Published On: Fri, Aug 17th, 2012

Norway’s Kvaerner to quit offshore wind business

Norways Kvaerner to quit offshore wind business

Norway’s Kvaerner has revealed that it will walk away from the offshore wind business after finishing work on the jackets destined for the Nordsee Ost project, as its contractual dispute with RWE rumbles on.

A spokeswoman for Kvaerner, which was part of Aker Solutions until a 2010 demerger, tells Recharge that the decision mostly comes down to the Oslo-based company’s desire to focus on the “booming” business of building jackets for oil and gas clients.

However, she acknowledges that Kvaerner’s views on offshore wind have not been brightened by its ongoing disagreement with German utility RWE over who should shoulder the burden of cost overruns at Nordsee Ost. The matter is presently in arbitration.

In 2010 RWE awarded Aker Solutions a €115m ($142m) contract to deliver jacket foundations for the 48 REpower 6MW turbines and a Siemens substation destined for the 295MW Nordsee Ost.

Later that year Aker spun off Kvaerner as a separate business unit, and production continued at the Verdal fabrication yard in central Norway.

Although neither Kvaerner nor RWE have divulged many details about their dispute, Kvaerner has requested compensation for “changes to the scope” of work at Nordsee Ost.

Nordsee Ost was initially slated for completion next year, but like many early German projects, it has been affected by grid delays.

Kvaerner says it has already delivered 20 jackets for Nordsee Ost, including the one that will hold the substation, and 13 have been shipped. The fabricator emphasises that regardless of the outcome of arbitration, it has every intention of fulfilling the entire order.

Last year, with 10 or so jackets having been finished, Kvaerner admitted it had achieved “no margin” on the Nordsee Ost contract. Kvaerner also produced the six tripod foundations holding Areva turbines at Alpha Ventus.

Although Kvaerner’s footprint within the industry remained relatively small, its decision to walk away from offshore wind nevertheless underscores the scarcity of firms producing subsea foundations for the sector – and the commercial challenges facing those that do exist.

Earlier this year Smulders lurched into bankruptcy, sending shivers down the spines of developers across the industry. However, Smulders has expressed confidence in its ability to bounce back, and has put offshore foundations at the centre of its future business.

Source: rechargenews, August 17, 2012


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