Laying the Foundations

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Adam Barber
April 26, 2013
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This content is from our archive. Some formatting or links may be broken.
Laying the Foundations

According to best estimates, foundation structures account for around 16% of total offshore wind project costs.

This, coupled with energetic discussions that are taking place around specific issues such as grouting, the use of shear keys and industry standardisation, make it apparent that when it comes to future foundation innovation, there’s still much at stake.

And rightly so. Particularly given the size and scope of contractual agreements and the extensive construction plans that are being mapped out in the coastal waters of Europe, Asia (and perhaps even North America – policy pending).

This then, is a critical time.

Indeed, as the market has recognised to its cost, standards and best practice are established at a very early stage.

As such, the challenge of peeling back established working methods and taking an alternative approach, becomes increasingly difficult as the market matures.

Undoubtedly it’s good news for the established few. However, for those on the outside looking in, the foundations sector has become almost impenetrable to break.

And that frustration is entirely understandable. For, while many of these prospective bidders armed with alternative ideas, may well be enthusiastic, practical experience is limited at best and the risks remain exponentially high.

Sure, perhaps one in a thousand of these ideas may make it to the market as a viable option but without a proven track record, it’s a significant investment risk.

That’s why the Scottish Innovative Foundation Technologies Fund, launched last week has provoked interest.

Intended to support projects under construction between 2014 and 2017, the £15m pot intends to further develop this area of the supply chain, cut costs and encourage greater levels of private sector investment.

Naturally, offers made under the fund will seek commitment from manufacturers to base future operations in Scotland following prototypical development and key public figures are already talking up the potential for future job creation, sector dominance and market growth.

On the surface then, all pretty positive stuff.

However, the development of deep-water wind turbine foundations is no mean feat.

It requires commitment, sector experience and a clear route to profit. Something that’s imperative given the sheer size and scale of upfront investment.

As such, that £15m government pot of cash can quickly get swallowed up.

Combine this with exceptional recent activity at specialist firms such as FoundOcean – now 35% owned by private equity firm Ambienta and that’s recently reported a 51% uptick in annual turnover – and questions start to be asked.

Namely, with costs inevitably set to fall as the market scales, is this fund the best way in which to tackle best practice and mitigate against future investment risk?

According to best estimates, foundation structures account for around 16% of total offshore wind project costs.

This, coupled with energetic discussions that are taking place around specific issues such as grouting, the use of shear keys and industry standardisation, make it apparent that when it comes to future foundation innovation, there’s still much at stake.

And rightly so. Particularly given the size and scope of contractual agreements and the extensive construction plans that are being mapped out in the coastal waters of Europe, Asia (and perhaps even North America – policy pending).

This then, is a critical time.

Indeed, as the market has recognised to its cost, standards and best practice are established at a very early stage.

As such, the challenge of peeling back established working methods and taking an alternative approach, becomes increasingly difficult as the market matures.

Undoubtedly it’s good news for the established few. However, for those on the outside looking in, the foundations sector has become almost impenetrable to break.

And that frustration is entirely understandable. For, while many of these prospective bidders armed with alternative ideas, may well be enthusiastic, practical experience is limited at best and the risks remain exponentially high.

Sure, perhaps one in a thousand of these ideas may make it to the market as a viable option but without a proven track record, it’s a significant investment risk.

That’s why the Scottish Innovative Foundation Technologies Fund, launched last week has provoked interest.

Intended to support projects under construction between 2014 and 2017, the £15m pot intends to further develop this area of the supply chain, cut costs and encourage greater levels of private sector investment.

Naturally, offers made under the fund will seek commitment from manufacturers to base future operations in Scotland following prototypical development and key public figures are already talking up the potential for future job creation, sector dominance and market growth.

On the surface then, all pretty positive stuff.

However, the development of deep-water wind turbine foundations is no mean feat.

It requires commitment, sector experience and a clear route to profit. Something that’s imperative given the sheer size and scale of upfront investment.

As such, that £15m government pot of cash can quickly get swallowed up.

Combine this with exceptional recent activity at specialist firms such as FoundOcean – now 35% owned by private equity firm Ambienta and that’s recently reported a 51% uptick in annual turnover – and questions start to be asked.

Namely, with costs inevitably set to fall as the market scales, is this fund the best way in which to tackle best practice and mitigate against future investment risk?

According to best estimates, foundation structures account for around 16% of total offshore wind project costs.

This, coupled with energetic discussions that are taking place around specific issues such as grouting, the use of shear keys and industry standardisation, make it apparent that when it comes to future foundation innovation, there’s still much at stake.

And rightly so. Particularly given the size and scope of contractual agreements and the extensive construction plans that are being mapped out in the coastal waters of Europe, Asia (and perhaps even North America – policy pending).

This then, is a critical time.

Indeed, as the market has recognised to its cost, standards and best practice are established at a very early stage.

As such, the challenge of peeling back established working methods and taking an alternative approach, becomes increasingly difficult as the market matures.

Undoubtedly it’s good news for the established few. However, for those on the outside looking in, the foundations sector has become almost impenetrable to break.

And that frustration is entirely understandable. For, while many of these prospective bidders armed with alternative ideas, may well be enthusiastic, practical experience is limited at best and the risks remain exponentially high.

Sure, perhaps one in a thousand of these ideas may make it to the market as a viable option but without a proven track record, it’s a significant investment risk.

That’s why the Scottish Innovative Foundation Technologies Fund, launched last week has provoked interest.

Intended to support projects under construction between 2014 and 2017, the £15m pot intends to further develop this area of the supply chain, cut costs and encourage greater levels of private sector investment.

Naturally, offers made under the fund will seek commitment from manufacturers to base future operations in Scotland following prototypical development and key public figures are already talking up the potential for future job creation, sector dominance and market growth.

On the surface then, all pretty positive stuff.

However, the development of deep-water wind turbine foundations is no mean feat.

It requires commitment, sector experience and a clear route to profit. Something that’s imperative given the sheer size and scale of upfront investment.

As such, that £15m government pot of cash can quickly get swallowed up.

Combine this with exceptional recent activity at specialist firms such as FoundOcean – now 35% owned by private equity firm Ambienta and that’s recently reported a 51% uptick in annual turnover – and questions start to be asked.

Namely, with costs inevitably set to fall as the market scales, is this fund the best way in which to tackle best practice and mitigate against future investment risk?

According to best estimates, foundation structures account for around 16% of total offshore wind project costs.

This, coupled with energetic discussions that are taking place around specific issues such as grouting, the use of shear keys and industry standardisation, make it apparent that when it comes to future foundation innovation, there’s still much at stake.

And rightly so. Particularly given the size and scope of contractual agreements and the extensive construction plans that are being mapped out in the coastal waters of Europe, Asia (and perhaps even North America – policy pending).

This then, is a critical time.

Indeed, as the market has recognised to its cost, standards and best practice are established at a very early stage.

As such, the challenge of peeling back established working methods and taking an alternative approach, becomes increasingly difficult as the market matures.

Undoubtedly it’s good news for the established few. However, for those on the outside looking in, the foundations sector has become almost impenetrable to break.

And that frustration is entirely understandable. For, while many of these prospective bidders armed with alternative ideas, may well be enthusiastic, practical experience is limited at best and the risks remain exponentially high.

Sure, perhaps one in a thousand of these ideas may make it to the market as a viable option but without a proven track record, it’s a significant investment risk.

That’s why the Scottish Innovative Foundation Technologies Fund, launched last week has provoked interest.

Intended to support projects under construction between 2014 and 2017, the £15m pot intends to further develop this area of the supply chain, cut costs and encourage greater levels of private sector investment.

Naturally, offers made under the fund will seek commitment from manufacturers to base future operations in Scotland following prototypical development and key public figures are already talking up the potential for future job creation, sector dominance and market growth.

On the surface then, all pretty positive stuff.

However, the development of deep-water wind turbine foundations is no mean feat.

It requires commitment, sector experience and a clear route to profit. Something that’s imperative given the sheer size and scale of upfront investment.

As such, that £15m government pot of cash can quickly get swallowed up.

Combine this with exceptional recent activity at specialist firms such as FoundOcean – now 35% owned by private equity firm Ambienta and that’s recently reported a 51% uptick in annual turnover – and questions start to be asked.

Namely, with costs inevitably set to fall as the market scales, is this fund the best way in which to tackle best practice and mitigate against future investment risk?

According to best estimates, foundation structures account for around 16% of total offshore wind project costs.

This, coupled with energetic discussions that are taking place around specific issues such as grouting, the use of shear keys and industry standardisation, make it apparent that when it comes to future foundation innovation, there’s still much at stake.

And rightly so. Particularly given the size and scope of contractual agreements and the extensive construction plans that are being mapped out in the coastal waters of Europe, Asia (and perhaps even North America – policy pending).

This then, is a critical time.

Indeed, as the market has recognised to its cost, standards and best practice are established at a very early stage.

As such, the challenge of peeling back established working methods and taking an alternative approach, becomes increasingly difficult as the market matures.

Undoubtedly it’s good news for the established few. However, for those on the outside looking in, the foundations sector has become almost impenetrable to break.

And that frustration is entirely understandable. For, while many of these prospective bidders armed with alternative ideas, may well be enthusiastic, practical experience is limited at best and the risks remain exponentially high.

Sure, perhaps one in a thousand of these ideas may make it to the market as a viable option but without a proven track record, it’s a significant investment risk.

That’s why the Scottish Innovative Foundation Technologies Fund, launched last week has provoked interest.

Intended to support projects under construction between 2014 and 2017, the £15m pot intends to further develop this area of the supply chain, cut costs and encourage greater levels of private sector investment.

Naturally, offers made under the fund will seek commitment from manufacturers to base future operations in Scotland following prototypical development and key public figures are already talking up the potential for future job creation, sector dominance and market growth.

On the surface then, all pretty positive stuff.

However, the development of deep-water wind turbine foundations is no mean feat.

It requires commitment, sector experience and a clear route to profit. Something that’s imperative given the sheer size and scale of upfront investment.

As such, that £15m government pot of cash can quickly get swallowed up.

Combine this with exceptional recent activity at specialist firms such as FoundOcean – now 35% owned by private equity firm Ambienta and that’s recently reported a 51% uptick in annual turnover – and questions start to be asked.

Namely, with costs inevitably set to fall as the market scales, is this fund the best way in which to tackle best practice and mitigate against future investment risk?

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