CTVs – All Grown Up?

Published in category: Offshore Wind

Captain_Tamer_Masoud_Harbour_Master_Port_of_FujairahSue Crothers
Offshore Wind Market Analyst
4C Offshore

Some Crew Transfer Vessel (CTV) operators are facing tough times in the market while others are still experiencing high demand. So what is the reality?

After four years of strong growth, the CTV market appears to have reached maturity and a level of stability. Between 2012 and 2013 around 140 vessels entered the market, but the number of new builds has now slowed to a steady annual rate of around 30. These vessels are being built to meet demands for higher specifications and increased seakeeping capability.

Changes to the market

In the early days the control of the market seemed to be with the operators as there was a shortage of suitable vessels. With supply exceeding demand; where we are routinely seeing a quarter of available vessels off contract, the power in the relationship has now moved to the charterers. While a surplus of vessels is needed to cover maintenance and repair periods, there are clearly vessels lying idle which are capable of working. There are a number of reasons for the surplus. One issue is that CTVs are a niche vessel and few have successfully redeployed to other work. Therefore, vessels are not leaving the market. At 4C we mark vessels which have not worked for over two years as ‘not active in market’ to allow us to make an appropriate assessment of operational vessels. Using this description, there are presently around 90 vessels not competing for work.

The change to the operational model for offshore wind sites has had a significant impact on vessel numbers. For the nearer shore offshore wind farms such as those built for Rounds 1 and 2 in the UK, it is business as usual with CTVs transferring technicians and other service personnel daily to sites. But it is those sites that are currently under construction and in the planning stages where the greatest changes are being seen. Developers are actively looking to reduce the number of crew vessels accessing sites.

With sites further offshore and in harsher sea conditions, daily transit to sites is not appropriate. This has led to the introduction of Service Operational Vessels (SOVs), with the support of one or two CTVs, in combination with an increased use of helicopter access. Previously these models would not have been economically viable, but increased turbine capacity and the associated revenue means that losses due to downtime have overtaken the access cost using means other than CTVs.

The future

SOVs will not spell the end of CTVs, but bigger vessels with greater access capability and larger passenger numbers have already become more common. Indeed, this trend is already being seen with CTVs used more, for example, like those in the oil and gas market carrying out crew changes rather than daily commutes. The introduction of the new SPS code has taken place in Germany which allows more personnel to be transported and it is expected that the codes will change in other countries too.

Have we reached peak demand?

With the number of CTVs currently off charter, it is clear that supply is greater than the existing demand for around 300 vessels. However, will there be sufficient vessels with the right characteristics to supply the future market? 4C analysis shows that with more sites moving from construction to operation and maintenance, demand will grow for around 400 vessels. Further offshore sites will need larger, more capable vessels and current build programmes appear to meet much of this requirement. Whether this situation will continue depends on future changes that developers and operators make to the operational model of sites.