Catching Wind: An Introduction to GustoMSC – Part 3 Transcript
00:11 Michael Gaines: Hello and welcome to NOV Today. I'm your host, Michael Gaines. In our last episode, we were introduced to GustoMSC, a company with a rich history of innovation and contribution to the offshore energy industry. In this continuation of our conversation, I speak with Thomas Lerchenmüller and Andries Hofman regarding considerations and differences between the design of an offshore wind installation vessel and an oil and gas platform. And, we also talk about the impact of weather on operations and learn a little bit more about the non-work side of both guests. Here's our conversation.
00:56 Speaker 2: It just struck me while we are talking, we didn't really address it, but there's another very big difference with the typical oil and gas work. You touched upon it a little bit, but when you think about a big offshore wind farm, you're typically installing 80, maybe 100 turbines. So when you install an offshore platform for oil and gas, there's one big platform that you put down there so you can wait on weather. But when you look into installation of 80 or a 100 wind turbines in the wind farm, there is still a very big development cost associated with it. So we still want to have first energy, like first oil, as soon as possible. However, we need to install many of those turbines. So it's a very repetitive character. So it is process optimization, much more than a one off installation that we have for oil and gas. So, this process-driven optimization is also a key difference in what we do.
02:00 Speaker 3: Yes. Yes. And it's driven really by indeed how the optimization, how big does the vessel have to be? How many turbines is the optimal number to carry in one go? Because you lose time when you load them in the harbor, and you have sailing time, of course, and outside, you install a couple of them, and what's the optimal number of that? But also, yeah. And also how to raise the installation capabilities. Because if you have to wait on... See if you have an installation, exactly what Andries is saying, you installed it one time, like a big drilling rig, you install it one time in one year or in two years. So if you have to wait for one or two days, that's not an issue. There's not a lot of lost time. But if you have... The turnaround time of installing one turbine is one day, so if you have to wait one other day, you could have installed another turbine. So, the magnitude of a delay of one or two days is a lot bigger than the impact on it on the whole scheme of things. It's a lot bigger than if you have an installation of only one time in one or two years. So, the efficiency and the capabilities of the vessel to be able to move every day is also really a challenge and to really maximize that capability.
03:11 Speaker 2: And then, of course, this is stretching of the industry a little bit, stretching of this process like installation. And I think your question that started off our rant on optimization...
03:23 Michael Gaines: Yeah, I know.
03:24 Speaker 2: Is there a some kind of a limit to the technology development, to the size development. Well yes, we are seeing some of them slowly appearing. That's one, as Thomas said, the cost. So, foundations getting very heavy. So, at some point, you may go to floating foundations, like we've seen in oil and gas, and a Bullwinkle platform, that's an alternate Shell platform.
03:48 Speaker 3: Yeah, yeah.
03:48 Speaker 2: Had a fixed foundation. And that water depth, nowadays we would never root for a fixed platform anymore. We will do it floating. Another one is, for example, for these big turbines, that the blades get longer and longer. With that, the forces in the hip where all the blades are connected, they become bigger and bigger. So, there is a material challenge there. So, from a materials science point of view, that's a big challenge.
04:13 Michael Gaines: Yeah, well, it seems that, to your point, though, the industry is young enough to where a lot of the... While there are some identified limitations or at least perceived limitations today, that between new ways of having the installations executed, materials science, also looking at the way that it's constructed, that really there's still a lot that could be done to a certain degree. I mean 'cause, yeah, I mean, there's a...
04:52 Speaker 3: Yeah, true, but because... You're correct. It's a young industry, but it's also a very, very fast developing industry. I think in the end, if you look at it now, if you look in the course of history, probably, it developed faster than the oil and gas industry in the same time.
05:11 Speaker 2: You see some convergence in methodology.
05:12 Speaker 3: Yes, there's some convergence and mainly it's not really... It's the economics of the installation jack up, so installation units in general, but that is the one thing. But I think the more important convergence of where the limits are is the balance between economics and what's technically feasible in the wind turbines themselves. And that really then drives also our development in the installation vessels that we design because there you see really that at a certain point in time now, it's flattening out. They say, actually the scaling up of wind turbines is the costs don't go up linear, they just go exponentially because the bigger they get, the blades and the materials, the knowledge that you have to put in or the research you have to put into material science to make things work when they're double the size, it's a lot more challenging than just doubling it and putting twice as much material in. That's just not what it is. You have to put it in a lot more effort to make it work still, when it's twice the size.
06:18 Speaker 2: And I think this is indeed where it will probably also end up, that we see that we can still do something on the technology side, and the turbines will still get a little bit bigger because the reason that they are getting bigger turbines, that we are looking at bigger turbines, is that the cost per megawatt hour. And so for energy, still has to go down. And if you have fewer foundations, fewer cable tie inch, fewer connections, less installation time, so bigger turbines means fewer foundations. That still seems to be a more advantageous path than just sticking to the same size and just repeating more of them. So there is an incentive so far to go bigger, but we do think that there are some limitations that, for the time being at least, around this, well, let's say somewhere between 12 and 20 megawatt. That's a very wide range, but there will be a limit to that. Yes.
07:21 Michael Gaines: When you look at your work and how you have arrived here, did you start out in your career thinking that you would be an expert in the wind turbine space? Thomas, you're smiling, so I assume yes, is that right?
07:45 Speaker 3: No. It's actually a very good question. And no, no, I would have not. Because when I came in, as Andries explained, I came in maybe two or three years later than he did, but there are still the wind turbine parts or the wind turbine installation that's a part of what we do that was really in infant stages, and the main driver was still oil and gas. Oil and gas was up and down. We were really in the height of developing our CJ series drilling rigs and then we had a couple of orders at that time, just after that. And that was really the booming parts. And renewable energy, in general, was still on the back burner and it slowly came and it only developed them, but it was really fun. It's really fun to see also the industry grow. And when I talk about that now sitting here, I start getting to feel old and have seen a lot of things, but that is really true.
08:44 Speaker 3: And also when we go to exhibitions or other things, we see how much the atmosphere of the industry changed and how they grew up really because in the beginning we talked about a table that was stable. In the beginning, the jack-ups that were used to install a wind turbine were very, very small civil construction jack-ups with nothing on, no cranes, no nothing. And they put on a big land crane like a Manitowoc crane or something on a huge structure to reach the heights and then they were sort of banging together, sort of a contraption to be able to install one turbine and it took them a week to install that turbine. And then yeah.
09:26 Speaker 2: Nobody knew whether this industry would last.
09:28 Speaker 3: Yeah. And so, that was the way they did it when we started. And now, if you look at it, you see these vessels that carry eight turbines and they install them in 24 hours. After one week of turnaround about, they're back in the harbor to pick up the next eight and go out again.
09:46 Speaker 2: Efficient machines.
09:47 Speaker 3: Very very efficient machines and amazing and that is a total change. And I haven't wouldn't have thought that.
09:53 Speaker 2: I think for both of us actually this applies that while we are studying, there was no wind farm yet offshore operational. There was no wind turbine in the water.
10:01 Speaker 3: Yes, no, correct.
10:03 Speaker 2: Well, some trial turbines, [10:04] ____ have one, was actually after we graduated.
10:09 Michael Gaines: I think that's really interesting because when you compare and contrast with oil and gas, there's no one that I can interview today that say, "Hey, do you remember before we first struck oil in the 1800s? Do you remember what that was like?" But yet, you can sit here today and say, "Yeah, I kinda remember before there were... " that's a really interesting perspective to be able to have.
10:30 Speaker 3: It is and that is more of a testament to, indeed, how fast this industry develops. So, that is really amazing. And so, yeah, that's fun being part of that. Yeah.
10:38 Speaker 2: We both started definitely in oil and gas. But although my first big job, I have to say, was for the first purpose built wind turbine installation vessel where I was responsible for the design of the legs. So it was...
10:53 Michael Gaines: How was that experience?
10:56 Speaker 2: It was funny, this pioneering, really pioneering. Of course, jack up technology existed, but for a different application. And we were just trying to in a way, reinvent the wheel, try to apply technology that is existing to a new industry, but nobody knew really how this industry would work and how it would look like. So we, little by little, had to find out all the different particulars of this industry.
11:24 Speaker 3: And what is really good though, I think also applying to both of us is that the... Let's say, our backbones or what we grew up with and also our company grew up with, is really the offshore industry, in general, and the oil and gas offshore industry, is a very, very good background, and backbone to have. It's a good basis. What also I think is really good is that our company grew up in being on the forefront of really the harsh environment jack-ups and floating vessels as well. So really at the higher end of the spectrum and so we could use that knowledge to get safe and efficient vessels in the market, in a good way.
12:07 Speaker 2: Solid and safe.
12:09 Speaker 3: Solid and safe. Sometimes it also works against us because we have to compete with vessels or with designers that come from the other end of the spectrum that come from the... Let's say, not disrespectful, but in the Gulf of Mexico, you have already for a really long time, you have to lift boats and you're typically self-propelled. Also jack-ups with very thin legs, and they can jack up really high and very long legs, but when bad weather is coming, they're moving back into the harbor, so they have to shelter. And our self-propelled jack-ups, they are often called lift boats as well, but we try to avoid that term because these are proper jack-ups. They are self-propelled, that's correct, that's the similarity. But on the other hand, they can also stay out. Offshore, jack up, stay out offshore, and survive a storm.
12:58 Michael Gaines: Oh, wow!
13:00 Speaker 3: That is really the intention of these jack-ups because what you have is, especially in Europe, the wind farms sometimes are 60, 70, 80 miles, maybe even 100 miles offshore. And then when you have six, seven turbines with you and you go offshore and then you're up there, out there, and then bad weather is coming and then you have to jack down and go back to the harbor to shelter and then as soon as the weather is better again, you have to go back out again. You lose a lot of time and so what you do with the jack-ups of our design then is you just stay elevated. The only thing you have to do is you put down your crane boom. You sea fasten and everything for storm. And you can just ride out the storm or ride out the bad weather, because sometimes it's only a little bit, too much wind speed for operations of a crane operations.
13:43 Speaker 3: And as soon as the wind dies down again, right away, you can just get rid of the sea fastening, get the crane up, and start working again instead of still coming from the harbor, maybe 100 miles away, to go to the location. So your up times, or your time at location to be able to do the installation is a lot higher.
14:00 Michael Gaines: So wonder why I wouldn't want to have a design of yours that could do both, that could work in oil and gas or wind installation.
14:10 Speaker 2: Many clients ask us to do something like that, and of course, we like to avoid the Swiss pocket knife.
14:17 Michael Gaines: Well, I was gonna use that phrase and I chose not to.
14:19 Speaker 3: No, no but it is a good term, and I think it's an important point.
14:24 Speaker 2: Yes and especially now that the turbines get bigger, you see that the difference has become bigger. Typically, for oil and gas, we would not look into a semi-slender long vessel for oil and gas. We would typically look at a little bit deeper water. We don't look at a very big crane and now the cranes become bigger and bigger for offshore wind installation. So then the offshore oil and gas requirements start to diverge or the wind turbine requirements start to diverge from oil and gas requirement more and more.
15:00 Michael Gaines: Yeah, that makes sense.
15:00 Speaker 3: It's funny, actually, you asked, how was it in the beginning when you started? Well, of course, there is some general good practices and common offshore technology, but for offshore wind, in particular, there was not so much rules and guidance. So we had to find out ourselves, for some things, that the oil and gas practices were sometimes not covering all that was required from offshore wind. We have also been pretty much at the forefront of developing new guidance, new rules, and think of how things should be different in a safe way in this industry. Actually, this is what we're still doing. We're still doing that. Yeah, that what I just wanted to say because actually, with Classification Societies which are normally... Classing these type of units, they are also struggling. Because they're looking at it and is it now a ship because it's self-propelled, and it's sailing? Or is it now a jack-up, for example?
15:58 Michael Gaines: Which there are two different...
16:00 Speaker 3: It's two different things. The one thing is a table, the other one is a boat. So how does that match? And they have different rule requirements and if you put all these rule requirements together, then they often don't match. And then they either... It's an overkill so you put the rules on top of each other, which makes, for example, the vessel very expensive or unnecessarily heavy. Or on the other hand, if you don't do that, then there might be holes in the rules or in actually the guidances that make your unit inherently unsafe. So that you overlook things, that's the other danger. Yeah, being a designer, we know a lot of these aspects and thankfully, we have a good dialogue I think with a couple of the big Classification Societies that are also... That they like us to challenge them on the regulations and they're open also for our input on... Hey, have you thought about that? Or, what is your thoughts in that?
17:03 Michael Gaines: It's interesting cause yeah, I could see the challenge. It's almost, it's more of a fantastical idea that it'd be like trying to regulate someone who could successfully create a car that can fly. Which regulatory body covers it? Is it the aeronautical governing body or is it the Transportation Ministry? How do you do that? And to your point, you have to forge that space. I guess more practically now, autonomous driving. Do you treat it as a software package that just so happens to be in a car? Or do you treat it as a car that happens to have advanced software?
17:43 Speaker 3: Exactly, that's exactly it. And the interesting thing is also there, we don't wanna be the rule makers, of course not. We don't wanna sit on different chairs because we're the designers, that's it. And we don't wanna tell the rule-making bodies what to do. But what we do like to do is, of course, offer our knowledge and challenge them on their thinking, but again, they have to think of what is safe and what is not. But in general, I think we have a policy in the company that a lot of times you can say, "Oh yeah, as long as I abide by the rules, it's all fine." But we have our own policy that we say, "Okay, the minimum that we have to do is, abide by the rules of Classification Society, and the governing bodies, but we have our own set of rules. That we think, on top of that, that we think are necessary to apply to make the unit safe. And sometimes we're, I wouldn't say price ourselves out of the market, but sometimes we are a little bit more careful than our competitors, which makes sometimes our units maybe less attractive to buy because they're maybe... The crane on the jack-up is maybe smaller than the other one, for the same size of jack-up or something like that.
18:57 Speaker 3: And other ones say, "Oh, we can stay out there in the storm really easily for this-and-that weather." Whereas, pretty much, when we do the calculation, we say, "Ah, it's maybe 10 meters of less water depth that we can stay out there. But we have our own set of rules that we say, hey, but we always want to have... Be able to sleep at night and have a sound, safe vessel that, of course, is efficient, of course, is cost-efficient also, but still, the first premise is because it's offshore work where people are there. So the most important thing there is that everybody's safe. That's the main driver.
19:35 Speaker 2: It's really not in our advantage if any accident, also with our competition happens because it slows down the industry. So it's also some kind of industry responsibility, involvement, and the other part is also by, I would say, educating or just cooperating with classification societies to make better guidance, better rules. We also create some kind of a level playing field. We are not always the ones being overly conservative in the eyes of others. If classification society says, " Well, you did a good job there." we are also going to require other companies to do the same. And as an industry, we're getting better at it. We are getting safer. We are getting more efficient. So it's, in a way, also creating this level playing field where everybody is now getting a little bit safer and better.
20:21 Speaker 3: And adding to that is, we have to knock on wood with that. In the winter of an industry up until now, no huge accidents have happened. Because, normally in our history, experience if there is a big drive for rule changes, or for adapting rules, it's big accidents. You have Piper Alpha, you have Deepwater Horizon. All these, they drive rule changes. And the challenge with the wind turbine industry is that because, thankfully, there haven't been any big accidents yet. So, I mean, there have been some things, but not in that magnitude of Deepwater Horizon or Piper Alpha. Advocating these rule changes and trying to help them and develop them is a lot harder, a lot more work, let's say, because the need for it is not always so visible. So you have to show people a lot more extensively why you think it has to be that way. I mean, an accident, as bad as it is, is quite illustrative of what's going on or what went wrong. But if that has not happened yet, thankfully, due to chance but also due to, you know, that, still, people operate more safe than you might expect. Yeah, it's more difficult. You have to preach more to the choir than you would.
21:52 Speaker 2: It's the typical question. This has worked for ages in this industry.
21:54 Speaker 3: So why should we change it? And then, still, we say, yeah, we were lucky maybe with a couple of things that nothing happened until now.
22:02 Speaker 2: And if you can demonstrate some near misses, and also, you can demonstrate how to avoid them in the future, and then you're one step further.
22:09 Michael Gaines: I mean, I would suspect so. I guess that'll be an interesting ongoing area of investigation and discovery. As you mentioned, it's a system that is predicated on high efficiency. And so it behooves a business owner to want to increase throughput and increase installations as much as possible, obviously under the umbrella of safety, but one more installation on a round is that much more energy produced, or fast energy as you say, right? Yeah, it'll be interesting to see how this develops, and I'm glad to know that you all are and that we all are a part of helping collect and provide that level of information and insight to help drive the conversation, because, yeah, to your point, it doesn't help anybody to just sit on that or to drag our feet while we can otherwise be proactive and say, hey... 'Cause I think it's just a very interesting concept, to be in a space where there is no regulatory, maybe, documentation for what you do, but you kind of have metadata or pieces and say, hey, we're not lobbying, necessarily, to do this, but we're just saying, "We see this. We need somebody to help us in that space." So that's quite interesting.
23:41 Speaker 3: I think we did write a couple of times some articles and did some presentations on it. Safely pushing the limits. That's what it is all about.
23:49 Speaker 2: That is pretty much it.
23:50 Speaker 3: We are trying to optimize, to push the boundaries. We want to provide our clients with optimal working possibility. So, of course, naturally, you will operate also near the boundaries of safety. But you must know very well what your safety boundaries are. So that is a part where we try to optimize, squeeze everything out, but still on the safe side.
24:15 Speaker 2: Absolutely.
24:16 Michael Gaines: So, I guess kind of wrapping up. Well, two things. One, we've kind of talked a lot about sort of where the industry is headed somewhat. I'm curious as to what really excites you the most as you kind of look ahead to 2019 and you look ahead just generally into the future of this, I think, Thomas, as you said, exponentially increasing industry, increasing in adoption, increasing in technological innovation, you name the metric. But what excites you the most? What kind of motivates you? Andries?
25:05 Speaker 2: I can pick out two components in particular. One is that, from a personal point of view, I really like to contribute to a little bit of a cleaner energy supply for everybody in this world. This is a noble thing for myself, but it drives me personally. And from a more practical point of view. I really like to work on innovating new things in this industry. This new industry is relatively innovative, there is room for innovation, it's new, we are growing rapidly, so we can come up with new things. And that's something that I really like to explore every day. Just look at new things, doing things better, doing things smarter.
25:51 Speaker 3: Now, I really... I can only agree to that. And maybe adding to that is indeed what I love to do, which is as being a naval architect and designer, in general. We still have the chance, even though we now put in a big, nice track record of series of jack-ups. Still, we have the chance to, sometimes with clients, start from a blank sheet of paper and say, "Hey, anything goes, let's see where we end up." And these conversations, from really starting at that point, going, and then having a vessel maybe three years later in the water, installing turbines in an efficient way, where everybody is really happy about the performance and everything. These kind of processes, next to what Andries was saying, that's amazing.
26:34 Speaker 2: That's a really nice journey.
26:35 Speaker 3: I was really blessed to have that already happening to me two or three times already with two or three of these vessels. And I was there from the beginning of the concept to, really, the end when the unit is operational and could see how that happened and realized. So realizing something, that you really start on a piece of paper and then have it out there, vessel of 28,000 tons, elevated weight, being out there and doing the work, that's amazing.
27:03 Speaker 2: This applies to both of us. We are indeed looking always, from a very early start of project, looking at the overall design. So not a piece of equipment, but look at the whole... The overall concept. So, from the start, working the overall concept, "Oh, we need to adjust... " Make compromises all the time. It's very nice to compromise on speed or to, let's say, to optimize on speed or to optimize on weight or to optimize on cost. But just optimizing on one item is never good enough, so we are always trying to find the best balance of compromises. And that challenges us, but in a very nice way.
27:43 Michael Gaines: So for two expert designers such as yourself, while I could easily believe that you live here at the office all the time, I know that it's not true 'cause I didn't see a sleeping mat in your office.
28:01 S?: No, no.
28:01 Michael Gaines: So I know that you go somewhere else.
28:03 S?: Under the table. [chuckle]
28:03 Michael Gaines: Yeah, maybe under the table. So when you're not at the office, designing industry-leading offshore installation vessels, what do you do? What keeps you busy?
28:20 Speaker 3: Yeah, for me, together with my wife, taking care of three kids. So that is... They're growing, they're not kids.
28:26 Michael Gaines: That's the full-time job.
28:27 Speaker 3: That's sort of the full-time...
28:27 Michael Gaines: This is just your side gig.
28:29 Speaker 3: That's actually where I take my rest, and then my mental rest.
28:32 Michael Gaines: Yeah.
28:33 Speaker 3: So that is the main thing. I'm cycling a lot, so on my race bike. I'm actually originally from Austria, where there is a lot of mountains. And I like to cycle, really climb mountains with a bike. But unfortunately, I'm here stuck in Holland, where it's all flat.
28:50 Michael Gaines: Well, then you haven't visited West Texas; that's flat.
28:53 Speaker 3: But this is flat and windy.
28:55 Michael Gaines: Yeah.
28:55 Speaker 3: But this is also something that keeps me busy and... And especially also, with the kids, it's mainly a lot of sports of the kids now, more than my own sports.
29:04 Michael Gaines: Yeah, well, that's like my...
29:06 Speaker 3: That's the main thing, probably, yeah.
29:08 Speaker 2: This is really funny because now you've told everything that I had to say. I only have two kids, but I'm cycling here as well. [chuckle] My day job and my night job is about family and kids. And inbetween, we do some work here. Yeah, we do. Both... We work pretty hard but we both have a sports mentality, and that comes all the way through in our family lives as well. So with the kids, sporting a lot, but also, here with colleagues, sometimes we do nice things, we do sports events, and we make a nice ride outside on our bicycles and...
29:41 Michael Gaines: Yeah, that sounds great.
29:42 Speaker 3: Yep, it is.
29:43 Michael Gaines: Yeah, good. Well, Thomas, Andries, thank you for taking the time to share your perspective and enlighten us on the offshore wind turbine installation space. A space that I knew nothing about before, and now I feel even more excited about what's to come. So thank you.
30:04 S?: Thank you. Has been a pleasure.
30:05 Michael Gaines: Yeah.
30:05 Speaker 3: Absolutely a pleasure.
30:06 Michael Gaines: Yeah. Thanks for listening to this episode of NOV Today. If you'd like more information on GustoMSC, the people, and technology, head over to nov.com/gustomsc. Thanks for listening to this episode of NOV Today. We'd like to hear your feedback. Share your thoughts by tweeting us at @NOVGlobal and using the hashtag #NOVToday, 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 podcasts. For NOV Today, I'm Michael Gaines. Thanks for listening, and we'll talk to you later.