NNG: Rising out of adversity

Matt Haag is the project director of the 450MW Neart na Gaoithe offshore wind farm off the east coast of Scotland. In this week's reNEWS podcast, Haag reflects on the challenges of a troubled five-year construction campaign.

Transcript

SPEAKER_01 0:02

Welcome to the reviews podcast with me, Stephen Long.

SPEAKER_00 0:12

People talking about it, there must be something along the lines. What money you can come up with, you know, what do you think of what is the explanation of so many things going wrong on that one project?

SPEAKER_01 0:29

I'm here with Matt Halleg, the project director of Nart Naguiha or NNG as it's come to be known. Matt, you're very welcome to the Renews podcast.

SPEAKER_00 0:38

Thanks very much, Steve.

SPEAKER_01 0:39

I want to start by saying congratulations on winning a prestigious Project of the Year award at the Scottish Green Energy Awards. What do you think it is about the project that the judges liked and why do you think the project deserves that title?

SPEAKER_00 0:54

I think outstanding project. Well, there are various reasons why the project is outstanding. It's one of the very early projects, but I think the main feature is how many difficulties we have overcome over the years to get the project from where it was to being an operational project and having 450 megawatt operating there, producing power for almost 400,000 people, you know. So there were a lot of things that went wrong, and I think I'm I'm really proud of the team to stick with all of that uh with all of that tenacity and uh and and get the project finished because there were a lot of adversaries, I'm sure we're talking about some of them today, and uh we had very little turnover in the team, and uh I'm I'm really proud of them to uh to have finished it, and I think that sense of pride is also with the team, and so we're very thankful for getting this reward.

SPEAKER_01 1:54

Well, let's go back and maybe uh talk about some of the challenges. So, you obviously come into the project and you and the team deliver financial clothes in November 2019, which is a big milestone in and of itself. But going forward from 2019, you run straight into the pandemic in 2020. Can you tell us about the impact that that had at that initial stage when you were very early in construction?

SPEAKER_00 2:25

I think it was quite shocking at the beginning, to be honest, because as you said, we we had uh or I had at least about a year of building the team, getting to financial clothes, getting all these major contracts signed, a lot of negotiations, and also bringing the lenders on board, and uh, and at the same time, actually, a new shareholder was coming on board. Uh, ESB joined EDF in in a 50-50 deal to build this project. So I would say it went quite smoothly until November 19 when financial close took place, and everybody was looking forward to build this project uh as planned in in about three years. But then, as you said, early 2020, COVID hit, it became clearer that soil conditions were maybe different than what we had expected, and I think it was a big shock to the system, to shareholders, to the team, um, probably to lenders when they heard about the the scale of things that were happening. Um, and it took a bit longer, obviously, to really sink in what do these different soil conditions mean, and after a lot of long discussions with uh SIPEM, um we we came to an understanding, but it look a lot it took a long time to get there.

SPEAKER_01 3:45

So you started offshore drilling in uh August 2020, I think, and SIPEM was your lead foundations contractor on the project responsible for installation. You know, how quickly after you began drilling did it first uh emerge as a problem and why did you take that decision to pre-drill for pin piles for your jackets?

SPEAKER_00 4:12

I think it it took a few drilling holes, I would say, to come to that realization. But overall, in the scale of things, it became clear relatively quickly. After you drill a few holes, you expect some initial things that go wrong, but uh fairly quickly after a few holes it became clear that the drilling speed was not quite what we expected, that the whole setup probably was a little bit more complex and needed more adjustments than we originally thought, and therefore the whole drilling campaign would take longer than we had expected. I think the decision to drill these pin piles and then come with the jackets and lift them on top of the pin piles was the correct one, but we're still talking, you know, when when people talk pin piles, I don't know what image they have in their mind, just to be clear, this is a three-meter pile, you know, so it's a big hole you drill in 55 meter depth underwater, remote controlled with a lot of large equipment weighing actually thousands of tons to drill these holes. I think the principal decision was right for the site and for the complexity of the ground, but there was probably an underestimation how many challenges you could find in the ground because we we did a lot of soil campaigns, we did have a lot of information about the soil, we knew that the soil was complex, but we didn't know how different it would be even on within a very small radius. So our jackets have about 30 meter distance between the the pin piles or between the legs of the jacket, and we found that within these 30 meters the the rock may be at very different levels, and that made it quite complex because the design did assume, of course, certain margins, but it fell outside these margins of what was calculated, and that meant not only had did we have to adjust the calculations and the design, but we also had to physically change things how we did them offshore, and that had quite an impact on the project.

SPEAKER_01 6:30

It wasn't only the challenge with the seabeds that you had, of course. You I think you lost the drill at some point as well, which also had an impact. Can you talk us through how that happened and what impact it had on the campaign?

SPEAKER_00 6:45

Well, I I remember very well the call I had um uh from the construction manager saying um we think we may have lost the drill, and I thought that's impossible. Uh you know, we're talking about uh a 70-meter equipment weighing you know hundreds of tons, and and we had uh one of the largest construction vessels in the world out there, the S7000, which has two cranes being able to pull 7,000 tons each, basically. So you can basically lift the Eiffel Tower with that thing, and yet we couldn't pull out that drill anymore. Um, and we tried for a number of days, maybe even a couple of weeks, different ways of pulling in different directions and you know, wiggling it a bit around, and it just wouldn't move. For me, that was really a freak event, I have to say. Um, because I we will never find out what exactly stopped it. We can only think that it's probably some kind of rock jamming into the machine and thereby uh stopping it from moving. But we we drilled overall, I think more than five kilometers of these holes, and we never had any issue like that anymore. So I think my my observation that it's a freak event is probably correct. At the same time, this set the project back immediately by about a year because you need to build this new drilling machine, and yeah, just to be clear, when we talk about the drill, people think probably of a household drill. Um, this is of course something very different. It's a huge machine that has hydraulic engines, electric engines, it has pumping tubes and all the things in it. Uh so as I said, it's a it's very complex and it takes a lot of time to rebuild it.

SPEAKER_01 8:30

When you look back on the decision to take this strategy of pre-drilling, which at the time was probably not unique but perhaps novel in offshore wind to drill so many locations in such a campaign. What's your view on that decision given the campaign was so challenging and ran so over programmed?

SPEAKER_00 8:54

Well, you have to look at the alternatives as well, I guess. What would be the alternatives? You could do a gravity base, you we we couldn't really do monopiles because of the tankle uh surroundings. You we we did think about uh suction piles or suction buckets, uh and I know a neighboring wind park has done that successfully actually, but I think our soil conditions would have not been uh we we wouldn't have been able to use them in the soils that we had. So even in hindsight, I think the the principal design decision to go with drilling and uh and a jacket was probably the correct one. But maybe we underestimated, of course, uh the technical novelty, as you said, at the scale, at the size of piles and in the soils that we actually had of what we would encounter.

SPEAKER_01 9:46

Just to close out on the drilling, in overall sense, when you first started, how long did you expect it to last from August 2020 and how long did it end up running for?

SPEAKER_00 9:59

Oh now you're challenging me, my memory. Um I think ballpark. Originally we we planned like uh a season to a year, I think, for the drilling. You know, that that was when it's supposed to be finished. And there were times to be clear where where we drilled uh a hole probably in a in a day or something, you know, so more or less in in the times that we expected. But there were other times where we spent like weeks on a hole because of various issues that happened uh that were unforeseen. And uh we we ended up, if I'm not mistaken, having the last jacket installed maybe in 23. So I think October 23 probably was the last jacket installed, yes. Um so it took a lot longer.

SPEAKER_01 10:49

But your jacket installation effort goes well, relatively speaking, to the actual drilling for the pin piles, right?

SPEAKER_00 10:57

Yes, it did. It it was it was fairly straightforward. I mean there were issues as well, but uh in comparison it went very well, I would agree.

SPEAKER_01 11:08

So you get over the drilling campaign, your jackets go well, you start putting up turbines, your offshore topsides and jackets go out, you turn on the electrical system, and what happens next?

SPEAKER_00 11:24

Well, unfortunately, we had a few electrical issues, as you know. Um, we we weren't able to to provide the grid as quickly as we thought we would be able to do. That that wasn't for the cables, the cables actually went in fine, but some of the electrical equipment and the electrical system had issues that needed to be resolved, which meant that we we had to reinstall some items and we had to remanufacture actually some items, which of course takes time, which also means you need to bring in generators offshore. These generators then have to be fueled on a regular basis, and all this, of course, adds complications, it adds cost, and it adds time to it. So, unfortunately, when we were finally starting to install the turbines, we didn't have the ability to provide them with grid, so they stood there for quite an extended time on generators because they need some power to be maintained basically, and we couldn't produce the power that we wanted to produce. And that was certainly one of the low points of the project.

SPEAKER_01 12:50

You are listening to the Renews Podcast for breaking news or to access our exclusive market intelligence on the global renewable sector. Subscribe at renews.biz now to turn against you in late 2023 as you're putting turbines out. You have obviously vessel windows for for contracted vessels, and it becomes clear heading into late 23 and into 24 that you won't finish installation of the turbines. Can you take us back to that period and the realization, landing, and what you faced in the market then to try and bring in a new vessel to finish the project?

SPEAKER_00 13:32

Maybe I have to take one step back there because the whole vessel program, of course, was upset by the foundations again. So, what we did is we repurposed the vessel Blue Turn, which we used for the installation or had planned for the installation of the turbines. We repurposed it to help with the drilling campaign. Um, so that took place over a whole year where where SIPAM used a different vessel than was planned for installing jackets still. But then, as you say, you also have to find different slots now for actually not only installing turbines but also laying inter-array cables and all these things. So the the whole vessel campaigns become quite complex because they go differently than planned. We had originally allowed for contingency. We we had allowed times where we wouldn't have used a vessel, but unfortunately, that contingency was used up with the issues we encountered in drilling. So finally, I don't think that was like the the step change thing in one day, like we had on the drill. You know, you get this call and something dramatic happens. Here it was more a realization, as you said, with the weather progressing, with the installation progressing slower than what we had expected. I think by that time we we were already quite uh conservative in our planning because of all the issues we had encountered. So we started looking fairly early. Okay, what other vessels would there be maybe available if we were not able to finish that campaign? And well, we found vessels, unfortunately, not as quickly as we were hoping for. But of course, it was very disappointing to shareholders, to the team, to the lenders that we weren't able to finish that campaign of turbine installation in the time we had planned.

SPEAKER_01 15:26

So you move in then to 2024, you find a new vessel eventually in late 24, and you're able to get back out on the water and finish the project in 2025? Although you say, I remember talking to you in 2019 and saying to you, why is it gonna take you three years to build a 450 megawatt offshore wind farm? It's very conservative, like you just said. I mean, reflecting on the fact it took you five years now. You know, what are the lessons that you're taking from the project and that you've learned along the way in terms of executing offshore an offshore wind farm of this scale?

SPEAKER_00 16:08

Yeah, there are probably a few. I mean, nothing will sound like completely new, but uh if you experience it, you see the value of these lessons to plan for for the unexpected. You know, always in everything you do, something can happen that is completely unexpected. And I I think I said it to you earlier, I compare it to other projects I've been involved with, and some of them with uh to a large degree the same management team. So, experienced people, some of them have been involved in in 10 offshore wind parks and more, and yet something unexpected happens and you have to deal with it. Now, it's a benefit if you have the right experienced people on board to be able to deal with the unexpected, but in the end, you need more time and you need more money. There's no way around that if these issues happen, and unfortunately they can happen in in offshore wind parks.

SPEAKER_01 17:02

You went through COVID, you went through jacket uh drilling issues, you went through electrical issues, fabrication issues, uh installation issues offshore. I mean, this is not normal for in the recent history of UK offshore wind, perhaps European offshore wind. How did you deliver the project with all of these things going on?

SPEAKER_00 17:26

Well, we tried to stay calm and deal with one issue after the other, you know. Um it it was quite challenging at times, I would say. Uh, and and people face these issues, and and you you talk about it together, of course, you try to find solutions. Um contractors can get very frustrated because they had their own plans, they have to replan, as you said, vessel uh become unavailable. You you have even more issues than you mentioned there, you know, like little accidents in yards which delay the the vessel being delivered again and all that you said earlier, yeah, the vessel was supposed to come at the end of uh 24, it actually arrived early 25. There were various reasons for that again. But I think the only way to deal with it is look at each issue, try and resolve it calmly, try and keep everybody informed in a transparent way, uh certainly uh towards the the the board and and the lenders. And I think in the end, everybody then realizes yes, this is a reality we're facing here, even though we don't want to face it, but the team is doing the right things to solve the solution, to solve the problem and find a solution to it.

SPEAKER_01 18:43

As a journalist following the project, going back far too many years, perhaps back to the early days of the project under the mainstream ownership. There was a sense during construction, certainly picking up conversations in the market. People were sceptical as to whether the project would ever get finished or ever be delivered, and whether it could be the first failure, let's say, in construction of an offshore wind farm. Was there ever a time where you felt we're we're in a sticky situation here and we may not get to the end?

SPEAKER_00 19:17

For sure there were times. There were times when we felt this project must be cursed, you know, and and there were there were people talking about there must be a saboteur in the lines, whatever you can come up with, you know, to think of what is the explanation of so many things going wrong on that one project. And as you said, there's even a history with mainstream and challenges at that time and so on. Did I ever think it wasn't going to be built? I think when we had the issue with the soils in the beginning and we weren't sure that uh we would find a good technical solution to it, there was a chance probably looking at that. At the same time, I always felt we have we were lucky to have these two strong shareholders. Who clearly want to build offshore wind parks, who stud and stand behind the project, and who wanted to make it a success. So I think there were small doubts at times, but they were very brief. And in the end, we managed to do the refinancing, we managed to find a technical solution, and uh we managed to do it actually with the contractors we started with, which I think ultimately was the right thing to do and a good decision.

SPEAKER_01 20:31

Well you know, when you when you are off the coast now on off the east coast of Scotland, and you you've been out there and you see the project uh now it's completed instruction. What are the things you'll personally take from this project into future projects?

SPEAKER_00 20:47

Well, as I said, I I can't help uh a sense of pride when I look at it, you know, and and thinking, well, that took uh in in my case, actually seven and a half years on the project to uh to get us there. What would I take forward? I think um see that you work with the right people, that you have the right people in the team, and that you also have the right people to work with, be it on the shareholder, on the lender, on the advisor side. In the end, it's about people. And if you got the right ones on board, I think you will solve the problems and you will bring a project to success.

SPEAKER_01 21:22

The sector is going through a difficult moment where developers are walking away from projects. You've gone through a project where you you've really dealt with you know an endless stream of challenges in the actual construction of a project and got there, you've persevered. Is there anything that you can take from the project or that you can say to the rest of the sector that is a message from such a difficult campaign and now that you've got there?

SPEAKER_00 21:52

Well, as you said, perseverance is important. I'm old enough to say I've seen a few cycles. I know right now we're probably in in a a bit of a valley, um, but I'm absolutely convinced we'll we'll see the industries thrive and go forward again, and uh in a few years' time the world will look very different out there. So if people find themselves in the situation, I would say hang in there, persevere, and you will be successful.

SPEAKER_01 22:22

In terms of like the dust has settled now on all the decisions that you and the team made during the last seven or eight years, is there anything that you would look back on? We talked about the drilling and that being the right decision ultimately, but is there anything else around the project that you would say, ah, I would have done that a bit different?

SPEAKER_00 22:44

You know, at the time when you're trying to to get contracts closed, you come to financial close and so on, there's always a big rush, you know. Everybody has very tight timelines, everything should happen as quickly as possible because it's very important to get to financial close. Maybe if you if you take a little bit more time in the beginning, you could think a few things through, you could maybe spend a bit more time in planning ahead. But I also know the reality is when you are in that situation and people want to get to financial close, they want to close these contracts. And is it realistic that you sit back and say, actually, it's better now to take another half a year to investigate these soils more or to look at more details in the design? It probably isn't, you know. So it's a nice thing to say, yes, it would be nice to have more time, but the realities of project finance and of project development are probably not allowing it even in in the future.

SPEAKER_01 23:45

So you're in commercial operations now. Can you tell us about how that's going and if the project is matching the expectation in terms of power output and performance?

SPEAKER_00 23:54

Yeah, let's talk about some positives. We we didn't mention uh the safety performance of the project, which was actually excellent. Um we we have uh an LTRF of uh less than one, which is uh good in any comparison of offshore construction, I think. Um so that went very well throughout the the years, um, and I think everybody in the team worked hard on that. Coming to the operation, again, a very positive story. Siemens was quite successful in commissioning these turbines relatively quickly. The second campaign of installation went fairly quickly, and since I think May this year, all turbines are commissioned, are operating, and working well. So we now see a fully operational wind park that produces in line with expectations, it has the availability of what it's planned for, and we're basically seeing uh the money coming in to hopefully pay back all that uh that debt that has been accumulated. But overall, a very positive outcome overall for the operational side of the project.

SPEAKER_01 25:00

We started by mentioning the award that's sitting on your desk behind you. Is that the cherry on the cake, as it were, after a really tough slog?

SPEAKER_00 25:12

I would say it is, yes. It felt really good to receive that award, that people outside the project, let's say, recognized the challenges we went through as a team, and uh yeah, it was fantastic to see it recognized, especially for the team as well. I think it was a great evening and it's really uh really welcome and appreciated.

SPEAKER_01 25:38

Well, Matt, I'm sure you'll put your feed up over Christmas and it's uh well deserved. Thanks very much for being on the podcast.

SPEAKER_00 25:43

Thanks everyone, Stephen. It was a pleasure.

SPEAKER_01 25:50

The Renews podcast was produced and edited by me, Stephen Dunn. Click subscribe wherever you get your podcast to make sure you never miss an episode. For more exclusive market intelligence on the renewable sector, see renews.biz.