Interview with the new chairman of iro: Mark Heine

His view on the state of affairs, challenges and future of the dutch offshore energy industry.

The starting point is people, planet, profit (or, better still, prosperity). On many of the main climate conferences organised in the world, the often-heard catch phrase is: “If you want to go green, you have to go blue.” The marine environment isn’t just a source of energy, it also offers endless possibilities for transport, infrastructure, and food. The growth potential is enormous, and the Dutch offshore industry sits front row to help develop this next big frontier.

What is in your view the state of affairs of the offshore energy industry?

The offshore energy industry is a vibrant and innovative sector with a clear “we can do it” mentality. Operating strongly across borders, all sector players have to deal with international developments. We play a part in some of the major societal themes of our time, like energy security, development of renewable energy sources and climate change adaptation. The sector is well-equipped to drive positive change. Due to the awful war in Ukraine and geopolitical developments we face unprecedented impact on energy supply and security of energy supply. Both can’t be taken for granted anymore and will remain important themes in the upcoming years. The costs of energy will rise.

As a result, the world faces economic downturns, inflation and insecurity of energy supply. The IMF predicts that the global GDP will slow down from 6% to less than 3% in 2023. IMF also predicts that the inflation rate will be at least 9%, and in some countries (especially European countries) even more. Costs will rise and it will probably continue for some years. We have to deal with these challenges and speed up. Besides these global economic challenges there are challenges to reduce carbon emissions to stop climate change. The energy transition is one of the major initiatives to limit CO2 emissions.

The offshore energy industry is an important player in the energy transition. Offshore wind, hydrogen and tidal energy will be important renewable energy sources. Hydrogen and marine energy are in initial phases and not yet major energy suppliers as offshore wind farms already are. Wind at sea is the current star. The sector will grow from 2023 onwards with more than 20% per year! Hydrogen is currently a small market; globally 8-10 billion euro in investments. Experts expect that it will double in the upcoming years. So, the future is bright for the offshore energy industry. For sure when we consider that in 2050 more than 75% of the global renewable energy will be produced by renewable energy sources like wind at sea.

What are the challenges of the Offshore Energy Industry with regards to the energy transition?

The energy transition has many challenges, offshore and onshore. For instance, the onshore energy grid needs to be expanded. Some 16,000 engineers are needed for that. Will we be able to attract and train enough qualified personnel? The Netherlands aims to generate 4.5 GW from offshore wind farms in 2023. In 2030 this should be expanded to 21 GW. Can we build these wind farms in fast-track mode? Yes, we can. But can the offshore wind energy be optimally used in the current grid on land? Not just yet, it seems. Furthermore, the new wind farms need to be maintained. We need extra qualified personnel for that. And the Netherlands is not the only country working on energy transition. For direct and daily import and export of energy many countries are intertwined. So, the energy transition is not just a national issue. It can’t be solved locally. We must cooperate. On national level and regionally between countries, and certainly between companies too. As many companies in the offshore energy industry operate internationally, we are used to collaborating with all kinds of partners. We love to bring in our expertise, knowledge, and international network.

A nice example is the current cooperation between Denmark, Germany, and the Netherlands to develop energy hubs to create a smart and efficient energy distribution system. Like many industries the offshore energy industry face a shortage of qualified technicians. By the way this counts for the whole maritime cluster. The offshore energy industry is changing rapidly. It is not only oil and gas. It is much more. The offshore energy industry contains wind farms, hydrogen, solar energy, maritime energy but it also contains supply of critical raw materials for the purpose of the energy transition. Due to these developments the work in the offshore changes rapidly. To fulfil these great new challenges the sector needs qualified technicians. Newly educated technicians but also lateral inflow of technicians from other industries.

Another challenge is to expand and transform the fleet needed for the operations at sea. This transformation focuses on two main objectives: sustainability and cost efficiency. All our members are taking these two objectives constantly into account. My own company Fugro took uncrewed surface vessels in operation. These vessels don’t require personnel on board and can help to reduce carbon emissions by up to 95%. Another example: Van Oord ordered an offshore installation vessel that will be powered by methanol, so a lower CO2 footprint, and that, at the same time, can install huge 20 MW offshore wind turbines!

What are the main opportunities of the offshore energy transition?

The price of oil rose more than 40% (Brent-price) compared with last year and gas almost two-thirds. This means that investing in offshore rigs is interesting again. We still need oil and gas. However, their role in energy supply will decrease. Other forms of energy supply like wind energy and hydrogen will increase as said. I already mentioned that the growth of the global wind energy business will be at least more than 20% annually. In the meantime, other offshore energy solutions will become part of the energy mix, like hydrogen and maritime energy. Currently wind farms are being placed further and further out to sea. This demands efficient transport of energy over longer distances. This is why energy hubs in sea will become crucial. As mentioned, Denmark, Germany and the Netherlands cooperate to develop such offshore energy hubs. Others are planning to follow. So not only building all necessary installations and infrastructure is good for the long-term perspective but also the rising demand for maintenance.

How would you describe the main characteristics of Dutch offshore energy industry?

I will use only four words to characterise the whole sector: sea, innovation, enterprising and cooperation. You will find these four characteristics in every company in the offshore energy industry. An ideal set of values to make things happen at sea. We’re entrepreneurial and continue to join forces to innovate and tackle any challenge our clients have in marine environments. Many have forgotten that the IRO once started as the Industrial Council for Oceanology, an organisation that brought together in-depth knowledge of mining, coastal waters technology, fishery and oceanological technology. That knowledge still sits with our members and fits perfectly with the future.

How would you describe the ideal role of IRO in this current turbulent and complex environment?

IRO has been there for more than 50 years. Over the decades it developed into a strong network organisation and an important export promoter for its members. I believe there’s an opportunity for the industry to increasingly become a conversation partner for the government, NGOs and other stakeholders. As the association of Dutch suppliers in the offshore energy industry IRO is the ideal interlocutor for the Dutch government and EU. IRO and all its members can be a source of knowledge and new ideas. Together, we can come up with good solutions for the energy transition, for infrastructure, for the protection of the natural environment and everything else for which we need the sea. The starting point is people, planet, profit (or, better still, prosperity). On many of the main climate conferences organised in the world, the often-heard catch phrase is: “If you want to go green, you have to go blue.” The marine environment isn’t just a source of energy, it also offers endless possibilities for transport, infrastructure, and food. The growth potential is enormous, and the Dutch offshore industry sits front row to help develop this next big frontier.

Sustainability is the future. What is in your view the future of the sector?

As I stated earlier the energy offshore industry is going through a transformation. All our members embrace sustainable development. They all work in their field of expertise and businesses to develop sustainable products and services. For instance, our sector is working together on sustainable propulsion systems for vessels, based for example on methanol. This will have a great impact on lowering carbon emissions. We will also further development of remote operations and more application of robotics. This will help to create faster and safer operations at sea, whilst at the same time reducing carbon emissions with lighter assets and less emission-heavy transport of people.

Most of the companies in the industry, if not all already, have clear net zero ambitions. I’m certain we are going to achieve our goals. We must. The future is bright.