Interview: Steve Dayney, Head of Offshore N. America, Siemens Gamesa
(Article originally published in Nov/Dec 2022 edition.)
It’s a watershed moment for offshore wind in the U.S. as supply chain problems persist, costs spiral upward, and the federal and state governments vacillate on their commitments. But Dayney is up to the challenge. As a civil engineer and wind energy veteran, he has both the skills and credentials to guide Siemens Gamesa’s expansion into the growing U.S. market for offshore wind.
Let’s start with you, Steve. Tell us about yourself – your background and education.
Sure. I'm an engineer by training, a civil engineer with a degree from Purdue. I also have an M.B.A. from the University of Colorado that I got 20 years after I graduated from college. But I've been in the electrical energy industry my entire career. My first job out of Purdue was working for the utility in Colorado, laying out and designing transmission lines all over the state. I progressed through the ranks with a series of jobs with that utility and a number of successor companies – project management assignments, mergers and acquisitions, policy development – really all kinds of different roles within different companies.
I first got into the wind business in the mid-1990s, developing Colorado's first utility scale wind farm. In the early 2000s, I took a job with a German wind turbine manufacturer to start up their operations with onshore wind in the U.S. And in 2018 I joined Siemens Gamesa to start up their offshore wind business.
So I've been in the wind business in one form or another for close to three decades, and it's just been a terrific career and really a lot of fun and excitement. I'm particularly excited to be involved with the offshore wind industry at a time of incredible growth and demand and activity in this sector of the energy industry.
Where are you based?
My business card says Orlando, but I'm really based out of all three of our offshore offices. One is in Boulder, Colorado; another in Boston, where I probably spend the most time, and then Orlando, my home office, where we are today. We also have an operational presence in Virginia Beach, Virginia, to help manage the big Coastal Virginia Offshore Wind project.
Wow, all over the U.S.! So give our readers a brief overview of Siemens Gamesa. Is it the world's biggest offshore wind company?
Yes, we are. We’re the world's biggest offshore wind turbine manufacturer. We’ve built and installed more than half of the world’s offshore turbines, excluding China, starting in 1991 when we became a pioneer in offshore wind by installing the world’s first offshore wind farm, Vindeby, off the coast of Denmark. We have over 19 GWs of offshore wind turbines that have been installed and more than 6,000 employees involved in our offshore wind business. We've got an orderbook of over $10 billion. Now, as the global market leader and with a growing imperative to meet climate challenges, we’re more determined than ever to be part of the solution, powering the future of the industry.
When did it begin operations in the U.S.?
Siemens and then Siemens Gamesa have tracked closely the development of the offshore wind market in the U.S. for the last 15 years or so, and we've installed more than 1,500 of our direct drive turbines across the Western Hemisphere. So it's a very large part of our business and a growing part of Siemens Gamesa's overall business.
But as you well know, the challenges of getting a utility-scale, offshore wind project built in the U.S. have been significant and have taken literally decades to achieve. Siemens was involved in some of the early project development activities and actually provided proposals to a couple of different companies to build projects, which never came to fruition. And some of those projects wound up casting a very long shadow over this industry, which we only now are stepping out from.
So we've been involved in the U.S. market for a while, but it’s only been in the last four years or so that we’ve really dedicated a significant amount of resources, both here and in Europe, to the U.S. offshore market.
What is Senvion, and what is its relationship to Siemens Gamesa?
Senvion was a German wind turbine manufacturer that filed for insolvency in 2018. Coming out of that insolvency proceeding, Siemens Gamesa acquired a significant portion of Senvion’s intellectual property, as well as some assets and service contracts in select countries. In North America, we have negotiated new service contracts for some portion of the sites that have Senvion turbines.
A year ago in this edition we featured Josh Bennett of Dominion Energy, your partner in Coastal Virginia Offshore Wind, the biggest project in the U.S. today at 2.6 GWs. Did you ever think you’d be in charge of building one of the world’s largest offshore wind farms?
No, I never did. I never did, in my wildest imagination, think I could have some responsibility for or be involved with the largest offshore wind project in the U.S. It's a huge project in so many different dimensions, so we're very pleased to be involved.
How big are the turbines?
It depends on how you define “big.” Our largest turbine, the SG 14-236, has an electrical output up to 14.7 MWs, and the blades are 115 meters long.
Okay. As a maritime publication, we’re particularly interested in the nautical aspects of offshore wind. What has been the impact of the Jones Act on your operations and what U.S.-based vessel companies are involved?
I'll start off by saying that all our operations will be in compliance with the requirements of the Jones Act. It’s the law of the land. The impact is that there’s been one announcement after another to build Jones Act-compliant vessels to serve the growing offshore wind industry. Whether it’s Dominion Energy’s Charybdis, the U.S’s first Jones Act-compliant offshore wind turbine installation vessel, currently being constructed by Keppel AmFELS at its Brownsville, Texas shipyard, that we use or some other, we intend to charter a service operation vessel for the Coastal Virginia project. Our customer Ørsted has announced multiple vessel builds here in the U.S. to support its portfolio of offshore wind projects, and other companies have also announced new vessel builds to serve the growing U.S. market.
Excellent. Are there other offshore wind projects in the pipeline for Siemens?
Besides the Dominion project, we’re also supplying turbines to Ørsted's Northeast program of offshore wind projects, three of them, including South Fork, which is the first that will be built, followed by Revolution Wind and Sunrise Wind.
What do you see as the future of offshore wind in the U.S.? And what are some of the major challenges to get there?
The future for offshore wind is both exciting and challenging. We’re building an entirely new industry in this country with massive investments in infrastructure, factories, vessels and people. Goals for development of offshore wind are being set by state demand for offshore wind energy and by the federal government's support in terms of leasing portions of the Outer Continental Shelf to developers for offshore wind development.
It's really a very exciting time. We're going from nothing to a very large industry in less than a decade. The challenges are manifold – getting the port infrastructure developed to handle these incredibly large and heavy components, getting vessels built that are compliant with the Jones Act to allow us to both install and maintain these turbines, getting enough people involved in the industry. Hiring is going to be a big challenge for all of us.
And perhaps the biggest challenge is the fact that we're currently living in a period of economic volatility and uncertainty and inflation that we haven't seen in 40+ years. And that is challenging the entire value chain involved with offshore wind. There’s also the extremely long period of time it takes to permit these projects and the challenges that brings to supply chains and to developers to commit to prices today if a project isn't going to be built for five, six, seven years.
And lastly, we’ll need to have very large transmission lines built to transmit all this power that's going to be generated out in the ocean to the load centers where the energy will ultimately be used.
Do politics and regulatory issues play an important role here? Will subsidies be necessary to sustain the offshore wind market?
Politics and regulatory issues definitely play a role in creating the right environment for clean energy development, and the current administration in Washington is certainly more friendly to the wind industry than the previous one was. But the bigger challenges are the ones I've already mentioned – infrastructure, people, inflation and macroeconomic volatility. Those are really big challenges.
As to the need for subsidies, I don't view this as an industry that has any more or less subsidies than any other form of energy. Fossil, nuclear, solar – you name it – they're all subsidized to one degree or another through the tax code or other political and regulatory mechanisms. And there’s plenty of competition among developers to build the wind farms. That competition, along with advancements in technology by companies such as Siemens Gamesa, will play a key role in meeting the big growth targets in our industry.
Okay. Is Canada part of your territory too?
Yes. I look after Canada.
What’s the state of offshore wind development there?
Canada is behind the U.S. in terms of setting up the necessary regulatory and political environment to enable offshore wind to become a reality at large scale. There’s movement in the Maritime provinces to start that process, but I’d say they're lagging behind us by five to 10 years. There’s lots of onshore wind, of course, like here in the U.S.
Is Siemens Gamesa involved in producing so-called “green” hydrogen – making hydrogen, seen by many as the marine fuel of the future, from renewable energy?
Yes, we’re involved in green hydrogen. We’re one of the first, if not the first entity, that is producing hydrogen from clean, zero-emission, renewable energy from a wind turbine. And we’re devoting significant resources to evaluating the possibility of generating hydrogen at scale from offshore wind projects.
What’s your biggest challenge right now?
I'd say our biggest challenge right now is extreme volatility in the supply chain with inflationary pressures we haven't seen for over 40 years. They're impacting every aspect of our business and how we interact with our customers, suppliers and other parties. It’s something that we’re very, very focused on at the moment.
Looking into your crystal ball, where would you like to see the U.S. offshore wind industry in, say, five years? Is the stated goal of 30 GWs by 2030 achievable?
Five years from now I'd like to see a dozen or more projects either having been built or under construction, and I'd like to see Siemens Gamesa having a significant share of that market for turbines. I'd like to see the supply chain built up to support the industry up and down the East Coast and meeting expectations of the states that are procuring offshore wind from our customers.
Are current goals, 30 gigawatts by 2030, achievable? Absolutely. I’m constantly amazed, surprised and pleased by American optimism and can-do attitude when given a challenge. The only wrench that could be thrown into the operation is if states or the federal government walk back some of the commitments they’re currently making to achieve that goal.
Absolutely. As an engineer, what excites you most about your job?
This is an incredibly exciting job if you want to be involved in really big stuff and building up a big, big and brand new industry basically from scratch. To be a part of that at this stage of development of offshore wind here in the U.S. is incredibly exciting to me.
How would you describe your management style?
I'm a collaborative decision maker. I like to listen to others’ opinions. And I'm a firm believer that people are what make a good manager. If you hire good people, you become a good manager. I also like being involved in the details but at the same time pride myself on being able to see the big picture.
Outstanding. What do you like to do in your spare time? Do you have any hobbies?
Well, I'm a runner, a bicyclist and a very enthusiastic snow skier. I also like fly fishing. So mostly outdoor-oriented activities. Unfortunately, none of them involves a boat – unless it's a raft floating down a river!
Tony Munoz is Publisher & Editor-in-Chief of The Maritime Executive.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.