Show notes
GE Vernova is suing SKF USA for $386 million over failing bearings, and American Electric Power (AEP) is suing GE Vernova for wind turbine failures. WUPROHYD is looking to combine wave, solar, and wind power generation into a single floating structure, potentially revolutionizing offshore renewable energy production. BP's CEO is moving company focus away from renewables. DOF Group acquires Maersk Supply Service for $1.11 billion in a cash and stock deal. Jupiter Bach is facing challenges due to EU sanctions on Chinese fiberglass. Nordex plans to restart production at its facility in Iowa. Bureau of Ocean Energy Management (BOEM) has issued key approvals for two major offshore wind projects: Atlantic Shores South and New England Wind.
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Allen Hall: Welcome to the Uptime Wind Energy Podcast. I'm your host, Allen Hall, and I'll be bringing you this week's top stories in the wind energy sector. BP is making significant changes to its strategy under new CEO Murray Auchincloss. The oil giant has implemented a company wide hiring freeze and paused new offshore wind projects.
This marks a stark departure from the previous leadership's focus on rapidly transitioning to renewable energy. Auchincloss is redirecting the company's focus back to oil and gas investments, particularly in the Gulf of Mexico and U. S. shale basins. Dozens of employees previously working on new renewable opportunities have been reassigned to existing projects, and the company is also expected to make job cuts in its renewable sector, though specific numbers haven't been announced.
These changes come as BP faces investor discontent over its energy transition strategy, And underperforming shares. The company is now aiming to balance its decarbonization goals with the current high demand for oil and gas. Industry analysts see this as a significant shift in BP's approach to the energy transition, potentially setting a new trend in the oil and gas sector.
Moving on to global shipping news, Norwegian supply shipping company, Dof Group, has agreed to acquire Maersk Supply Service for about 1. 1 billion. Dof will pay 577 million in cash and issue new shares worth 1. 1 billion. Merrick Supply Service Holding set to own 25 percent of Doff's shares after the transaction.
The combined company will operate under Doff's name and remain listed on the Oslo Stock Exchange. The deal is expected to close in the fourth quarter of this year. DOP plans to finance the acquisition through a 500 million dollar debt facility and up to 125 million dollars in equity. In related news, a new company called Maersk Offshore Wind has been launched to accelerate offshore wind deployment.
The company will provide installation services. Using a new wind installation vessel concept, which is estimated to reduce installation time of offshore wind turbines by about 30 percent compared to conventional methods. This efficiency is expected to lower overall installation costs for developers.
The first vessel is scheduled for delivery in 2025. Maersk Offshore Wind, a spinoff of Maersk Supply Service, is owned by AP Moller Holding and will be headquartered in Denmark. The company aims to support the growing offshore wind market, particularly in Europe and the U. S., where ambitious targets for install capacity have been set for 2030 and 2050.
European wind industry supplier Jupiter Bach is facing challenges due to EU sanctions on Chinese fiberglass. The company's CEO warns that high tariffs on raw materials But low tariffs on finished products are incentivizing production in China over Europe. JupiterBot is recommending that the EU require locally produced content in the wind industry to maintain European production capabilities and knowledge base.
In U. S. manufacturing news, Nordex Group has announced plans to restart production at its facility in West Branch, Iowa. The company will manufacture nacelles for its current N163 turbine model and a new product designed specifically for the U. S. market. Production is scheduled to begin in the first half of 2025 with an annual capacity expected to exceed 2.
5 gigawatts. This move is part of NORDEX's growth strategy in North America and aims to meet domestic content requirements while creating new jobs in the U. S. Lastly, the Bureau of Ocean Energy Management has issued key approvals for two major offshore wind projects, Atlantic Shore South, which will generate up to 2.
8 gigawatts for New Jersey, Received a record of decision. New England wind is set to generate up to 2. 6 gigawatts for Massachusetts. Got approval for its construction and operations plan. These approvals mark significant progress in the U. S. offshore wind industry, with BOEM having now approved nine projects tolling more than 13 gigawatts of offshore wind energy in the development pipeline.
That's this week's top news stories. Now let's welcome our co host, CEO and founder of InterStor, Phil Totaro, and the Chief Commercial Officer of WeatherGuard, Joel Saxo.
In some recent legal developments affecting the wind energy sector in the United States There are two significant lawsuits involving GE Vernovo. And the first one is with SKF bearing manufacturer for about 380 million. And then the second one is with AEP suing GE Vernovo over wind turbine failures, primarily focused on SKF bearings.
So this is a big deal. Where, wherever this, these lawsuits go, whether they settle or not, which they probably will there is a significant bearing issue out in service on a bunch of GE turbines. And I would assume this probably exists on other turbines, but maybe just not as well noticed. But it has to do with the coating on the bearings, Joel, there's a diamond light coating, a very hard coating that's applied to some of these bearings.
that from what I'm hearing from the field starts to flake off and then gets stuck into the lubrication system and then gets all caught up in the bearing. It is a huge problem. And I know when we traveled through Texas and Oklahoma operators brought this up to us.
Joel Saxum: Yeah, for sure. Imagine going to your car and opening up the oil reservoir and just pouring some metal chunks in there and then expecting your motor to last.
That's just not how it works. So when this coating flakes off, it gets ground up a little bit smaller than the flakes, but not much because the coating is super, super hard. So it just creates. Basically debris within the lubrication system. So where they're supposed to be. Solid bearing material, solid ball bearings or rollers rolling against a, or a guide you now and with grease in there, of course, you now have impregnated in all of that grease, all kinds of little particles that are chewing up your bearings.
We heard to the point where the bearing races got chewed through by this basically mixture of this coating and the grease so much that the roller bearings were falling out of the actual bearing race. And that, That's extreme.
Allen Hall: And Phil, this has implications on a grander scale about service agreements, right?
That I think AEP is using GE. I think it's maybe under warranty still, but there are also a lot of operators that are, have service agreements with GE. It puts a lot of pressure on GE Vernova at a time that they don't really need it. And it opens a door, I think, to a lot of ISPs offering services that maybe GE doesn't want to do anymore.
Does that make sense?
Philip Totaro: The reason why this is a big deal now is that A, it was leaked out. It's not, it's public information, but it's not something that people would have necessarily known about had it not been for somebody tracking and finding the complaint that got filed in the state of New York where there's also, an ongoing legal battle between GE and a bearing supplier SKF on, some of those main bearing issues that you mentioned, including the diamond light coating.
But AEP's complaint against GE, they actually identified pitch bearing outer raceway issues gearbox torque pin migration they also identified cracks in TPI made blades Let's see, blade edgewise vibration issues on TPI made blades, LM blade root delamination issues. There was also a blade liberation event that they specifically identified.
This has impacted three of AEP's biggest project sites, which use GE 2. 0 I want to say 2. 5 116s and 2. 0. 8 1 27. And this is more than a gigawatt worth of capacity installed between these three project sites. The traverse Maverick and Sundance projects in Oklahoma. So these turbines are, probably not unique in the issues being experienced.
Although again, a lot of this does come back down to how are they being operated? What's the turbulence intensity at the site, et cetera, et cetera. And that's been GE's kind of position is, an owner operator brings up these kind of maintenance issues and these breach of contract issues on.
The faults, failures, and the general state of operation and the availability of the plant. GE's kind of, it feels according to AEP and the complaint that they filed, it feels like GE's slow rolling them on a response. They're basically saying, oh, we need time to investigate what's really going on, and do all this root cause analysis, et cetera, et cetera.
And AEP's hey, we've been telling you almost since day one that there's been some issues.