Since the end of 2020, Scorpio Bulkers has been gradually disposing of its dry bulk vessels. In the world of entertainment, this would have been classed an extreme makeover.

Reinventing as Eneti?

There were several factors that led to this decision: the lower barriers to entry and standards of competition in the dry bulk market and, in 2018 and 2019, the pressure on the transportation of coal, especially from financial institutions in the United States. In parallel, amongst the various research and development projects we habitually appraise, we evaluated the fundamentals of the offshore wind turbine installation vessels and renewables market. This prompted us to redirect Scorpio Bulkers’ focus to more sustainable endeavours and dare to take the leap towards this growing market. Disposing of our dry bulk carriers was a natural first step fully aligned with the Group’s vision of embedding decarbonization efforts with the market’s solid opportunities. After we had started the process, the dry bulk market recovered, but for us there was no turning back, and we don’t regret our decision.

Moxie

At Scorpio, we have always been “moxie” – agile but responsible. So we were mindful but unworried of this responsibility when entering a sector that was new to us. Our approach is to dig deep into details of any new venture to fully understand the environment into which we are stepping. This was also the case with the conception of Eneti. We were acutely aware of the challenges and therefore looked for partnerships and consultants in the areas where we were less experienced – this is where DNV came in.

DNV support

Given DNV’s strong track record in this field, we were very pleased to ally and further strengthen our relationship. We particularly appreciated DNV’s ability to investigate non-standard issues that crop up all the time during the construction process for wind turbine installation vessels. Rules and regulations are often not clear or focused and open to interpretation for this complex and new type of vessel. It’s a fine balance to match what makes sense technically to meeting the regulatory requirements. And this is where it’s been very helpful to have such an experienced partner by our side. With the aim to boost operational knowledge, Eneti also employed experts and acquired the UK-based company Seajacks in 2021. Their existing assets and long-standing experience in the operation of wind turbine installation vessels established Eneti as one of the strongest players on the market and unique in having a NYSE-listed public vehicle fully dedicated to renewables.

Project pipeline

Eneti acquired five existing wind turbine installation vessels through Seajacks. They operate in Northern Europe and Asia. However there is an expansion trend for the diameter of wind turbines which will challenge both the existing capability of the crane and the availability of space on deck. The business case was therefore building a vessel which will better cover these concerns, considering that supply and demand are extremely misbalanced at present. Currently, Eneti has two newbuilding projects at DSME in Korea. They are due to be delivered in 2024 and 2025 and we are confident that they will also be able to transport and install the turbines of the future. Scorpio Ship Management s.a.m. has been in charge of technical specification discussions and entrusted with the supervision of both newbuildings. Eneti Inc. is however as an autonomous entity capable of proceeding in the promising renewable segment with its own resources, including technical management and operation.

New vessels fit for the future

Both are being built to the new GustoMSC NG-16000x design and will be capable of operating at depths of up to 65 metres and of installing wind turbines of up to 20 megawatts with diameters exceeding 300 metres. We have had many discussions with the designer on how to improve the operational capability of the vessels and on how to operate with reduced emissions. We want to build them as energy efficient as possible and ensure that they can comply with tightening environmental regulations. For example, the vessels will have DNV’s Ammonia Ready class notation. That being said, we want them to be as fuel flexible as possible – moxie! This means they could also be methanol ready, LNG ready or hydrogen ready. We have run studies on the storage capability and supply for almost all liquid gases (ammonia, methanol, LNG and hydrogen), and we have invested in a diesel generator which is able to be easily retrofitted to adapt to a new fuel.

Emission reduction measures

To reduce emissions and boost energy efficiency, the cranes are fully electric, and all the major electrical consumers are fitted with variable-frequency drives. We have also introduced hybridization in the form of a powerful battery pack. In turn, we have reduced the power of the diesel engine on board and will instead use the battery for covering peak power requirements. The battery will in general be used as spinning reserve for ensuring that the diesel engines will always run at the most efficient regime, avoiding black smoke during sudden load demand and eliminating the problem of blackouts. We plan to recover the energy into the battery system during operations such as jacking down. Idling time and hotel operations can also be battery powered for a limited time rather than by the diesel engine. The vessels will be ready for cold ironing while in port but we also envisage them using cold ironing during operations once solutions are made available. NOx emissions will be 50% lower than the latest IMO Tier III requirements applicable to this type of vessel.

Adapting to an evolving offshore wind market

Investing in long-term assets that can install the turbine of the future has been Eneti’s primary duty. There is strong competition amongst turbine producers to increase industrial efficiency by size. Similar to other industrial sectors, the competition on size will settle down once certain technical, economic or regulatory limits are achieved. With the possibility of reaching 215 metres’ hook height from LAT, 2,600 tons of crane SWL and a variable load in excess of 12,500 tons, we are confident of being able to serve the offshore wind industry of the future, ensuring a fast return on investment and years of high profitability. Amongst Eneti’s existing vessels, SEAJACKS SCYLLA – a Gusto-design NG 14000 – is well placed to cover present and future wind turbine installation demand. The other four vessels are continuing to install wind turbines along with being employed in Operation and Maintenance, a sector that is as promising as that of new turbine installation.

Future outlook

There are also possibilities to upgrade the length of the boom in order to cover future market needs or eliminate older assets and continue to invest in newbuildings. Eneti is currently exploring all these options. Overall, Eneti’s goal is to experience the same success as Scorpio Tankers while being fully dedicated to renewables. The expected increase in demand of renewable energy will stabilize this market and counteract some of the global energy and political instability. Eneti is ideally positioned to tackle the supply and demand misbalance in the sector and the increased need for zero-carbon energy. Our ambition is to further increase our presence in this promising market.

Agencies

Marex Media