Orsted Exits France, Octopus Invests in Ocergy, Timken’s Revenue Declines, Ireland’s €100B Offshore Plan

Octopus Energy invests in Ocergy's floating offshore wind
foundations, Timken's wind energy revenue declines due to China's
shift toward domestic suppliers, Ireland has a €100 billion plan
for 37 GW of offshore wind by 2050, and Orsted exits the French
market. Sign up now for Uptime Tech News, our weekly email update
on all things wind technology. This episode is sponsored
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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 founder and CEO of IntelStor, Phil Totaro, and
the chief commercial officer of Weather Guard, Joel Saxum. And this
is your NewsFlash. NewsFlash is brought to you by our friends at
IntelStor. If you want market intelligence that generates revenue,
call us today, then book a demonstration of Interstore at
interstore. com. Renewable energy provider, Octopus Energy has
announced a strategic investment in California based floating
offshore wind company, Ocergy. Ocergy designs and manufactures
lighter modular floating. Foundations for wind turbines aiming to
reduce the time and cost of building offshore wind farms. The
investment, which is estimated between eight and 24 million pounds
will help commercialize Ocergy's technology and fuel the company's
expansion into new markets, including the U S, UK, France, Norway,
Italy, Japan, and South Korea. Now, Phil, California offshore. It's
going to be almost all floating, has to be. Does this make sense
for Octopus to get in early and to basically choose a winner for a
floating platform to move California offshore ahead quickly? Philip
Totaro: Yeah, this is interesting because, there are a number of
companies out there with a number of floating platform designs. So
that said, with the scale that Octopus Group brings in general to
any investments particularly those of subsidiary, Octopus Energy
you just rattled off all the countries that they want to be able to
go develop projects in. Most prominently, though, is Octopus has
already co invested in some of the projects in the UK and Scotland,
where they're gonna be building a ton of, it's I forget how much,
it's 8 or 9 gigawatts of floating offshore in the next 10 years.
Five, six years and then there's gonna be more, more to come in
that market alone. Plus all these other ones you mentioned again.
So this is, I wouldn't necessarily characterize it as they picked a
winner. I think they're, placing one bet on one company and they're
gonna see how it goes and. They are the type to be a little bit
pragmatic and they'll want to potentially spread it around a
little. But this looks like a promising enough technology that you
know, given a lot of the lessons learned from. All the early stage
prototypes I think this company is Ostergy is well positioned to be
able to scale this technology up. Joel Saxum: Yeah, when you look
at the Ocergy technology, it's fairly simple. It's not a high risk
technology either. It's something that's been developed. It's been
used in oil and gas for a long time. It's just a. Basically a
triangle floater and that's all it is. So they're not taking a wild
flyer on something here that hasn't been done. I think the next
legitimate investment here or partnering would be make sure that
you have a good mooring company as a partner in going to these
floating offshore wind farms, because that's something we haven't
had to do with fixed bottom offshore wind. But it's going to be a
problem for floaters. Allen Hall: Timken company, a global leader
in engineered bearings and power transmission products reported
mixed financial results for the first quarter of 2024, the company
experienced a 9 percent organic revenue decline, primarily due to
significant downturn in China's wind energy sector. Now, Timken has
a strong EBITDA margins at 20. 7%, which is fantastic, and adjusted
earnings per share of 1. 77. But it is highlighting some issues
with the changing market conditions. And I always say, if you want
to know the health of the company, look at their suppliers. And
Timken is a big supplier of bearings and moving components. In wind
turbines, if they're seeing a 9 percent organic decline, and that's
focused on China What does that mean, Phil? Philip Totaro: You
gotta take a look at the number of factories that have been opened
in China to do things like bearing development and integration
into, drivetrains and the overall nacelle design. Basically, what's
been happening is the Chinese, with all this push onshore wind and
offshore wind towards bigger turbine sizes, they've been importing
a lot of Western developed technology, including bearings from
Timken, or having Timken, come over and domestically produce in a
Chinese factory. What's happening now is a lot of the domestic
Chinese bearing manufacturing companies have now gotten some,
government investment or grants or subsidies, etc., to be able to
go and build their own factories to, to have these bearings for
the, six, seven, eight, nine, ten, megawatt onshore turbines and
the, up to 18 to 20 megawatt offshore turbines. So they're trying
to be less dependent on western companies at this point. So that's
basically what that boils down to. The problem and challenge for
Timken is That they're going to be intrinsically tied to growth in
Western markets now if the Chinese companies are going to start
moving away from sourcing components from Western companies. Allen
Hall: The Irish government has approved a 100 billion euro strategy
to scale up offshore wind energy after 2030. The feature framework
for offshore renewable energy report sets out. A policy pathway for
Ireland to deliver 20 gigawatts of offshore wind by 2040, and at
least 37 gigawatts by 2050. The strategy aims to de risk the market
for developers and provide critical support through the state
investments in port development and power grid strengthening. As
you look towards Ireland, they're planning a head Phil. This is
something that America should think about. Philip Totaro: Yeah, we
could learn a lot of lessons. But look the Irish have been wanting
ever since, our globe bank one. Got built. They've wanted to be
able to exploit their offshore wind resource, which is tremendous.
There are already a number of projects in the development pipeline
that are going to give them something like. I think six to eight
gigawatts here by about, 2030. These targets that they've set it's
fairly ambitious and, a hundred billion Euro investment is going to
help them facilitate a lot of the things that need to happen in
terms of infrastructure et cetera, that they're going to need to
build. do to facilitate this this kind of build up and this kind of
build out and scale up. Joel Saxum: When I was at Bilbao, I ran
into Carrie Muldoon from the Northern Ireland Maritime and Offshore
Cluster, called the NIMO Cluster. She introduced me to quite a few
people from Ireland there that are really trying to You know, put
their collective eggs in the basket and put all their efforts
towards getting more offshore wind in Ireland. So you have a whole
group of people, of course, you're going to have those clusters and
stuff, but you have a whole group of people in the country behind
making this happen. And I guess in my Experience and Allen, maybe
you can mirror this. The Irish can get some stuff done. Allen Hall:
Historically they have for sure. And the planning on Ireland's part
is amazing. I think this is fantastic. And a lot of countries
should follow it. Danish renewable energy developer, Orsted has
announced its exit from the French market with the sale of its.
Ostwind France business to Engie, of all companies. The
transaction, which is expected to close in the second quarter of
2024 includes Ostwind International, Ostwind Engineering and its
onshore wind and solar units in France. Olmsted's decision to sell
Ostwind France aligns with its updated business plan which
emphasizes concentrating efforts on the UK, Ireland, Germany, and
Spain markets for off onshore wind development and solar in Europe.
up. Phil, Orsted is reorganizing, is going to be stronger than
ever, this is a really unique step by them to concentrate on
specific areas, I think it's a smart move. Philip Totaro: Yeah it's
interesting though because they just bought into Ostwind, normally,
What, three, four years ago, I want to say and now divesting it
again. But it's necessary in the current kind of climate and the
context of, what's going on in their global business. The real
challenge though, in France at this point and the challenge for
them certainly has been a lot to do with the permitting timelines
and the amount of project pipeline that, France has an offshore.
They've already got close to 10, 000 turbines installed. There's, a
portion of that installed base that's aging and, is going to need
some repowering. There will be opportunities in France, but it's
going to be, a little too finite for Orsted who would obviously
rather focus on what they consider to be more lucrative markets. A
responsible and pragmatic move from them. And, at the end of the
day, certainly a good thing for Engie to be able to, continue
adding to their coffers.