest turbines that we can think of now, that vessel is a lot, lot bigger than a vessel that can carry eight of the moderate-size turbines that are in the market now. Probably about twice the size. And so, that all plays together. And, that also is a big challenge. And where that line, where you say that horizon is, is really the question. And what we see now is actually, that we start to get into situations where, and that's actually also why the market at the moment is a little bit slow with developing, is that a lot of operators, they are holding on their investment, because you have to imagine these are hundreds of millions of investment into a jackup, for example, or a vessel.
19:27 Thomas Lerchenmüller: And then maybe they find out 2 years or 3 years from now that what they bought, actually, the crane capacity is just too small because the development in the next 5 or 10 years goes even faster than they anticipated. So, they have an investment that they're... pretty much had to write off within 2 or 3 years or have to upgrade within 2 or 3 years because everything goes so fast. And where everybody is going, that is a little bit of a question that's really driven by these turbines, the size, and the height, and the weight of the turbines, but also the manufacturers still don't know that at all. And where does it end, really is the question, where does development of these turbines end? So we're in a second line of development, if you wish.
20:13 Andries Hofman: Yeah. I think that's a very big challenge indeed. If we look at the vessels that came to the market, that we designed for our clients, many of them are being upgraded as we speak. And by the time that we were designing them, everybody was thinking, "Oh they are so big, they're costly and they're actually too big for this market. It will be expensive to operate." But very soon, they were spot-on size-wise and they could really effectively install those turbines at sea. And now, at this moment with the newest turbines, we need to squeeze everything out of them to be able to install the third-generation turbines.
20:49 Thomas Lerchenmüller: Yeah, they maybe carry one or two, maybe.
20:51 Andries Hofman: Yeah. And next-generation turbines, maybe already is not possible anymore, for vessels not even 10 years old.
20:58 Thomas Lerchenmüller: Yeah. We were talking about vessels that came into the market in maybe 2012 or so, so like 6 years ago. And, they're now already really on the limit or just above or just below the limit.
21:10 Michael Gaines: Thanks for listening to this episode of NOV Today. If you'd like more information on GustoMSC, the people in technology, head over to nov.com/gustomsc. In our next episode, we talk about the difference between the offshore wind industry and offshore oil and gas. We also talk about vessel design considerations and how does weather impact design and operations. That and a whole lot more in our next episode.
21:42 Michael Gaines: Thanks for listening to this episode of NOV Today; we'd like to hear your feedback. Share your thoughts by tweeting us @NOVglobal and using the hashtag NOV Today, or you can contact us by sending an email to [email protected]. To stay up-to-date on the latest episodes, visit our website at www.nov.com/podcast. There you can find show summaries and links to subscribe on iTunes, Google podcasts, SoundCloud, or wherever you get your favorite podcast. For NOV Today, I'm Michael Gaines. Thanks for listening and we'll talk to you later.