RES Acquires Sulzer Schmid, EDF Enters Korean Market

This week, Allen, Joel and Phil discuss RES acquiring drone
inspection company Sulzer Schmid, EDF Renewables entering the
Korean offshore market, and Equinor's choice to downsize their
renewables division. Sign up now for Uptime Tech News, our weekly
email update on all things wind technology. This episode is
sponsored by Weather Guard Lightning Tech. Learn more about
Weather Guard's StrikeTape Wind Turbine LPS
retrofit. Follow the show
on Facebook, YouTube, Twitter, Linkedin and visit
Weather Guard on the web. And subscribe to Rosemary Barnes'
YouTube channel here. Have a question we can answer on the
show? Email us! Pardalote Consulting -
https://www.pardaloteconsulting.comWeather Guard Lightning Tech -
www.weatherguardwind.comIntelstor - https://www.intelstor.com Allen
Hall: I'm Allen Hall, president of Weather Guard Lightning Tech.
And I'm here with the founder and CEO of IntelStor, Phil Totaro and
the chief commercial officer of Weather Guard Lightning Tech, Joel
Saxum. And this is your News Flash. News Flash is brought to you by
our friends at IntelStor. If you want market intelligence that
generates revenue, then book a demonstration of IntelStor at
IntelStor. com. RES has acquired Solzer Schmidt. A Swiss firm
specializing in autonomous drone inspections for wind turbine
blades. This acquisition aims to strengthen RES's digital solutions
and operations and maintenance services. Solzer Schmidt's 3DX blade
platform uses autonomous drones for wind turbine blade inspections,
providing 100 percent coverage and high quality inspection data,
which is one of the reasons that RES acquired them, obviously.
Phil, there's just, does seem to be a number of inspection
companies and O& M companies merging to grow bigger and bigger
at the moment. Philip Totaro: There is. And what's interesting
about this deal isn't so much, the, the companies specifically
getting together. It's the fact that yet another O& M company
or an O& M generalist. Is getting a specialist in doing
something, whether it's blade inspections, whether it's gearboxes,
whether it's anything. This has been happening over the past six
or, nine months and we've been talking about it on, on Newsflash.
And the reality of this is, this is yet another kind of piece of
the puzzle where you're gonna see more and more consolidation in
the O& M space because the generalist O& M firms need the,
the specialists not only for the contracts that they've got in
place but also these capabilities because a company like res can
bring scale to what they're doing here and it's it's an impressive
thing. We didn't see any financial details of the deal disclosed,
but it's still an impressive opportunity for for both companies to
be able to. Continue moving forward together. Joel Saxum: So,
Sulzer Schmid and the ebb and flow of drone companies has kind of
its own carved out spot. They do a lot of work in the, in Europe.
They recently had a contract to inspect over 4, 000 turbines with
Vestas over in Europe. I think they've had it for two years. So
that's very impressive on their side. They've gone in some of the
technological directions of some of the others with You can fly
your own, train your pilots on site fly your own drone. Here's a
smaller drone with an autonomous flight software as a, as as well
as their, big enterprise drones to do inspections, but what's
really, it really is a shining part of their business is their
software as a service. So that 3DX blade platform, if you've ever
used it is very, very good. It's seamless. It's easy to look at
inspections. The quality is there. So, big, good pickup by R. E. S.
to grab Soltar Schmidt in my mind, probably the, the best fit for
someone to grab right now of the large drone inspection companies,
you have your Skyspecs and stuff, and they're starting to grow arms
and legs themselves, whereas Soltar Schmidt has remained in the
kind of that The niche that's good for an acquisition. So kudos to
RES for strengthening their internal business portfolio. And
congrats to Solter Schmidt for the sale. Allen Hall: EDF Renewables
has acquired 100 percent of Shell Overseas Holding limited shares
in West Sea Energy One, marking its entry into the South Korean
offshore wind market. The company is now exploring the development
of a large scale offshore wind project in South Korea. Three
identified zones have been, three identified zones have an
estimated capacity of up to 1. 5 gigawatts and wind measurements
have already been conducted across these areas. Bill, we have seen
a number of large operators withdraw from Asia, essentially. Why is
EDF headed into that void? Philip Totaro: Exactly for what you just
mentioned, Allen. Because Shell is the one that they bought this
stake from, and Shell is the one pulling out of Asia. So why does E
EDF want to be in South Korea? Because they have confidence in the
market and they were probably able to get these assets at, at a,
particularly good price, so it, it gives them the opportunity to
continue the development process, which is likely to be lengthy in,
in South Korea, while they're still kind of figuring a few things
out about the policy and, and the tax structure and whether or not
they're going to have local content regulations and, and to what
extent. So it's a good opportunity for EDF because eventually South
Korea will become a major global market in offshore wind. And, EDF
gets to kind of get in early. At a, pretty fair price. Joel Saxum:
To follow on with what Phil said there, the South Korean wind
market is interesting because like on shore, there's less than 2
gigawatts. It's there's not very many. I think it's like 1700
megawatts or something in the whole country and the government of
South Korea has large renewable energy goals, just like everybody,
every other major country does in the whole rest of the world. So
the only place that they're really. Is the best opportunity to
grow, to get to those goals is an offshore wind play. So, there's
some near shore things. There's also a lot of floating offshore
capability in South Korea there. So the offshore play will be
something that is going to get developed in South Korea in the
next, three, five, 10 years. So good looking out by UDF getting in
there. Allen Hall: Norwegian energy giant Equinor is planning to
downsize its renewable energy unit to prioritize profitability over
growth. This move reflects the challenges faced by the renewable
energy sector, particularly in offshore wind, including rising
costs and low returns. Equinor will implement fewer renewable
energy projects, fewer markets. Phil, we're really seeing a lot of
withdrawals from European companies in other areas that tend to be
focusing on Europe at the minute, and they're also limiting their
renewable investment and going back to oil and gas for a little
while. Is that a long term strategy or is this just a short term
recovery approach? Philip Totaro: It's likely to be a short term
thing but following on what we just talked about with EDF buying
out Shell's interest in South Korea Econor is pulling out of
Vietnam, Spain, and Portugal canceling projects there that had been
in largely the early stages of development given the maturity of
the company in those markets. Or the markets themselves in the case
of Spain and Portugal, they don't really have, Portugal's got a
demo floating project. But beyond that, they, they just have a
wishlist of, of offshore things they'd like to do. So I think
that's also part of it that, they're, they weren't making progress
fast enough, but it's also coupled with things that we've talked
about on the show, for a number of weeks and months now where with
interest rates being so high. Companies can't get access to the
volume of capital that would be necessary to fund all the projects.
So they're starting to reprioritize and they're reprioritizing
markets where, like in their case, Norway, where they think they're
going to have better success at building something as opposed to
some of these, these far flung markets. So it's unfortunate. It is,
as, as you pointed out, Allen, likely to be a short term thing
where. When renewables becomes more profitable again, everybody,
including the oil and gas companies, will pile back in, but for
now, they're gone. They're scaling back. Joel Saxum: So this is
exactly as Phil saying, everybody's BP got their new CEO in last
year, the statement was, we're going to return to profitability for
our shareholders. And it's making sure that they're protecting
their, basically economic interests. Econ or we'll be back in the
offshore wind world or not, not back, but they'll, they'll expand
in it. But this is a, this is a, A temporary pullback to just make
sure that all of their basically shareholders are happy. Funny note
here, their main shareholder, 67 percent of the company is owned by
the Norwegian state, right? So the Norwegian sovereign fund owns or
is a part of a lot of what Econor does. So to maintain that,
they're wanting to de risk their operations, much like a lot of the
other oil and gas majors are doing.