Overseas staff

LONDON, UK – Cerulean Winds is bidding for four “huge gigawatt-scale” sites from Crown Estate Scotland when the auction opens in August, which are expected to fetch around £6billion each, according to a recent press release from Cerulean.

If successful, the company estimates the work would create more than 10,000 jobs in the UK, with the majority in Scotland, with ‘full fabrication and assembly’ of the wind turbine towers and foundations to take place in Britain. Brittany.

The aim is to help the Scottish supply chain grow in scale and expertise now that key ScotWind contracts are approaching later in the decade.

It comes as Crown Estate Scotland is due to open the Innovation and Targeted Oil and Gas (INTOG) auction next month, a program of floating wind projects to supply green power to offshore platforms.

Ultimately, through its electrification plans and other means like using green hydrogen, Cerulean says it can help every offshore facility meet government-mandated emissions reduction targets of 25% d by 2027 and 50% by 2030.

Engineering firm NOV was hired as the main contractor, which in turn signed a Memorandum of Understanding (MoU) with UAE-based manufacturer Lamprell on the foundations.

Despite this, Cerulean promised that the manufacture of the foundations and towers would be done in the UK. He added that his partners are expected to be in the UK to boost heavy manufacturing capacity and that the levels of work involved would lead to substantial foreign investment in the Scottish economy, Cerulean reported.

Funding and costs

At its heart is the ambition for four separate sites – one in the east and west of Shetland and two in the central North Sea.

Because the offshore wind is intermittent, wind farms must deliver many times more power than needed for rigs, hence the gigawatt scale.

Excess electricity will be converted into green hydrogen sent to a processing plant in Shetland – and one or two others in the north of Scotland and the east of England – to deliver to local markets.

Each site will be funded through a special purpose vehicle (SPV), owned by Cerulean Winds and institutional investors, covering 30% of the capital needed.

The remaining 70% of funds will come from the infrastructure debt market, where investment banks Societe Generale and Piper Sandler have been engaged.

Cerulean said he had no concerns about hitting funding targets, with investors “on hold,” but money won’t flow until INTOG’s leases are secured.

Adopting this approach means that oil and gas companies will be insulated from development costs and will only have to plug and play for the energy they use, at a guaranteed price; the company is also in discussion on the flexibility of power purchase agreements for platforms for which production shutdown dates are uncertain, and therefore the economics of which are unclear.

Electricity costs are only one piece of the puzzle, with some operators facing prohibitive costs to modify electrification platforms.

In these cases, a Cerulean supply chain consortium partner (undisclosed) will retrofit gas turbines onboard the rigs to take a hydrogen blend, helping them meet emissions targets or find a hydrogen solution for heat.

Steel requirements

Cerulean is targeting four sites each requiring around 1 million tonnes of steel for the foundations and towers, which could cover the lot when it comes to decarbonizing the offshore platform.

However, Cerulean said he recognizes that INTOG is a competitive process, which also includes smaller projects.

Cerulean has also been in talks with companies studying shore power and how its projects would interact with that infrastructure.

INTOG is looking to offer option deals in the winter of 2023, so the projects are expected to be operational well before ScotWind, giving the supply chain a chance to grow.

If Cerulean gets the acreage from INTOG, it will be responsible for 4 million tonnes of steel needed for new floating projects, which the Scottish supply chain cannot deliver on its own, Cerulean reported.

According to Cerulean’s plans, some 10,000 jobs in the UK would be created through manufacturing and assembly, with work expected to ‘far exceed’ the 50% local content target set out in the transition agreement from the North Sea.

Contractors

Cerulean’s aim is to have as many of these contractors as possible with experience of building, manufacturing and assembling whole units in the UK, and a request for information has been sent to the entrepreneurial community.

Not everything can be done in the UK, hence the non-binding memorandum of understanding with Lamprell, Cerulean said. In both cases, the company needs more partners to deliver the work and engages British shipyards.

07.12.2022

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