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Wood hits the sustainable energy trail

Wood hits the sustainable energy trail
Not many months ago, Aberdeen's largest indigenous energy services player, the Wood Group, launched a subsidiary dedicated to renewable energy and upped the commitment to growing its already substantial involvement to carbon capture, including examining and seeking to cut the size of its own carbon footprint.

Not many months ago, Aberdeen’s largest indigenous energy services player, the Wood Group, launched a subsidiary dedicated to renewable energy and upped the commitment to growing its already substantial involvement to carbon capture, including examining and seeking to cut the size of its own carbon footprint.

Mike Straughen, chief executive of engineering for Wood Group, likens the company’s decision to engage with the world of sustainable energy to the decision taken some 40 years go to seek business in the then new North Sea offshore industry. At that time, the Wood family’s stock in trade was the fishing industry.

“We’ve built up a really good capability in oil&gas that has created very transferable skills for renewables,” Straughen told Energy.

“Could we have done it earlier? Possibly. We’d been keeping a watching brief for some time. We certainly recognise now that we have real value to add to that industry and have taken some key steps in that direction, particularly in the last year.

“We created a renewable energy business, particularly around the issues of turbines and turbine maintenance, improved efficiencies and so forth. We also launched a marine renewables group within JP Kenny, which is a world leader in aspects of subsea engineering.

“We think the time is right from a group point of view, the way it has evolved and from the skills we’ve built up, and I think also from the industry point of view. Through our involvement with things like the Beatrice windfarm we’ve gained some good experience, and that remains the only real deepwater wind project operating in UK waters.”

Straughen accepted the fact that Wood Group today was a lot more prepared for the new energy future than it was when, as a traditional fish-catching and processing business, it took its first steps into the offshore industry.

The start point is that Wood Group is a highly experienced, multifaceted energy services group with a huge amount of experience in turbines, albeit gas turbines, and these are of huge relevance to renewables because they represent high-end rotating machinery skills and experience.

Straughen said there was no question of people splitting their jobs between oil&gas and renewables.

“We’ve appointed senior managers to lead these key aspects of the business … we’re not doing it as a sideline. We’re making it the day job for such people … to get in front of the customers involved in the markets … developers, operators, equipment providers and utility companies.

“These are mostly internal appointments so far because we want to bring our pedigree of skills to this sector. As we move forward, we may need to bring people into the company for some areas. What we’re bringing to the market, especially offshore wind, are our offshore skills … engineering, construction, maintenance, turbine overhaul.”

But what do offshore wind developers think of companies with oil&gas skills muscling in. After all, they have all too often shown a marked reluctance to engage as anything to do with oil is seen as expensive and saddled with overly burdensome HSE regulation.

Straughen, who has a long oil&gas pedigree, reckons the reception has been mostly good – witness JP Kenny securing the front-end engineering and design contract for the marine renewables Wave Hub project off the north coast of Cornwall.

“We’ve been involved in that for the past six to seven months doing the FEED, with a view to them rolling that through into the detail and actual project engineering.

“What they (the South West Regional Development Agency) were looking for in that particular case was people who understand offshore engineering, subsea engineering and subsea construction, plus cabling, and so on. It’s a great opportunity for us to demonstrate how our skills fit into this new market.”

Turning to wind turbines, Straughen said: “The market is still developing … it hasn’t really got through into the next phase of maintenance and overhaul.

“However, we’re having some really good conversations, both with OEMs (original equipment manufacturers) and the facility operators in terms of how we can help them.”

This means dialogue with companies such as RePower, two of whose turbines were used in the Beatrice demonstrator project, for which Wood Group is effectively duty-holder anyway.

“The demonstrator has been a phenomenal project for us,” said Straughen.

But surely Wood faces other would-be players in the emerging offshore wind operations and overhaul market?

Yes, but at this time, the competition comes mostly from the OEMs, which maintain turbines on fixed-term warranties.

“The after-sales market has yet to develop. So what we’re bringing to the party is many years of experience on the gas and steam turbines side … a position of strength as probably the leading independent player globally in that market.

“There will be other people … the OEMs themselves may want to move into the after-market and establish maintenance divisions. Windfarm operators may decide that is something they want to do, and there will doubtless be other contractors who may try to get into that, too.

“We think there’s a good opportunity for us to differentiate ourselves on the basis of the skill sets that we have.

“However, while we’re positioning for offshore, we’re also in dialogue with some existing (UK) onshore farms. We’re already making good progress with this in the US, where around 30 people are currently involved.”

Ironically, Texas is a US hotspot, a state that is also a traditional home for the oil&gas industry.

Now that real headway is starting to be made, it may be only another three to four years before the population of offshore devices passes the 1,000 mark in the North Sea.

Energy believes that will put pressure on the turbine manufacturers and operators to ensure there are competent contractors experienced in IRM (inspection, repair and maintenance), but that they are currently nowhere near that today. And Straughen agrees.

“That’s where we see the opportunity,” he said.

“I think the market should ramp up, but not in the short term. As the UK progresses to Round Three projects, then we should see a ramp-up.”

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