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Ørsted CEO Change, Shell Leaves Atlantic Shores
This week on Uptime, we discuss Ørsted CEO Mads Nipper stepping down, Shell withdrawing from the Atlantic Shores offshore wind project, and a study showing only 15% of employees feel their managers are transparent about challenges in the workplace.
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You’re listening to the Uptime Wind Energy Podcast, brought to you by BuildTurbines. com. Learn, train, and be a part of the clean energy revolution. Visit BuildTurbines. com today. Now here’s your hosts, Allen Hall, Joel Saxom, Phil Totaro, and Rosemary Barnes.
Allen Hall: Danish Renewable Energy Company, Ørsted, announced a leadership change, with CEO Mad Snipper stepping down after four years at the helm.
Rasmus Erbo. Uh, the company’s deputy CEO and chief commercial officer will take over as group president and CEO, uh, in February. Uh, the transition comes as Orsted adapts to evolving market conditions in the offshore wind sector. Now this, uh, I guess around the industry was expected news. Uh, if you had talked to somebody, uh, about offshore in the US, uh, they felt like what had happened over the last year or so was really rough on the leadership at Oersted, part of this too, guys, is that some of it is just happenstance, interest rates rising, the supply chain nightmares that were happening and Mads Knipper would just happen to be there at that specific time.
Is, is that the feeling like it was just bad timing, uh, for Mads?
Phil Totaro: Yeah, it’s, it’s part of it, but the, the reality I think is you, you’ve got a scenario where he, he was there and the buck stops here and all that sort of stuff, um, if you’re the boss, but he also was one kind of overseeing a lot of the deals that got him put in place that led to all those impairments that they ended up having.
It’s like, yeah, okay. Interest rates are high, but. It’s like he, he, you know, was there signing off on these, these deals with, uh, PSEG in New Jersey and, uh, Eversource in, in Connecticut, uh, and Rhode Island that were just frankly terrible deals. I mean, it just, they, they ended up, Orsted ended up having to pay.
for whatever the utility companies had invested time and money and effort and et cetera, uh, into, you know, the development work on these deals, um, in case they decided to pull out plus, you know, uh, a little extra. And it’s like, that’s, that’s the way it is. You know, you might think that that’s typical, but when you get into a deal like this for an offshore wind farm, uh, I mean, we’re starting to talk in the hundreds of millions of dollars, and it led to this, this multi billion dollar impairment that they had, you know, last year.
So, you know, I think I said on the show six months ago that he was likely to be gone, and guess what? He is.
Allen Hall: My feeling about it is there’s just a little bit of happenstance, but that’s the problem at being in leadership You don’t get to choose the economic times in which you’re running the company and you have to play what the cards are dealt right, I Wouldn’t say any offshore wind developer in the United States.
This has great numbers at the minute So it isn’t like Orsted has is in a different bucket at the minute it but I I I think the, my contention at the time was New Jersey really screwed Orsted. Not the, the government in New Jersey was just negotiating in bad faith. And they wanted to take all the federal tax credits, which Orsted agreed to, and then they needed them back.
And then it just went back and forth there. And it just felt like it was unnatural for a Scandinavian country. Like an organization in Scandinavia like Orsted is, which is, you know, the national, uh, energy source for Denmark to deal with such kind of shady characters. It’s, it wouldn’t happen if they were dealing with Norway or Finland or Germany, those things wouldn’t have happened like that, but it just felt like, uh, they were a little bit out of the elements in terms of how they could get screwed.
And they, and they did. I
Joel Saxum: think if you look at the, like what the background with Mad Snippers was, is he was there for four years and they grew their portfolio big time, right? They went from 11, about 11 gigawatts. That’s seven gigawatts of growth in four years of installed capacity is huge. So he has a skillset of scaling up, moving, making things go fast.
Uh, and if you read his like a little letter that he wrote on LinkedIn, thanks for all the time with the colleagues, the standard stuff you read, right? Um, but he did in that letter, he said, you know, look at the, the, you know, leadership’s looking for someone with a little bit of a different skill set. And if you look at Rasmus, Airbo’s skill set, he was a, he was lead, leading the IPO.
He was a part of divesting in the oil and gas business. So he has, it looks like he has a bit more of a financial or commercial mind than say Mads was just like, blow and go, let’s, let’s develop as much as we can is what it looks like from the numbers. Right?
Allen Hall: Yeah. But Orsted financially is doing just fine.
It didn’t look great, but Orsted is doing quite well. But the stock, the, the stock price is the, is the one, right? That’s the one you can’t really walk away from, but you don’t have any control over the stock price. In a sense, he delivered EBITDA numbers that were true, and it wasn’t like he was trying to deceive the market, but no one ever accused Mads of that.
He, he was really straightforward When bad stuff happened, he’d get out in front of it and tell you bad stuff’s about to happen, which is great. However, the market just moved away from Orsted and from renewables from that sense, uh, does that sound something he can really control, right?
Phil Totaro: No, uh, from, from that perspective, but, and, and look again, to, to, you know, not beat up on him too much, like what Joel said, you know, he oversaw the expansion of the company.
Orsted acquires, uh, Lincoln Electric under his, um, you know, watchful eye. Uh, and, and they moved into a lot of new, new markets, including, you know, developing offshore in Taiwan, um, you know, growing their portfolio in Europe and pioneering a lot of what got, you know, built and, and, you know, is still being built here with, With revolution wind, uh, in, in the US, you know, I mean, he, he caused the company a certain amount of frustration and embarrassment.
And, you know, typically in Europe, like they, they don’t just like, unless it’s like egregious, like you won’t see an executive get, you know, heave hoed, right. Immediately after, you know, something happens, they’ll usually give it six months and then they’ll, they’ll just shift in a new direction, which is basically what they’re saying.
So again, unsurprising that this happened, there were plenty of good things to talk about, but also some, some concerns that I’m sure the company had as to how things were being handled and bringing in somebody else. That’s probably going to handle them in a, in a bit of a different way is what we’re going to talk about.
Um, you know, something that, uh, frankly needs to happen sometimes at a company to, to, you know, stabilize, especially for a publicly traded company, like you need to, to provide investors with confidence and, and stabilize the situation.
Allen Hall: Is Oristed going to structurally change from what it is now?
Phil Totaro: That’s a interesting question because they don’t actually have a whole lot.
That they could, you know, like lump off and. Right. I think they can lean a little bit, but not much. Yeah. I mean, but it’s also, you know, if you made it a point to acquire an onshore renewable portfolio, I mean, maybe they sell that off, but that could also just be like, What a lot of other companies do with an asset rotation, just like, Hey, let’s get some cash by divesting some, some older assets, um, and reinvest the proceeds in new greenfield projects.
That could, and it is probably, if anything were to happen, that’s the likeliest thing to happen, but it’s not like you can take and split the company up. Or anything any more than it already was, they already got rid of the oil and gas stuff and they already got rid of the utility, um, retail business over in Denmark as well, a year or two or three ago.
So, you know, that this is it, like, you know, Orsted’s, uh, uh, pretty much an offshore wind and a little bit of onshore renewable development company.
Joel Saxum: Well, you have other, other people investing in Orsted too. So, so you have, you know, Econor’s, they, they’re 10%. Now from, from the Norwegian side, getting into this thing to kind of drive their goals, of course, towards, um, you know, investing in renewable energies, but what does it look like there, right?
Is what’s the, what does the fly on the wall say at Econor’s office looking at this thing there? I mean, in my mind, probably happy about this change because there’s a, it looks like there could be a way forward.
Allen Hall: Well, did they drive it, Joel? I think the question is how much influence did Equinor have in the boardroom to make this swap and to, to put more focus on the sort of day to day finances?
I think with
Joel Saxum: their, with their 10 percent investment, they actually didn’t get a board seat. That doesn’t mean they don’t have influence over what happens at the board level, right? But from a, from a legal standpoint, I think they, they didn’t have that. Yeah, but there’s, there’s, there’s a lot of coffee being drank on the streets in
Allen Hall: Copenhagen.
There’s always a voice if that kind of percentage of a company. And I think that’s probably the, the, you know, if you look at the straw that broke the camel’s back here, it was probably that it just feels like it. Maybe it wasn’t, but it does feel like it when you talk to people. It’s Denmark itself is very proud of.
Ørsted. They should be. It’s an amazing company. It’s done wonderful things, uh, but to have the Norwegians come in and acquire 10 percent of it to write the company at the time just didn’t feel good.
Joel Saxum: Merit with a Danish offshore wind auction, and the Danish government owns part of Ørsted, and they couldn’t even, they didn’t even solicit a bid for any of the projects there.
So there’s like some weird Yeah, there’s some weird stuff going on in Offshore Wind over there, so it demands a little change.
Phil Totaro: You know, developers are changing their tune pretty quick here, saying, oh, well, we wanted subsidies, and it’s like, well, no, now we don’t want subsidies. Uh, we want, you know, whatever we want, and it just, like, let the government Just let us go do our thing.
But it’s, it’s kind of strange because I, you know, the, the Orsted is still, you know, in terms of, well, with the exception of China, the, the number one global, um, you know, offshore wind project developer and asset owner. They are are still in a position where they can, you know, take advantage of a lot of emerging markets if they choose to do so.
So it’ll be interesting to see if some of those plans, you know, given again, we’ve still got a high interest rate environment right now. But is that going to be the case in 9 months or 10 months? Um, you know, now that we’re already in in February here, Uh, you know, by the end of 2025, what’s the market really going to look like?
And I, I think it’s going to change up quite a bit. Um, and, and it could be an environment where a lot more investment is poised to flow. And, you know, Orsted still knows how to develop a project or two. So it’s not like they’re not going to be well positioned.
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Allen Hall: Shell has announced its withdrawal from Atlantic Shores offshore wind project off the coast of New Jersey, much like everything that happened in Orsted. This decision comes amid regulatory changes and follows a recent executive order that placed new restrictions on offshore wind development.
Now, the project, which had secured most of its permits, was designed to power approximately one million homes across two phases of development. In the press, In the United States, it’s being seen as a Trump win. But a billion dollars is still a billion dollars. A shell, which would obviously indicate a shell loss.
So it’s like this, somebody wins, somebody loses scenario. I’m not sure that’s actually true. Obviously there was going to be some slowdown because of the Current administration. Wiping this away and just saying it’s a complete write off, Phil, seems a little unusual right now. And maybe they just wanted to get out of the project altogether, and it has really nothing to do with, with the administration.
Phil Totaro: Yeah, but, uh, look, at the end of the day, that was just the nail in the coffin, because it, it, they were certainly looking at, you don’t just make a decision like this to divest, and take an impairment of, you know, 996 million, although, again, most of it wasn’t necessarily, uh, fully attributed to the Atlantic Shores Project, but a large chunk of it was, um, because of, A, everything they had already invested in the project development, and B, what they were, you know, future revenues, etc.,
etc., that they were expecting. You know, you’re, you’re still in an environment where they’ve spent You know, tens, if not hundreds of millions of dollars on leases, they’ve spent hundreds of millions of dollars on project development expenses up until now, trying to cultivate the project as well as the supply chain around the project that they’re going to need to, to build.
They’ve also invested heavily into developing the concept for the interconnection and, and, you know, the, the Atlantic shores interconnection wasn’t just going to be fed in. You know, from one project, there were other projects and, you know, adjacent to that, that we’re also going to be fed into New Jersey.
And now New Jersey’s saying, you know, the governor is basically saying, well, that’s it for offshore wind for a while. Uh, so, you know, I, I consider this to be a failure on. Uh, the part of, of the current administration to not foster an environment where people feel comfortable investing.
Allen Hall: So that’s a good point, Phil.
I want to flip that on its head a little bit. Isn’t a large part of this, the New Jersey governor, the reason that Orsted is not there is because of the New Jersey governor, the reason that Shell’s pulling out is because of the New Jersey governor. You can’t have it both ways. When the election was kind of around and renewables weren’t as in favor.
It’s like, Oh, I think we ought to just take our time, slow it down. We’ll develop it over time. Like when you have billions of dollars on the line, that’s the last thing you want to hear from the government. Like make your freaking mind up and let’s go. Trump had nothing to do with that. That was, that was New Jersey.
Phil Totaro: I mean, let’s, let’s be fair though. It’s, it’s both of them because at the end of the day, again, you can’t, you know, if I’m, if I’m looking at trying to do, and again, to be clear, Trump’s order. really applies to leases for new leases that weren’t already allocated. The problem, however, is that for leases that already have been allocated, they’re also talking about slowing down or stopping any additional permitting for, for those existing leases.
So if I’ve come into the market, particularly from abroad, and I’ve spent 400 million combined on a lease, development costs, and supply chain costs, expecting to see some kind of a return, and I get both the governor of the state that I’m trying to do the project in and now the new president trying to preclude me from doing it, I’m Yeah, I’m frankly going to be pissed and I’m going to be, you know, I’m going to want to either pull out.
I’m going to want my money back. I’m going to be, I mean, he’s making people’s wallets lighter and it’s affecting people here. You know, if you are the leader of anything, if you’re the governor of a state, if you’re the president of the United States, if you’re, you know, the leader of a company, your responsibility is to foster an environment where whatever it is you’re responsible for, And I don’t see the people in positions of power doing that.
That’s what my problem is.
Joel Saxum: I think three words here that may not be very common to our wind brethren and sisters. Veto. Whale. Ardo. Those are the three platforms that Shell has been developing and is developing in the offshore oil and gas plays in the Gulf of Mexico right now. They’re the, they’re one of the top producers out there, right?
So as soon as Trump goes, drill, baby, drill, drill, baby, drill, we don’t know what we’re going to do to win. And you’re looking at it going, I don’t know what we’re going to do, maybe this, maybe that. And you look at the margins that can be had in offshore oil and gas versus offshore wind. You say, you know what?
We’re I’ve had enough of this problem. I’m done with it. I’m going back to where I know I can make money for my stakeholders and my company. And, and they’re one of the top producers in the Gulf of Gulf of Mexico, Gulf of America, whatever you want to call it. And they’re going to, they’re going to continue to push that way.
But they just got, but, but they’ve, they’ve optimized what they’re doing out there with these three plat, these three new platforms are the first platforms of their kind that are built. They almost exactly the same. They’re replicas of each other. That has, that doesn’t happen in offshore oil and gas.
Usually everything is bespoke and custom. These are replicas of each other and they plan to be. Operations and maintenance, smart platforms, a lot of tech out there, a lot of AI on these platforms. And they’re going to make, that’s going to make margins increase and increase and increase in offshore oil and gas.
And that’s where they’re going to make money. That’s where they’re going to put their money to make money.
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Allen Hall: Well, I wish Rosie was here because she provides some good feedback because this is an interesting news item that’s popped up.
A recent leadership IQ poll has revealed concerning trends in workplace communication with only 15 percent of employees feeling their organizations are transparent about challenges in the workplace. Uh, the phenomenon known as glossing occurs when managers downplay workplace issues in an attempt to maintain positivity, potentially creating disconnects between leadership and staff.
Now, uh, that study found that only 24 percent of respondents reported their leaders consistently encourage and acknowledge suggestions for improvement, while 16 percent said their leaders never do this. So this has a lot to do with, I think, the economic times. In order to keep an office running and headed towards some direction, you have to downplay the horrible scenarios you watch as there may be layoffs next door and the company down the street.
You may see closing of businesses as you drive home. That starts to worry everybody. And so what happens is Managers tend to downplay and say, no, no, no, we’re fine. We’re fine. We’re fine. We’re going to work 80 hour weeks, but we’re fine. And that doesn’t feel right to a lot of people. And I think, you know, people, a lot of employees know, they, they see the writing on the wall, they read the newspaper, they read the, uh, The internet, they see it.
It’s there. Uh, and I see this a lot in renewables, actually. Uh, some of the names we talked about earlier in this episode, I think we’re in that moat, like we’re going to be fine. It’s going to be fine. It’s going to be fine. And then it’s not, it’s one of those, uh, it’s, it’s, it’s slowly changes, slowly changes, and then there’s an abrupt stop and everybody’s waiting for that abrupt stop.
It’s that’s hard thing to manage for the low level managers though. And Phil, you’ve been there. I mean, you’ve been in some real tough situations in your career. How do you handle that? Do you just ignore what the management’s saying? You just say, I’m going to pay more attention to what’s happening on the outside, no matter what management’s saying?
Phil Totaro: It depends on what level of influence, I guess, you feel like you have within the company and, you know, cause ultimately you are. If you’re in a position where you’re interacting with customers, especially, they need a certain perception, um, of your company and, and your company’s health and success and everything in order to feel comfortable working with you and, and frankly, allocating, you know, tens of thousands, if not, you know, hundreds of thousands or millions of dollars, uh, on, on projects and, and whatnot that they, they work with you on.
So that’s, that’s, that’s That’s a part of it. The other part is, you know, how does that reflect back internally? Um, you know, at the end of the day, I mean, look, I’ve been in a company where, you know, it was Clipper Windpower. I’ll, I’ll, um, name names because it’s been, you know, 15 years since any of us have been there.
Um, but we couldn’t. We suffered from a dearth of talent, but a leadership that couldn’t pull the trigger on me, you know, and, and just make a decision and say, this is what we’re doing and we’re going forward. I left Clipper in 2010 because I felt like I was in an environment where we weren’t going to change.
We, we were not going to, it was a sinking ship and I could see it. And I didn’t want to be on the Titanic as it went down. You know, people can look at me however they want to look at me for making that decision, but, I mean, I’ve now been running a consultancy that’s lasted longer than Clipper did. I mean, my company’s been around for 15 years, not for nothing, but hey, you know, we, we made it, we made it longer than Clipper did, so I guess I must be doing something right, uh, over here.
So, you know, I guess that’s my, my two cents on, on the whole matter.
Joel Saxum: I think there’s a little bit of something else in play here. That’s a, like a cultural change, right? So with the newer generations of workers coming into place, I think it’s, everybody’s a little bit more, Oh, you gotta be a little nice, got to dance around a little bit and kind of, um, make sure their feelings aren’t hurting at the, where the older generations of workers were just kind of like, you could lay it to people bluntly and they would just kind of carry on.
Um, so I think that there’s a little bit of a difference with the younger workforce coming into play where they’re intermixing with everybody and working great and bringing new ideas. Cool. But you know, some, some people you got to handle more with like kid gloves versus being able to, um, you know, really say what you want to say, I think is the difference.
I guess I like it to like, my brother was, my brother was HR in the military and he retired after 20 years. Uh, and I was like, oh man, you’re a shoo in for any kind of position you want. He’s like, no, I’m not because he can’t do HR in the real world like you do it in the military. Um, so he’s like, yeah, you kind of get, you know, it’s not going to work.
And I think it’s kind of the same thing. You have, uh, you’ve got these different dynamics in play in the workplace that, uh, a little bit more care of people’s feelings, uh, these days than there used to be.
Allen Hall: Yeah, I think as an employee in those situations, I’m much more on Phil’s side on this than, than I typically see out in the rest of the world.
Protect your backside all the time. Always be looking behind you to make sure, uh, it’s going like you think it’s going and always generally have an out plan. Maybe because I worked in aerospace so long that airplane programs were notoriously, um, going to run out of money much sooner than they thought.
And you could feel it, because the amount of work hours would increase. So it was generally 40, and then it became 44, then it was 50, then it becomes 60, and you’re like, all right, now I’m approaching 70. Okay, this is, we’re not, nothing is progressing any faster for us working all these extra hours. What’s about to happen?
Well, what’s about to happen is they’re not going to pay you, and then all those hours will just go poof. Uh, that was always the downside of that. In today’s world, I do think. Mostly because of the pandemic, that there’s, uh, it’s a, it’s a hard place to be. Everybody was sort of laid off for a little while because of the pandemic, and they don’t want to be laid off again, so they’re pretty sensitive about it.
And they’re trying to figure out a way to navigate that. I always, for engineers, I always recommend, like Phil said, have a plan B. Whether you re enact it or not. Always have a plan B. Always be making a plan B. If your plan B is so so, then have a plan C and a D. Always, because things change. And as Phil pointed out, Clipper was a great company.
I remember working with Clipper back in the day. And early on, it was like, wow, this is cool. This is good stuff. And then all of a sudden, it just didn’t. You don’t want to be there. And Phil’s not, right? So that’s a good example of pay attention to what’s going on. This week’s Wind
Joel Saxum: Farm of the Week is Red Barn Wind.
It’s an elite clean energy site down in southern Wisconsin and it has 28 GE 3. 4 140 kilowatts. Turbines. So it’s 92 megawatts. There’s enough to power about 32, 000 homes. And one of the things to touch on here is during construction of this site, they used slag cement and slag cement is an interesting product because it’s actually.
Partially recycled. So when they’d use slag cement, it’s uh, it actually increases some of the performance of the product. But it, uh, they take it from industrial usage and they pulverize the powder and they supplement it for cement. So this one actually had about 50 percent, 50 percent slag cement, 50 percent regular cement.
But it is a recycled product that went into the bases of these turbines. So that’s pretty cool. Uh, they employ 250 people during construction and about 10 people during full on operation and the power goes, stays right in there in Wisconsin. So Madison Gas and Electric is getting some of it. Wisconsin Public Service is getting some of it.
WEC Energy Group gets the rest. So, uh, it’s a pretty cool project that they use some recycled materials for there in Wisconsin. So, um, and Red Barn Wind
Allen Hall: from Elite Clean Energy, you are the wind farm of the week. That’s going to do it for this week’s Uptime Wind Energy Podcast. Thanks for listening. And please give us a five star rating on your podcast platform and subscribe in the show notes below to Uptime Tech News, our substack newsletter.
And we’ll see you here next week on the Uptime Wind Energy Podcast.
https://weatherguardwind.com/orsted-ceo-shell-atlantic-shores/
Renewable Energy
ECO TLP Brings Concrete Foundations to Floating Wind
ECO TLP Brings Concrete Foundations to Floating Wind
Nicole Johnson Murphy, CEO of ECO TLP, and Gordon Jackson join to discuss concrete floating wind foundations, production-line construction, and markets from Hawaii to Japan.
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Allen Hall: Offshore wind obviously is a big deal right now. There’s a lot of, uh, countries looking at it and investigating it, doing it, uh, but not really at scale yet. And this is where ECO TLP comes in and. Nicole, let’s just start there with a background. What problem were you trying to solve when you started Eco TLP?
Nicole Johnson-Murphy: Yeah, so, so we were designing for, uh, a site off of Hawaii in 2011, uh, for the Hico RFP. And so we were designing for 300 meter water depth from the beginning. Um, so we were always trying to find a way to work with the ports, with the vessel, with the infrastructure that was existing off Hawaii. And with, and that worked with Jones Act vessels.
So we were always trying to meet that [00:01:00] requirement with, you know, and meet the cost, try to, we saw there were much tighter margins in offshore wind than in oil and gas, for example, at that water depth. So we’re trying to find something that was cost effective.
Allen Hall: Next question, obviously is what makes those deep water foundations so difficult?
Gordon Jackson: Well, it’s the water depth, uh, primarily, um, you know, uh, you need to put foundations down in, uh, extremely deep water. Um, and they’re gonna be pretty flexible. Um, so you’re trying to control the, the amount of motion that you get at the surface through your, uh, uh, you know, your deep water, uh, facility. So, um, it’s really.
Really that challenge, you know, and, uh, you know, the weight of components through the water depth, like, um, you know, likes of chain would be completely impossible. Um, in 300 meters of water. Uh, you need to use something that’s a little bit lighter. Yeah, to mow you to the, uh, to the seabed
Allen Hall: [00:02:00] because it does seem a little odd just not to make the foundations taller, basically.
More steel drive it down in, we know that process, we understand that process. It works offshore, uh, near shore in a, in a lot of locations. But once you get to what depth as it becomes financially or engineering wise, impossible
Gordon Jackson: for offshore wind, fixed, fixed structures in, I mean, maybe a hundred meters of water are gonna be.
Economic. Um, but you know, they’ll be costly compared to what’s been done now because, uh, you know, of all the extra structure you need for the, uh, for the deeper water. But, uh, I think you’ll see, you know, a crossover between fixed and floating, you know, around the, um, you know, 70 to a hundred meter water mark.
You know, that’s sort the range.
Allen Hall: Well, and that leads to the next question, which is. It’s all financial, right? At some point, the numbers [00:03:00] don’t work. If the cost of foundations don’t come down, especially in fixed bottom offshore or floating offshore, we lose a lot of offshore wind resource. Uh, Nicole can, can you gimme a scale at what we’re missing if we don’t get to a more economical solution for floating offshore?
Nicole Johnson-Murphy: So we’ve estimated for our market for, um, a very deep water market. So we, we now actually have a, a solution that goes across all water depths. So we’re starting with, um, you know, this, this gravity based structure now with, and, and Gordon’s team has been really involved in that, uh, development. And then now we can take that same slip form, concrete cylinder.
Format and take it across all the water depths. So, so we basically can hit every water depth now for a very low cost. It’s a very simple, just, you know, local, regionally designed and built, uh, system. We, we crowdsource the labor and the inputs. Um, and so we [00:04:00] try to, and we also try to give the procurement team of our clients their, you know, an ability to do their job and, and be able to bid out aspects of our design, um, across.
Different vendors. So you always wanna give, in construction, you always wanna give, uh, the procurement team a job to do so they can actually get that price, keep that price down on the installation.
Allen Hall: Yeah, that’s a unique look that eco TOP is putting to this problem. Which is moving away from steel, which is expensive obviously, and it’s sort of difficult to transport at times to a more localized solution, which is concrete.
And thinking about the problem a little bit differently, does that open up a number of doors then in terms of the countries that can get involved in, in floating or near shore, uh, wind projects, but just because you’re driving the cost down?
Nicole Johnson-Murphy: Absolutely. And I’ll let Gordon speak to the ax. He’s worked. His whole career in offshore concrete.
But I think it’s, I think it’s a, it’s a great, it’s the only way we would do it. We actually have shipyards in our companies, our partners own [00:05:00]shipyards, and we, we just would never probably ex try to try to create this many units across the world and scale and steel. We’d only do concrete.
Gordon Jackson: Yeah. My first concrete project sort of broke the mold of how you do, uh, construction of concrete offshore structures.
Uh, it was entirely built within a dry dock and, uh. After we’d gone on and delivered that project, um, that was in the late eighties. I spent the next 10 years, uh, working on projects all around the world, looking at doing the same sort of thing in different countries. Um, because you, you only needed, you know, 10, 12 meters of water, um, at the shore and you could, um, build a structure and um, you know, get it out there in the water.
Um. It really opened up the market for, for offshore concrete structures that, uh, that, uh, first project that we did.
Allen Hall: So using that first project as leverage and knowledge of how to do these things, how much advantage [00:06:00] does concrete give you over steel?
Gordon Jackson: It, it’s difficult to say because it bends country to country.
Um, and, um, you know, quite often you’re competing against, um, you know, steel built in some, uh, very low cost fabrication countries. Um, so if you’re in a high cost, you know, high labor cost country, like, you know, I worked in Australia, um, and um, you know, the labor cost there was extremely high. So concrete wasn’t particularly cheap, but the overall solutions that we came up with, um, were cheap.
You know?
Allen Hall: So does that involve basically like slip forms or how are you, how are you thinking about that problem? Because it’s a huge engineering task and you only learn. By doing it on some level because all great plans, uh, always run into trouble as soon as you try to implement them. So you took all that previous knowledge and then applied it to this problem, and now you have, uh, uh, basically [00:07:00] trimmed or, or slimmed, uh, the design down into, you have a, a very economical model, even in more uneconomical economies because of labor laws and cost of labor and access and those kind of things.
What does that look like now? And what’s your thought process on, Hey, this is what it’s gonna look like? Can we get, uh, keyside, how do we do this and how do we keep this thing simple?
Gordon Jackson: Uh, well the key thing is we’re looking at, uh, a production line approach, which has been, you know, it’s tried and tested for, um, for marine, for marine concrete construction, you know, construction of key walls and um, and you know, the like, um, we’re using exactly that same system.
We’ve just been tried and tested to create a production line of, um, eco TLP units or eco GBS units where we’re building, you know, onshore and where we’re going from station to station, doing a task at each station. [00:08:00] So it’s exactly like a production line, um, you know, that you’re be familiar with and, you know, you load out the completed structure onto a, a barge, um, and then you.
Submerge that barge and your structure floats off and that’s, that’s the real key to getting the, uh, the economy from the, the concrete basis.
Nicole Johnson-Murphy: Yeah, and I’ll say that the opex is really something we focus a lot on because it’s, it’s not just what you’re doing on the CapEx and the development and the port, it’s actually that 30 year lifetime maintenance.
And this is a, when you, we fully submerge our floater, which is basically inert in the ocean. It’s, it’s very eco-friendly with the ocean. There’s no paint, there’s no, you know, maintenance on the floater over the lifespan. You’re, you’re monitoring those, the moorings and the, the weight of any marine, you know, buildup on those moorings and things like that.
But generally it’s a very low maintenance solution and it’s very heavy and kind of like a comfortable car [00:09:00] ride for the turbine. It, it really has slow motions. It, it’s, um, almost like a, you know, a high skyscraper in the water. You know, you’re just the top of that skyscraper is moving a little bit. But you’re, um, you’re really giving it that comfortable, slow ride over its lifetime.
It’s not hitting a lot of turbulence, like a, a different type of odor.
Allen Hall: Yeah. It is a different concept, really, right? That you have this mass at the bottom and you have this mass at the top, which is the, the cell on the wind turbine. And if you can design it just right, everything dampens becomes stable.
Even in turbulent water. How long did it take you to figure out that aspect of the design? Because it does seem like a lot of projects hit a, an end point right there because the motion of the turbine is not good for the lifetime of the turbine.
Nicole Johnson-Murphy: We, we look at it as a, a kind of hybrid spar, CLP, so, so the original design came from my late father who was, who had designed echo fis for children’s [00:10:00] petroleum in the early.
Uh, late sixties, I guess. And, um, so he’d come from oil and gas and he’d come from that concrete, uh, construction background. And, and he is very comfortable with it. And I think, um, Gordon, that’s part of why I like working with Gordon. ’cause Gordon has that same, uh, sort of long-term view on, on these construction principles.
Um,
Nicole Johnson-Murphy: and I think that, that what we saw though is the margins are so different from oil and gas, and so you have to have almost a poor man’s TLP is what we would call it because it’s. It’s gotta be a very simple version of A TLP that can roll out in mass quantities. And, and as you know, coming up with a company that, you know, business plan, you’d wanna be able to, to really scale the business.
And so we had to come up with something that you can make. In different parts of the world at the same time, you’re not tied to one shipyard or one construction.
Allen Hall: Well, even in terms of ship usage, you’re going to reduce the size of the ship considerably. You’re not using big dedicated ships that are really [00:11:00] expensive to operate or to keep in the area, even just to have them there as a lot of money.
You’re thinking about, uh, a different design in terms of. Simple ships that you can find locally. How much does that really lower the cost of deployment?
Nicole Johnson-Murphy: Quite a lot actually. I, I mean, it depends on, you know, so the other, there’s this other, other aspect of installing the wind turbine on the foundation. So we have this fixed to fixed platform concept where you come further, a little bit further offshore and, and give you that, that draft depth that we need.
And then we have a fixed platform that just stays in place and, and we bring the turbines to it and, and float them out. It’s all a self floating. Unit, whether it’s the GBS that, um, Gordon’s been working with us and or the eco TLP. So we, so we we’re really independent of those large vessels. Um, for the most part, you know, we’re, we’re really try and then you, once you install the turbine, you can tow the entire unit out with two tugs.
Two to three tugs.
Allen Hall: That’s remarkable. So essentially because you [00:12:00] used, uh, a basic. Uh, Henry Ford type process to, to create these foundations and to think about the problem differently. Not only can you deploy it, uh, easier than a lot of things we’re doing right now on top of it, it works over a variety of depths and I think that’s a the hard thing for people to grasp because when we talk about offshore particularly start getting off the continental shelves here, you’re talking about.
More than a hundred meters typically of water. But you also have a, the gravity based system and the TLP system are all sort of interconnected into the basic philosophy. Can you, can you explain like the, the, the backbone of how that engineering works?
Gordon Jackson: Uh, well it’s essentially, it’s, um, we’re using the same structural form in both, both fixed and floating.
It’s, it’s basically, it’s two cylinders, uh, you know, one inside the other. A little bit of structure, which joins the two cylinders together. Um, that’s it.
Allen Hall: Gord, you make it sound so simple, but the, the [00:13:00]engineering is complicated to get to that point. And once you get to that level of, oh, that design actually works in a variety of depths, that opens up your customer base quite a bit.
Have you had inquiries from sort of nearshore people? Or fixed bottom people thinking like, whoa, I could actually save myself a bunch of time and money, which is the, the real limiting factor on offshore wind at the moment. Are you starting to see some momentum there that, uh, operators, developers are starting to rethink this problem and not just do what they did last week?
Nicole Johnson-Murphy: Absolutely. I mean, one of the ways we came about the g you know, taking the Ecot P and transforming it to the eco GBS was, was recommended by a client, was, you know, that was their, their ask actions. That’s, that’s always the best way to start. A product development cycle because, you know, somebody’s interested.
Um, and I think, you know, and part of the reason I found Gordon to work with early on in our, um, the life of our company is, is his background in, in GBS development. He did, he developed the gravitas, uh, GBS [00:14:00] 10 years ago. So I think we, we got lucky that our, uh, civil structural engineering partner with AUP was, was already really comfortable with, you know, looking at this.
Allen Hall: Um,
Nicole Johnson-Murphy: so I think that’s, that’s part of, you know, you always want the clients to be interested, you know, before you start investing. You know, you don’t wanna design a product that’s in your head or your, you know, in your, in your company lunchroom without a real ask for it.
Allen Hall: Right? And I, I think also you have a, once you have the engineering pretty well done and.
Obviously do now you’re trying to touch a number of countries and every culture has its own way of, of one of the construction business to do it slightly differently. South Korea does it different than Scotland, for example. You are working across cultures and trying to make the the same design. Uh, apply to all those different areas.
Are, have you learned [00:15:00] some things from that? Is it, are you able to basically set the same assembly line in every place? Or, or are there different, different kinds of concrete, different kinds of access, different kinds of ports that you have to deal with? What are those variables there that, that change the way you do business?
Gordon Jackson: All the characteristics, ports are, uh, you know, obviously different. Um, but you know, really you just need space. Um. And access to reasonably deep water. Um, you know, from, from that, uh, from that space. And, uh, you know, it can get surprisingly difficult to find that, um, certainly in the UK and, uh, you know, in Northern Europe, people wanna build marines and, uh, waterfront living, uh, rather than having, uh, you know, an industrial facility, uh, you know, on the doorsteps.
So, you know, in, you know, developed countries. Um. It can be hard to find that space. But, um, you know, in some, some parts of the world, you know, there’s lots of [00:16:00] space, um, available. Um, some good port facilities that can be, can be utilized. Uh, and then it’s just in, in all civil engineering works, you know, um, you go to do the job, you go wherever the job is, you mobilize there.
Um. You know, you put in the systems, uh, and equipment that you need to build, build a structure, and then normally you go away at the end of the job, you know, you hand it over to the client. Um, you know what, what, um, what would be good here is if we could set up some regional centers where you’ve done the, done the investment in the yard, um, and then you can, uh, you can amortize those costs of development over a number of projects.
Then you should start to see, uh, you know, real, real good cost savings.
Nicole Johnson-Murphy: Just one thing, you know, our footprint of our, of our cylinders is about a third of the footprint of a semi sub, for example. So, [00:17:00] so our footprint on the land port is very small.
Allen Hall: Well, I think that makes sense because if you watch the fixed bottom projects, particularly in the United States.
The first thing they had to do is rebuild the ports. The ports weren’t set for the scale and so they needed to expand the ports. That means you have to acquire land, you’ve gotta develop it. There’s a lot of processes involved. ’cause you’re talking about city, state, and federal government being involved.
Obviously federal in the United States is a problem. Uh, so just getting the port developed was a huge process for. Fixed bottom. You’re thinking about that differently though, because the, the reduced amount of space, the, uh, you don’t have to be in a huge industrial area, but all obviously it would be nice, but you do run against that problem.
Are you thinking, uh, when you talk about regional centers, are you thinking kind of Mediterranean, west Coast, us, Australia, one in Japan? How do you think about that problem? Because. [00:18:00] Once you get a a site established, it does seem like because of the, how fast you can move these things around that it’ll become a pretty good job center for a lot of people.
Nicole Johnson-Murphy: Yeah. There’s a long-term maintenance, you know, crew that needs to be developed while we build these. Um, yeah, I think, I think, you know, it’s been a moving target of what’s really gonna develop in offshore wind. It’s like Lucy and Charlie Brown with football. I think we, we constantly try to, you know, get lined up to, to kick football and then it falls.
It’s more of the developers I, I feel for on that ’cause they’re these investing tremendous amount of money for these, these development sites. Um, so, you know, we are open to any, you know, we’ve been, we’ve looked at, um, some developers are looking at steel production and concrete production, you know, two different reports servicing.
An array and we’re really flexible. It doesn’t, doesn’t matter. When we first started on that Hawaii project, we were gonna do floating pla, you know, floating, um, [00:19:00] barges to slipform. And, and we talked about that with Arab. Some still this floating dock idea and, and submerging that dock. And it’s just a matter of finding the right, uh, a large enough, um, dock for that type of, so then you’re not even using the land base port.
You’re learn, you’re using kind of just to. Maybe a 400 foot frontage on the, on the, along the port.
Allen Hall: Well, that’s amazingly small, right? Because if you look at some of these ports right now that are doing, uh, fixed bottom offshore, they’re massive, they’re huge sites. You’re talking about something roughly a 10th of the scale to get the same end result, which is turbines in the water
Nicole Johnson-Murphy: for our part of it.
I mean, we still, you still have the components and, and those are, that’s a, it’s another logistical challenge, and so I understand why the ports are. Looking at a lot more lay down space and things, but you know, maybe at a certain point these components are so large that they just stay on a vessel and they, and we, we take them off of a vessel directly and load them in.
Allen Hall: Yeah, I think that’s one of the, the considerations [00:20:00] is do you really tie it to land in, in terms of needing a, a massive amount of space, acres of space, thousands of square meters of space. Do you need that or is this, or can you do it much more efficiently because that overhead adds up over time. Not only are you trying to save on, on the ships and the, especially the dedicated ships, you’re also looking at smaller footprints on shore and doing it a lot more economically.
What does that future look like now, because it does seem like we’re at a precipice where floating wind is no longer just being discussed. In theory, it’s, it’s going to be implemented. What are those next steps here for Eco TLP?
Nicole Johnson-Murphy: So next week we’re headed to Tokyo, to Japan for the wind. Expo and, um, Eric is also presenting at the Asia Wind Offshore Show.
Um, I think we’re, you know, we’re, we’re good to learn. I mean, there’s just so much to learn about each culture, and I think this is something that, you know, Gordon and I’ve talked about in terms of these international [00:21:00] projects, you’ve, you’ve gotta understand your culture that you’re moving into and you’ve gotta understand how to mediate across those different companies that come in.
Our company has seven different. Countries represented in our team. So right now, so, so we’re, we’re a US company, but we’re barely, you know, we’re just kind of by name, but I think most of our team members are, are not in the us and, and that’s international collaboration is something, um, I, I really, I really loved working on it.
And I think, so when we go to Japan next week, it’s really mainly just to learn. You know, we don’t. We have a lot to learn about Japan, and, and that’s what’s fun about each of these, these regions.
Gordon Jackson: And that’s where we can help because, uh, you know, we’ve got a presence in Japan. We’ve been doing offshore wind in Japan, so we’re there, we’re there to help eight to eco TLP with our, those little contacts and uh, you know, h do business, uh, uh, in Japan and things like that.
So, you know, [00:22:00] we have a big international network, so you know, it can help. Some, uh, in some areas, you know, open some doors and, uh, forge some, uh, some friendships between, uh, count companies.
Allen Hall: Courtney did a big project out in Perth, Australia, which is a difficult place, right. Australia is a very difficult place to manufacture things.
What are some of the lessons learned and and what was that process like?
Gordon Jackson: So he had a, a client, uh, a very small client who was prepared to. Seed responsibility for delivering his project to a, to a team, an alliance team. Uh, and he just, um, interviewed a number of teams and, uh, we were lucky enough to be selected, uh, as the team to deliver their project.
There was no tendering, uh, it was just done on, you know, how the, how the client felt about the, the individuals that he met. Um, and that, that was [00:23:00] very new to me. Um, and, um, the whole project was delivered, uh, by companies from the uk, from from Australia, from Singapore, uh, from be Netherlands, you know, the Marine, uh, the marine, uh, vessels.
You know, a lot of ’em are coming from, uh, from, uh, Northern Europe, uh, even though you’re in Australia. Um, and, um, you know, every company wants to do things differently and they all want to look after their interests, but the big thing about this alliance project was that, uh, you were, you were focused on one particular project and we were, um, we were coached and, and facilitated, and trained to, um, to throw away our, you know, our company affiliations and work together.
And, uh, you know, to collaborate together. And, um, [00:24:00] you know, we’re all working towards the, the end goal of delivering a particular product. And I think that’s, I think it’s got a lot of, um, lot of potential to be used in the offshore wind sector. This, this was, uh, you know, uh, an oil platform that we were gonna build on the, uh, the northwest shelf of Australia, um, which happened to be built in concrete, um, because the client.
The client came to us with a, with a, a notion of, of doing something in concrete, um, which we, we took his idea, uh, decided we could do something a little bit cheaper and more straightforward and, um, you know, went on to deliver it. We were given the opportunity to deliver it. And, uh, yeah, I, it was my best project.
Uh, it was a tremendous experience for all the companies involved. And you know, everyone made money so everyone’s happy.
Allen Hall: That is difficult, right? You, you do see on these offshore projects, people coming from around the world to [00:25:00] work on this one big effort, a lot of money, and at times, thousands of people involved.
You see companies stu stumble there, uh, obviously because you’re trying to tie cultures, you’re trying to tie companies together, but at the end of the day, you have to get this project done. Are, are there some top level lessons learned from that of, of how to bridge those differences?
Gordon Jackson: Well, I did another project, uh, this was a, a steel project, um, where we had a, a US oil company.
Uh, and, um. The successful contractor was Hyundai in Korea. And they said to, said to me over the course of the project,
Nicole Johnson-Murphy: uh,
Gordon Jackson: we always lose money with, um, with American oil companies. You know, why, why are we doing business with them? Uh, and it, and it all came down to the, you know, the, the approach to the [00:26:00]contract.
You know, um, Hyundai used to. Working in a more collaborative way with our clients, whereas, you know, this project, you know, this is what the contract says, this is what you’ve taken on to do, you know, there’s no negotiation, you know, you’ll do it and that’s how much money you’re getting. And, uh, you know, um, but they find that very difficult.
And, uh, it was at the time when they were sort of opening up their business more internationally. Um, and I think it was a big learning experience for them. Um. So, yeah. Um, I think a lot of the offshore wind tried to follow the same path and, um, yeah, I think more collaborative working is to be encouraged for me.
Um, you know, more talking to each other and negotiating rather than, uh, you know, imposs.
Allen Hall: Where should developers go to find out more about Eco TLP? [00:27:00] Because you have a gravity based system. You got attention lake platform, there’s a, there’s a lot inside of the company. What’s the first stop? Should they visit your website?
Should they connect with you on LinkedIn? Where do they go?
Nicole Johnson-Murphy: The LinkedIn where website is great.
Allen Hall: So go visit Eco TLP. It’s E-C-O-T-L-P. Com, Nicole and Gordon, this has been a great discussion. I’ve learned a lot. It’s very exciting because I think you’re on the precipice of something great. So thank you for joining me today.
Gordon Jackson: Thank you. Thank you.
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