Sea Change German Shipyards See Future in Wind Power

Ingo Wagner / DPA


Part 2: Problems with Financing

Marutz isn't the only one with financing problems. All of Germany's shipyards are in a difficult position with banks. Most have a poor credit history. There are hardly any large shipyards that were not bankrupt or almost bankrupt at one point. Many scrape by from one state-backed guarantee to the next.

It is difficult to plan in regard to such offshore projects, most of which are worth billions of euros. Any one of them could, in a worst-case scenario, spell a shipyard's downfall. A €5 billion program to support the offshore industry, run by German state-owned bank KfW, has so far benefited only the wind farm operators. Shipyards have sometimes had to turn down major contracts, because the cost of obtaining the necessary bank guarantees is so high.

Jürgen Grossmann, who retired as head of energy giant RWE this June, complained at the recent launch of two special-purpose ships for the company's own wind farm that not a single German shipyard was willing to build these ships for him for €100 million. The reality is that several shipyards were interested, but high financing costs made their bids much more expensive -- or they didn't obtain the guarantees they needed at all.

Marutz takes a matter-of-fact view of things, but there's clearly a note of bitterness there as well. When Germany made the decision in the 1950s to obtain its electricity from nuclear power, he says, it was still the good old days of "Deutschland AG", when German companies, banks and the state worked together as a team. The government placed orders, provided financing and shouldered a share of the risk. There was even a minister in charge of nuclear energy. "Now the government wants to transition to renewable energy, but all the risk lies with mid-sized Mittelstand companies like us," Marutz says.

'The Energy Revolution Will Fail'

The initial offshore euphoria among German shipyards has long since given way to a soberer assessment. One example of this is the Nobiskrug shipyard, which has facilities in Rendsburg and Kiel in northern Germany. The shipbuilder, which became part of the Abu Dhabi Mar group four years ago, is one of the first ports of call for billionaires. Nobiskrug doesn't manufacture any yachts under 60 meters long, and is just as happy to make them 100 meters. But luxury yachts are a difficult business. If no new orders come in for one or two years, the shipyard comes to a complete standstill. The offshore industry is meant to provide a second, dependable line of business.

Nobiskrug is currently building a small platform for RWE's Nordsee Ost wind farm on behalf of Siemens, but construction is behind schedule. Shipyard director Susanne Wiegand is sure of one thing based on her experiences so far: "The way this industry is organized at the moment, the energy revolution will fail."

These projects haven't been profitable for the industry, she says, partly because there are no specific, consistent standards, meaning every provider ends up experimenting with each new project. Additionally, safety regulations for wind power platforms currently follow the strict specifications for oil and gas platforms, even though, in contrast to the latter, people only set foot on the wind power platforms occasionally, to perform maintenance work. "Of course safety always comes first," Wiegand says, "but in some respects the rules are unnecessary, inappropriate or contradictory. That makes it horrendously expensive and insanely complicated."

The shipyard itself doesn't have full control over construction in any case, since Siemens is RWE's general contractor for this project and it is Siemens that decides which company lays the cables or installs the ventilation for the platform, and when it happens. The lesson Wiegand has taken away from the project, she says, is that "in the future we'll only build platforms that we have designed ourselves and where we alone have the say."

Thinking of the Future

Nobiskrug is working together with an engineering company to develop its own model that energy utilities could order directly. "The shipyards are almost always the last link in the chain," Wiegand explains. "We don't get the opportunity to show we're capable of successfully completing these sorts of projects."

The competition at Nordic Yards is thinking along similar lines. The company has designed its own ship to be used for erecting wind turbines, and hopes to use it to assemble entire wind farms. Nordic Yards is currently hiring 100 engineers for this work. "We want to be able to provide a one-stop shop," explains technology director Wegener.

His greatest dream, though, is something much simpler. "When people hear the word 'shipyard,' I don't want them to think of rusty steel, but of the future."

Translated from the German by Ella Ornstein and Daryl Lindsey


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