Wind turbine installation vessel market to grow ‘significantly': UOB Kay Hian

Sembcorp recently won a contract to build a Wind Turbine Installation Vessel.

The size of the international wind turbine market may be small now, but it is expected to grow significantly, according to Singapore-based global investment bank, UOB Kay Hian Holdings Limited.

UOB Kay Hian said this in a company statement for global marine and offshore engineering group, Sembcorp Marine, which won a contract to build a Wind Turbine Installation Vessel (WTIV). 

The WTIV will be delivered in 2025 with milestone payments. UOB Kay Hian identified the WTIV as assets that are dedicated vessels for establishing wind turbines and can either be tagged as floating vessels in the shape of a ship or that of a jack-up. 

Sembcorp Marine’s contract win is estimated at $600m and could be as large as S$800m depending on the specifications, UOB Kay Hian said.

The banking firm said there are about 16 specialised WTIVs in operation despite the high level of demand. To address the demand gap, UOB Kay Hian noted that firms have instead repurposed jack-up rigs to either establish foundations or install turbines or both. 

As the market grows in size and matures, UOB Kay Hian expects more WTIVs to be ordered in the medium term which will expand the addressable market for Sembcorp. 

UOB Kay Hian, meanwhile, said Sembcorp Marine’s labour issues in the fourth quarter last year have been solved, adding that it would also allow the firm to handle its new order wins that are expected to be revealed over the next six to 12 months. 

Sembcorp Marine had admitted in 2021 that it was grappling with delays in projects because of manpower shortage.