Background information

Like a Journey to the Moon

Authors: Frank Reichert, Robert Kunze, Saman Kitvarametha

The much-cited “energy transition” is on everyone‘s

lips, and has been even before the Fukushima nuclear

disaster. Inner-European greenhouse gas emissions

are to be reduced by at least 20%, energy efficiency

improved by 20% by way of energy savings, and

the share of renewable energy in the total energy

consumption raised to 20%. The German government

even aims to raise the share of renewable energy in

power generation to 25-30% by 2020. High hopes are

being placed on offshore wind energy in particular.

The German government‘s resolution in the “National

Renewable Energy Action Plan” envisages 10 GW of

installed output in offshore wind farms by 2020. By 2030,

it is even planned for offshore wind farms with a total

output of 20-25 GW to be set up in the North Sea and

the Baltic Sea. These farms alone could cover approx.

15% of the electricity requirements in Germany, which

equals an annual electricity yield of 85–100 TWh.2

German Offshore Wind Power Projects (in MW)

Source: dena, Barkawi Research 2011

North Sea

Operational 51470

17,620

24,616

Approved 2,318

Awaiting approval

2,295

Baltic Sea

An ambitious goal, considering that a mere 470 MW of

installed output are in operation by now. But in order

to reach the objective set by the German government,

based on the current state of affairs, approximately 3

MW of offshore power would have to be installed every

day between 2012 and 2020 – a requirement that is

currently by all means utopian, as it currently takes

an average of 6 days to install 1 MW of output. The

government‘s objective thus seems to slip out of reach.

1 Interview with representatives of RWE Innogy GmbH; July 21, 20112 German Federal Ministry for Environment, Nature Conservation and Nuclear

Safety, 2011

Apart from that, however, the odds are favorable, as

the North Sea and the Baltic Sea are regarded as being

among the most promising offshore wind areas in the

world, and the initial tariffs for the first twelve years

have recently been raised from 13 to 15 euro cents per

kilowatt hour.

More and More Players in the Offshore Logistics MarketNot only constructors and operators of offshore wind

farms would benefit from growth, but also maritime

economy, navigation, ports and shipyards. But growth

in Germany is stalling. The German special way of

doing things is regarded as one of the reasons. While

the construction of wind turbines on the open sea is

definitely planned, they should not be located within

eyesight of the shore. As the turbines move further

away from the land (approx. 30-100 km) and the

waters grow deeper (20-40 m), the total costs increase.

Bureaucratic obstacles with diversified responsibilities

in municipalities, counties, and environmental agencies

lead to especially tedious approval processes. Another

reason development is impeded is the slow expansion

of the German electricity grids.

100 billion euros: this is the total sum that is estimated

to be invested in the offshore wind market by the year

2030. The sum includes investments in wind farms and

their grid connection, areas of maritime installation and

service, and port infrastructure. Logistics services in

particular play an important role during the life-cycle of

an offshore wind turbine, because apart from turbine

purchase costs, grid connection and the foundation,

logistics contributes one of the largest shares of the

necessary investment in an offshore wind turbine.

Considering the presently active wind farms, those

already approved and those currently under review for

approval, there is enormous offshore logistics potential

which consists of logistics services until startup and

logistics services pertaining to support and maintenance.

Depending on the respective logistics concept, the

strongly fluctuating logistics costs comprise between

Like a Journey to the Moon

Half-baked logistics concepts and communication „by acclamation“: offshore wind logistics might turn out to be an unpredictable blind flight. RWE Innogy GmbH, a German company specializing in renewable energy, even states, “Compared to onshore logistics, offshore logistics is like a journey to the moon.”1

Source: Barkawi Management Consultants

Development of Costs over the Course of the Individual Logistics Phases in the Onshore and the Offshore Sector

SupplyPlanning AssemblyProduction Transshipment Installation Service

Procurement logistics

onshore onshore

onshore/offshore

onshore/offshoreoffshore

onshore onshore onshore/offshore

onshore

onshore

Production logistics Installation logistics Service logistics

24-36 months 12 months 12 months 18 months 240 months

Average duration of process steps when constructing a medium-sized offshore wind park

Cost development offshore logistics Cost development onshore logistics

5% and 15% of the CAPEX of an offshore wind turbine.

This gives rise to different scenarios for the total logistics

potential: Barkawi estimates the logistics turnover

potential at 12 to 31 billion euros.

In this calculation, erection logistics represents the major

part of the total potential, with the biggest cost drivers

being the charter costs for installation vessels. It remains

to be noted, however, that the specific characteristics of

any offshore wind turbine (water depth, distance to the

shore, service concept: shore-based; vessel-supported,

shore-based helicopter-supported; sea-based, etc.)

significantly affect logistics costs. Just under 90% of

that potential can be attributed to projects in the German

North Sea3. In addition to project planners, wind turbine

constructors such as Enercon, Siemens or Vestas, and

energy suppliers such as RWE or ENBW, numerous

large and small logistics service providers are trying to

jump on the band wagon and use part of that potential

for themselves.4

Logistics on the Open Sea is ComplexAlongside grid connection, funding and

technology, logistics is the fourth key

challenge in the offshore wind energy

sector. At first glance, the logistics

process in the offshore sector is strikingly

similar to that in the onshore sector. In

both cases, the process can be broken

down into four main areas: procurement,

production, installation, and service

logistics.

3 Barkawi Management Consultants4 Windenergie soll Seehäfen pushen [Wind Energy to Push Seaports] –

WirtschaftsWoche, http://www.wiwo.de/unternehmen-maerkte/windenergie-soll-seehaefen-pushen-466792/, Christian Schlesiger, May 27, 2011

The “installation logistics” step, during which materials

and staff are transported from the ports, is the biggest

cost driver in the entire logistics process. The share of

maritime logistics accounts for approximately half of

the significantly higher costs as opposed to the onshore

sector. The domineering force here is a sellers‘ market:

specialized vessels are scarce; moreover, the required

capacity clashes with the undwindling demand from

the oil and gas industry. Wind farm operators thus

currently pay at least 150,000 euros a

day for an installation vessel, plus labor

costs for approx. 60 workers. That is ten

times as much as is incurred per day for

installation units in the onshore business.

But it could be even more expensive:

when the offshore wind farm “Alpha

Ventus” was constructed, the leasing

of the Dutch heavy cargo ship “Thialf”

incurred costs in the amount of a stunning

500,000 euros a day.5 At the moment

there is no acute shortage of erection

units as yet, but experts are convinced

that in 2-3 years‘ time, if the development

continues at the present rate, a veritable “bottleneck”

will occur, as the construction of such facilities is

expected to take two years. Simply settling the high

leasing payments, however, does not help overcome

the maritime technology challenges. The planned

German wind farms in particular, which are supposed

to be erected in deeper waters and further away from

the shore, pose yet another challenge to installation

logistics. Heavier seas and stronger winds show where

the limits of current maritime installation technology lie,

5 Windenergie soll Seehäfen pushen [Wind Energy to Push Seaports] – WirtschaftsWoche, http://www.wiwo.de/unternehmen-maerkte/windenergie-soll-seehaefen-pushen-466792/, Christian Schlesiger, May 27, 2011

Source: dena, Barkawi Research 2011

Potential Sales Volume for Logistics of German Offshore Projects (in Mio. €)

Low scenario High scenario

Erection

After Sales6,847

Awaiting approval

5,074

Approved

19

Opera-tional

18,601

Awaiting approval

Approved

13,782

Opera-tional

19

often forcing operators and installers to improvise time-

and cost-intensive actions. An additional expenditure is

the coordination of the employment of various floating

cranes, some of which have to be brought in and

mobilized from different locations. What exacerbates

the current situation even more is weather conditions

that are worse than was forecast, which lead to even

more unexpected costs and increased shortcomings

in maritime technology. Because while the foundation

can also be installed at medium swell and fairly strong

winds, the nacelle and the rotor blades can only be set up

when the wind has died down – at a place, of all things,

where wind is supposed to be the source of energy

once the turbine is in operation. Moreover, installation

logistics is complicated by a lack of expertise, reflecting

insufficiently sophisticated standardization.

Delays in the Logistics Chain Reduce Turnover and Increase CostsProduction, installation and service logistics all face a

problem relating to surface and capacity. While Dutch

ports – due to their extensive experience in cooperating

with the oil and gas industry for decades and due to the

construction of the first offshore wind farms such as Alpha

Ventus – have sufficient expertise and handling space

for large components, German ports are not prepared

for the offshore boom. Apart from large interim storage

areas for the enormous turbine components, heavy-duty

access roads and harbor edges would have to be built

to facilitate delivery to and loading of the ships. A 250-

MW offshore wind farm made up of fifty 5-MW turbines

would thus have the following dimensions per turbine:

weight (1,500-2,000 tons), rotor diameter (approx. 110

m) and tower height (approx. 90 m). These values mean

that a total volume of around 100,000 tons needs to be

transported. Handling and storage areas close to the

shore are especially important with regard to supplying

the wind farm with spare parts and staff at a later stage.

The costs and delays which might otherwise incur from

longer transport distances that are not systematically

planned not only reduce the commercial availability of

the farm, i.e. the turnover, but simultaneously increase

the costs.

Logistics is the Key to Increased Profitability of Offshore Wind ProjectsAt the moment, offshore wind turbines are three to four

times as expensive as a comparable coal power station.

It is therefore paramount to get to grips with the costs

incurred and to drastically reduce their current levels.

Based on the data of current German offshore wind

projects, a project income return of 7.1% after tax would

apply to an equity-financed model wind farm, taking

the German Renewable Energy Act into consideration.

In light of the technological and logistical challenges

and the even more meager experience in erecting

and operating an offshore wind farm, this income

return does not seem sufficient to cover the specific,

higher risks of offshore wind projects.6 The projects

therefore need to become more profitable. Since the

turnover share of the profitability equation can only to

a certain degree be influenced by higher commercial

availability and larger facilities, the focus lies on the

costs. Costs (CAPEX) per MW of offshore turbines have

hitherto amounted to between three and four million

euros, depending on the project. That value must be

lowered by 25% in order to create long-term investment

security. Otherwise, the profitability of offshore projects

threatens to become so unattractive that it will no

longer be possible to raise any outside capital. After

all, even today the calculated income return of German

offshore wind turbines is distinctly lagging behind other

countries. The logistics service provider DB Schenker

came to the same conclusion: a cost reduction potential

of 20–40% is currently assumed in the areas production,

supply, assembly and transshipment, realized by means

of integrated planning, controlling and supervising of

holistic logistics systems.7

But how can we achieve savings of up to one million

euros per installed MW? What do experts in this field

consider to be the essential factors for successfully

improving efficiency in the entire logistics process?

6 Offshore wind farms in Europe, market study 2010, KPMG7 Interview with Sebastian Peiler, DB Schenker, July 25, 2011

Good Project Planning is the Key to Success Good project planning is of the essence when erecting

offshore wind farms, as the effects of poor planning are

much more palpable than in onshore projects. Small

delays can quickly lead to exceeding both schedule and

budget. Most delays result from insufficient information

and decision-making processes, as well as when the

individual sequential steps in the logistics process are

inadequately dovetailed. To avoid delays it is necessary

to involve all parties concerned more intensely and at

an earlier stage for the duration of the entire logistics

process. Logistics experts in particular are very keen

on being involved in the entire project planning

phase as early as possible, so that they can plan for

the long term and be prepared to react adequately to

any unforeseen events. Hence, all parties concerned

should be involved as early as in the first process

step of internal planning: the viability review phase.

This way, the effects of delays on costs and thus the

profitability of the project can be determined at an early

stage. Efficient voting, coordination and communication

processes must be established and adopted in order

to guarantee a successful outcome. This helps to

make sure that the internal project processes meet the

requirements of each and every player. After all, the

planning of an offshore wind farm requires the same

degree of integrated planning (sequential, parallel, and

continuous) as a large-scale project to avoid delays at

the points of intersection to the greatest possible extent.

If the coordination requirements are to be met, project

controlling must be carried out from a single source.

The factors for successful project planning are therefore

based on those of classic large-scale project planning:

foresight, agreement, coordination, and communication.

Success of German Offshore Ports by Means of Specialization and Cooperation The expansion of the North Sea and Baltic Sea ports has

already begun. There is a clear trend towards an „all-

round harbor“: a port which not only accommodates

interim storage and the loading of large components,

but also offers enough space for production venues and

the storage of all the necessary erection units. Siemens,

for instance, is planning a comprehensive, integrated

production and logistics venue in Ireland. Experts,

however, believe this trend is heading in the wrong

direction. From an economic point of view, they are all

in favor of a specialization of the ports which could be

suitable for the offshore wind market.

Bremerhaven Production of foundations, nacelles, rotors and towers, shipment

Brunsbüttel Potential location for shipment, assembly and production of large components

Cuxhaven Production of foundations and towers, shipment

Emden Production of nacelles and rotors, assembly and shipment

Husum Potential support base for maintenance and construction teams

Rendsburg- Osterrönfeld

Potential location for shipment, assembly and production of large components

Büsum Potential support base for maintenance and construction teams

Lubmin Potential location for production, shipment and maintenance, grid connection point for the Baltic Sea

Rostock Production of nacelles, rotors and towers as well as shipment(onshore), potential location for production (offshore), shipment, maintenance

Sassnitz Potential location for production, shipment and maintenance

Stade Production of rotors

Wilhelmshaven Production, platform, construction fleet location, shipment

Dagebüll Möglicher Stützpunkt für Wartungs- und Bauteams

Helgoland Potential support base for maintenance and construction teams

Source: Barkawi; dena Deutsche Energie-Agentur

Overview of Offshore Port Trends, Needs and Technologies

Expanding ports into all-round harbors would entail

not only uncovered investments but also further

delays of the infrastructure setup: time we do not have,

considering the objectives and the competition with

British and Dutch ports. In addition, competition for the

most promising port areas and facilities would cause

yet a further increase in costs. Moreover, experts see

a danger in setting up excess capacities for the long

term, both in storage and handling areas and space

allotted to installation units. Although expanding port

logistics is immensely important for the growth of the

offshore wind market, doing things simply for the sake

of doing them in all ports, and in an uncoordinated

fashion, would eventually lead to excess capacities.

Therefore experts in the field do not focus on competition

between the ports but rather on cooperation as a

factor for success. The aim of cooperating is to link

the locations and use the focal points of “production,

logistics and service ports for offshore wind parks”8 in

order to provide potential customers with a closely knit,

specialized network of ports. The “Offshore Windpark

Logistik” cooperation [Offshore Wind Farm Logistics],

which consists of ports along the North Sea shore of

Schleswig-Holstein in Germany, is an example of how

tasks can be distributed successfully. The German

ports at Brunsbüttel and Rendsburg-Osterrönfeld act

8 dena Deutsche Energie-Agentur

as harbors for assembling and manufacturing large

components, whereas the ports of Büsum, Dagebüll,

Husum and Brunsbüttel serve as reaction service

ports. The logistics chain is completed by the ports of

Heligoland, Hörnum, List, and Wyk Auf Föhr, which are

responsible for supplies.9 This promising cooperation is

a good example of an efficient port capacity structure

along German shores. The individual ports carry out all

coordination at an early stage, thus avoiding resource-

consuming competition in the medium term and

eliminating the danger of setting up excess capacities

in the long term.

Irrespective of their specialization, German offshore

ports are not only facing challenges pertaining to loading,

but also new challenges in the fields of security and IT.

After all, the targeted objective of 25 GW of installed

output means that an additional 22.510 million tons of

goods will be handled by 2030 and must be included

in and reflected by appropriate logistics, guidance and

simulation systems.

9 Gesamtverband Schleswig-Holsteinischer Häfen e.V. (General Association of Schleswig-Holstein Ports)

10 Barkawi Management Consultants (estimate)

Source: Maritime Technologien Schleswig-Holstein, MC Marketing Consulting, and dsn Projekte und Studien für Wirtschaft und Gesellschaft (Kiel) [dsn Projects and Studies for Economy and Society, Kiel, Germany]

Trends

New IT requirements due to an increase in the flow of goods and transshipment volumes

A growing logistics market, growing network of German seaports, rising requirements regarding port hinterland connections

Global rise in security requirements, increasing requirements regarding maritime security

Increase in seaport optimization and flexibility

Increase in the number of environmental standards and requirements in the port area

Needs (for development)

• Port IT and logistics systems• Simulation systems• Process-oriented control systems• Terminal communication systems

• Slot management• Logistics platforms• Computer-controlled data sharing• Feeder systems• RoRo/ConRo terminals

• Security management• International security services

• Commercial vehicle loading facilities• Cross docking center integrated into

terminal• Planning systems for transshipment

equipment and carriers

• Hazardous goods management• Sustainability strategy for Baltic Sea

ports• Energy management consulting and

services

Technologies

• Port information and communication technology

• Transport and logistics systems

• Security technology

• Port and transshipment technology

• Environmental technology

The Availability of Adequate Equipment must be EnsuredTwo approaches for overcoming erection unit shortages

have proven to be successful, yet they could not be more

different: while RWE purchased two installation ships

of its own11 in order to defy the shortages prevailing in

the competition, Vattenfall continues to pursue a pure

project controlling-based approach, meaning it relies

on commissioning logistics service providers.

RWE‘s installation ships are primarily used for the

erection of the offshore wind park “Nordsee Ost” [North

Sea East]. From RWE‘s point of view, deploying a large

fleet of ships in order to attain better flexibility and avoid

shortages is currently the key factor for success, and

also the right strategy to pursue in the years to come.

However, not all of the companies that are active in

the offshore wind power industry possess the funding

required for such an approach. The costs for a hotel ship

with a four-year delivery period, for example, amount to

120 million euros, while installation ships such as those

recently commissioned by RWE still cost approximately

100 million each. Nonetheless, ensuring the availability

of the equipment required is one of the key imperatives

for successfully implementing offshore projects.

Whether or not it pays off to purchase one‘s own

equipment strongly depends on the strategy chosen

by the respective company. A strategic approach

involving the purchase of its own equipment will give

the company in question a good return if they intend

to realize massive growth plans, as such investment

decisions can be expected to give rise to enormous

economies of scale, meaning they could provide a

high degree of equipment utilization and thus present

a good opportunity for achieving an adequate return

on investment (ROI). Moreover, the owners of the few

existing installation ships can rely on the so-called

„multi-vendor principle“ and rent out their equipment to

third parties whenever they do not need these capacities

themselves. This increases the degree of utilization

and thereby enhances the return on their investment.

Furthermore, this strategy provides companies with a

rare and highly valuable opportunity in the offshore

business: it allows them to gain experience which they

can benefit from in their future projects.

Some of the other UCs12 however, have positioned

themselves as pure project controlling firms and

11 RWE corporate website12 UC = utility company

commission third-party providers for implementation.

Their intention is to create a competitive environment in

order to bring down the costs. Yet in the long run, they

would not rule out that they might purchase their own

equipment, too. However, they would only employ such

an approach if the number of their projects was sufficient

to ensure a high degree of equipment utilization. At first,

this rather cautious and risk-minimizing strategy seems

to argue for reluctant investments in new offshore

projects or seems to be based on the assumption that

current shortages will wear off.

No matter which strategy will turn out to be the preferred

choice of major wind park operators, the impact on

the peripheral industries affected will definitely be

substantial. If the vertical model applied by RWE takes

hold, plant manufacturers will have to face losses for

services provided beyond the warranty periods and

various niche providers currently benefitting from

equipment and staff shortages will be subject to

enormous pressure. However, such comprehensive

structural changes take several years.

Independent of the chosen approach, the demand for

special-purpose vessels and complex constructions will

rise, thus entailing a huge potential for German shipping

companies. Provided that the political and financial

development turns out to be favorable, forecasts project

a market potential from „classic“ shipyard activities

(vessel construction, reconstruction, maintenance)

amounting to up to 6.5 billion euros until 2020. Beyond

these classic activities, a further potential sales volume

from offshore structures (jackets and platforms) of up to

11.5 billion euros can be derived. Simply by exploiting

these potentials, 6,000 jobs on German shipyards could

be secured13 – a potential that especially the economically

battered Baltic Sea regions could benefit from.

Realizing Significant Savings Potentials by Means of StandardizationThe logistics related to the installation of offshore wind

power plants is not only to be regarded as one of the major

cost drivers, but also falls into the project phase presenting

the most substantial challenges. The standardization of

both plant components and organizational processes

during the installation – which is almost non-existent

at present – would significantly contribute to saving

time and costs. The degree of standardization in the

construction of foundations, for example, is virtually

13 KPMG; German Shipbuilding and Ocean Industries Association; Federal Ministry of Economics and Technology; German Shipowners‘ Association; Offshore Wind Power Foundation

zero. Currently, each and every „jacket foundation“ is

a unique piece and hugely expensive. Standardized

foundations are expected to remedy that situation, as

they are supposed to reduce the scale of pre-foundation

planning and the amount of installation work required,

thus presenting a considerable cost reduction. The

gravity foundation developed by the ZÜBLIN company

is a prime example for such standardization. This type

of foundation weighs up to 5,500 tons and sets the stage

for a reduction of installation costs: it allows for series

production.14 A high degree of pre-assembly as well as

production close to the quay are expected to further

reduce the challenges posed to logistics. Standardized

foundations also contribute to a reduction of installation

technology investments, since it is no longer necessary

to have different erection units matching the respective

foundation types available. Standardizing foundations

as well as all related services thus constitutes a major

factor for reducing offshore installations costs, seeing

as these costs make up 25-30% of the total investment

costs for each offshore wind power plant.

Only Few Examples of Best Practice Available So FarModern, coordinated logistics concepts and models in

the offshore wind market allow for cost reductions and

thus influence the profitability of a planned offshore

wind park. Although the automotive industry and the

wind power industry do not seem to have much in

common at first sight, the automotive industry‘s cutting-

edge logistics methods can serve as a role model for

most companies in the wind power industry (and for

all other industries as well). Just in time (JIT), Merge in

transit (MIT) or Just in sequence (JIS), to name just a

few, are logistics concepts that can also be applied in

other industries, as they allow for successful logistics

at low cost. In the case of the offshore wind industry,

for example, weak links in the supply chain can be

eliminated by employing the JIT concept, and a stronger

involvement of suppliers in the overall process can

help to reduce both stocks and costs. Implementing

the JIT concept would make it possible to synchronize

procurement and production, as well as to provide

information and coordination across the entire value-

added chain and among all parties involved.

As opposed to the situation in the wind power industry,

the good handling properties of automotive components

facilitate transport across longer distances. Hence best

practices from industries such as the heavy duty and

14 Dr.-Ing. Udo Hartwig, Dipl.-Ing. Klaus Pöllath, ZÜBLIN AG

plant industry or the aerospace industry are the examples

to turn to with regard to this aspect. The requirements

and challenges for logistics in these two industries

due to the sheer dimensions of the components, the

distribution networks required and the safety and security

regulations are substantial. The experience gained in the

field of aerospace logistics is highly valuable here, such

as the insight that transporting heavy loads on inland

waterways instead of ground shipping has several major

advantages. Load limits, for instance, are not as crucial

in waterway transportation. The administrative effort

is considerably lower and fewer permits need to be

obtained: planning and approving as well as carrying

out heavy-load transports on inland waterways is faster

and more cost-efficient.

With regard to the maritime technology required to

install offshore plants and the experience with and

handling of changing weather and tidal conditions at

sea, the only other industry the offshore wind industry

can possibly be compared to is the oil and gas industry.

Both the experience and the offshore technology

from the oil and gas industry were drawn on for the

construction of the offshore wind park „Alpha Ventus“,

for example. Nonetheless, Erik Pietsch, Project Manager

for Logistics Planning at Vattenfall, points out that while

there is solid experience in certain areas of the oil and

gas industry that can serve as inspiration, there are also

some fundamental differences compared to offshore

wind parks. So far, the erection of single structures

was often the main focus of activity, whereas offshore

wind power projects require the construction of large,

contiguous offshore parks made up of wind turbines and

platforms. The supply chain for the construction and

operation of such wind parks is far more complex, as

both sequential and parallel – and considerably longer

– logistics services have to be planned and controlled.15

Aside from the industries mentioned earlier, it is

worthwhile taking a look at further branches of industry:

let us not forget about the logistics of major construction

sites, for example, where the scale of construction

projects, construction site accessibility, the construction

technology employed and the usage of interim storage

facilities is just as relevant as in the case of the offshore

wind power industry.

15 Interview with Erik Pietsch, Vattenfall, 08/09/2011

Industries with Best Practice Examples in the Offshore Wind Business

Grid connection

Process steps

Automotive Heavy duty & plant industry

EnergyOil & gas Onshore wind

Civil engineering

Industries

Aerospace

Installation

Foundation

Logistics (transport & shipment,

methodology)

Industries with high degree of best practice transfer Industries with low degree of best practice transfer

The Synchronization of Technology, Funding, Grid Connection and Logistics is the Key for Overall SuccessGermany‘s emerging offshore wind industry is at a

crossroads. While plant manufacturers are called upon

to develop larger and less vulnerable plants in order to

defy the harsh weather conditions out at sea, it will be

the duty of wind park operators and service providers

in particular to create a stable and profitable value-

added chain. In order to achieve that, project controlling

has to really live up to its potential and assume more

responsibility. Stepping up coordination, consultation

and communication between all stakeholders

involved would help to ensure efficient planning and

implementation of logistics requirements while wasting

as little time and as few resources as possible, seeing as

efficient logistics and the prevention of shortages are not

only key levers for the profitability of offshore projects,

but also a fundamental prerequisite for ensuring success

and a positive outcome.

However, it should not be neglected that the offshore

wind market faces numerous other challenges aside

from the logistics challenges at hand. The challenges

regarding technological progress, grid connection and

funding are interrelated and interdependent and thus

have to be overcome almost simultaneously. All in all,

even the most efficient logistics process can only make

a minor contribution to the profitability of such projects

if grid connection cannot be set up in due time and if

the technology employed is insufficient. And the service

issue presents another challenge. This is not only a

question of costs incurred, but a more fundamental

issue concerning the availability and deployment of

resources and material throughout the entire service

process. Sooner or later, non-existent or unsophisticated

service concepts will aggravate issues relating to the

availability of staff and spare parts as well as disposal

and dismantling issues.

If the challenges described here are not met in the short

run, Germany will be at a risk of failing to meet its goal

of achieving an installed capacity of 10 GW by 2020 and

fail to keep up with the developments in the promising

offshore market, thus losing its position as one of the

trailblazers in the wind power sector. In the industry, the

German North Sea is seen as the offshore pilot project

par excellence: if technology, logistics, grid connection

and funding work here, offshore wind power will also

work anywhere else in the world, because framework

conditions at almost all of the other locations are far

more favorable than in the North Sea. Both in terms of its

reputation and its leading role in the technological field,

it would be a serious setback for Germany as a business

location if the economic and ecological potential of

offshore wind power were to remain unused.

Source: Barkawi Management Consultants

Authors

Frank Reichert is heading Barkawi’s After Market Services Practice as a Vice President.

After graduating as a Diplom-Kaufmann at Munich’s LMU, including stopovers in Boston and London, Frank started his career as a consultant at Siemens Management Consulting. Followed by engagements at BayTech Venture Capital, Diebold and Detecon, he joined Barkawi Management Consultants in 2006, where he became responsible for the Aftermarket practice after a short period of time.

Frank’s core consulting topics include innovative service concepts, business and market strategies as well as operational excellence projects.

Acknowledgements to the following companies

REpower Systems SE

RWE Innogy GmbH

DB Schenker

Vattenfall Europe AG

EnBW Erneuerbare Energien GmbH

GE Energy Deutschland

Hellmann Worldwide Logistics GmbH & Co. KG

NOW Nordsee-Offshore-Wind GmbH/Northern Energy Unternehmensgruppe

Robert Kunze is a Consultant in the After Market Services Practice at Barkawi Management Consultants. He is focusing on renewable energies, e-mobility and telecommunications. Within these industries he is specialized on designing and implementing complex Service and Operations Planning Processes.

Saman Kitvarametha is a Consultant in the After Market Services Practice at Barkawi Management Consultants. Amongst other topics he is focusing on the optimization of Maintenance and Repair Processes in companies out of the renewable energies sector.

Barkawi Management Consultants I Baierbrunner Str. 35 I D-81379 Munich I Telephone +49-89-74 98 26-0 I www.barkawi.com