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Posted 17/02/2016

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Troubled OWS struggles in a competitive field

German services provider Offshore Wind Solutions revealed this month it is looking to cut 100 jobs —or one-third of its workforce —after failing to secure sufficient work in the North Sea. This problem has been a long time coming.

So far, the firm’s fortunes have been tied up with the 400MW Bard Offshore 1, which is Germany’s largest operating offshore wind farm and has a troubled history. In fact, OWS came into existence as a result of this project.

German developer and manufacturer Bard Group started construction on the project in 2010, and it was meant to come online in 2011. But the group experienced several major setbacks and overruns, so it was only officially commissioned in August 2013. Three months later, Bard Group announced that it had gone bust.

OWS was formed out of the wreckage of the Bard Group, taking over its premises, ships and 300 members of staff. It also inherited the operations and maintenance responsibilities for Bard Offshore 1, which has continued to experience difficulties and setbacks, most notably with cable connections.

The result is that, for months at a time, many of the project’s turbines have not been directly feeding energy into the grid. This is a huge time drain for those at OWS, and has taken up time and energy that the firm could have been using to win new work.

But why hasn’t OWS been able to win enough new deals? It should still be possible with 300 staff and a track record of dealing with complicated projects.

There are three main factors at play here. First, while offshore projects appear to be proliferating in the North Sea –over 2GW of new capacity was installed in German waters in 2015 –in reality that only represents a handful of projects. OWS faces competition for O&M contracts from much bigger rivals.

Second, we cannot help but feel the troubled history of Bard Offshore 1 casts a long shadow. It was never going to be easy for any firm still linked to Bard.

And third, we feel OWS became a big company the wrong way —through no fault of its own. It was not able to start small and acquire experience across a range of minor projects and sectors while slowly diversifying and expanding. Rather, OWS started with hundreds of staff and a giant project that has guzzled its resources.

It was never going to be easy, but the fact is that OWS started in a tough race and the legacy of Bard has weighed it down. It will hope this restructuring can be the start of a new era.

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