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Renewable Energy Part of Offshore Technology Event in Texas

One of the world's largest oil industry conferences has a rising star -- renewable energy.

The Houston Chronicle reports at this week's Offshore Technology Conference, companies that sell equipment to oil and gas drillers are pitching their products for renewable energy, too. Attendees are crowding into panel discussions to hear engineers and geoscientists present research on techniques to make renewable energy more cost effective. Wind developers are flying in from California and New York to opine on the nascent, but growing offshore wind energy market in the United States.

Renewable energy has arrived in full force at OTC, which runs through Thursday, as more traditional oil producers -- and the service and equipment companies that serve them -- look to diversify their portfolios.

Global offshore wind energy is poised to grow dramatically in the coming decades, with cumulative investments in offshore wind projected to reach $350 billion by 2030 and nearly $1.5 trillion by 2050, according to the International Renewable Energy Agency. And traditional oil companies increasingly want a piece of that burgeoning market.

Doreen Harris, who oversees large scale renewable projects for the state of New York, said she wasn't surprised to be asked to speak at the historically oil-centric OTC this year.

"It's the oil and gas companies that are in some ways most interested in offshore wind developments," she said, calling it the "manifestation of the market."

Offshore wind has taken off in the United Kingdom, Europe and China, but is only now beginning to break into the U.S. market. Only one offshore wind farm operates in U.S. waters, a five-turbine development off the coast of Rhode Island capable of producing 30 megawatts of electricity, enough to power about 6,000 Texas homes on a summer day.

But as the cost of offshore wind production falls and more governments set ambitious targets for renewable energies, the business opportunity in the U.S. is huge. Oil companies such as the Norwegian firm Equinor and the European supermajor Royal Dutch Shell want a piece of the growth.

The U.S. has the technical resource potential to develop more than 2,000 gigawatts of offshore wind capacity, almost double the nation's current electricity use, according to the Department of Energy. Over the next decade, seven East Coast states are projected to spend almost $70 billion on capital expenditures building nearly 20 gigawatts of offshore wind generating capacity to meet aggressive renewable targets, according to a University of Delaware study.

The federal government, meanwhile, is laying the groundwork to start bidding rights to build offshore wind off the California coast.

Companies are now willing to pay more for offshore wind leases in federal waters. In December, companies agreed to pay $135 million to lease blocks off the coast of Massachusetts, setting a record that was more than triple the price paid in a previous federal offshore wind auction in 2016. This year, the state of New York received a record number of proposals from companies wanting to build wind energy developments offshore.

Falling costs for offshore wind are making projects more commercially viable -- and more attractive to investors. Since the Rhode Island wind farm was built in 2016, the cost of offshore wind power in the United States has plunged nearly 75 percent, according to the Institute of Electrical and Electronics Engineers, a professional association based in New York.

Energy companies are looking to develop deep-water wind projects for some of the same reasons they looked offshore to drill for oil, said Dominique Roddier, Chief Technology Officer at the California-based deep-water wind developer Principle Power, which also sent representatives to OTC. The ocean offers a bigger field and often better resources, Roddier said.

In the case of wind, it blows more steadily offshore than onshore.

Roddier, who started his career at Exxon Mobil, said more engineers, geoscientists and developers like him are switching from offshore oil to offshore wind. They can apply some of the same skills, philosophies, safety standards and technical know-how to renewable energy, he added.

In years past, the British company Survitec played up its life boats and other personal protection gear to the oil company representatives at OTC. But this year, the company decided to focus on how it supports the renewables industry with protective clothing for power production platforms.

The company is betting that the offshore U.S. wind industry is on the verge of taking off, much like the United Kingdom was a few years ago before becoming one of the world's leaders in offshore wind production. Survitec, which featured big photos of offshore wind turbines in its booth, aims to become an early vendor to companies eager to get in on the ground floor of wind production off the U.S. coast.

"I'd like to think we have all the right products so when someone comes in here from the United States, we're ready to go," said Kevin Laing, head of energy sales.

But exhibitors know they're still dealing with an oil and gas crowd. The key, vendors say, is to show they can still provide products and services for drilling such as corrosion monitoring and down-hole imaging, but also adapt them to renewables.

The Dutch company Emce Winches, for example, sells winches used to lift and lower heavy objects from oil platform. But it also promotes the flexibility of its winches, which are used in assembling and installing wind turbines.

"People don't come here and say, `I'm a wind mill manufacturer. Can you help me on this?"' said Peter-Paul Stokvis, the company's chief executive.

In another part of the exhibition hall, conference goers gathered around a model of the core product of Amsterdam-based SBM Offshore: a floating production, storage and off-loading vessel used for offshore oil production. But a few feet away, another model was drawing attention: a floating wind turbine.

The turbine is made with many of the same parts that SBM uses to make deep sea vessels designed to process and store oil produced offshore, including floating buoys for stabilization. SBM has sold a French utility three, 8-megawatt offshore turbines that will be located off the coast of Marseille in 2021.

"Oil and gas will still be around for another 25 to 30 years," said the company's press officer Paula Farquharson-Blengino, but the energy mix will shift.

"Renewables," she said, "will become the bigger act down the road."

Copyright AP - Associated Press
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