COP26: EIC's Supply Chain Case Study Series - Aker Solutions (Day 1)

COP26: EIC's Supply Chain Case Study Series - Aker Solutions (Day 1)

01 Nov 2021

The EIC's Supply Chain Case Study Series will highlight key EIC Survive and Thrive Insight Report case studies all throughout COP26, highlighting the success stories of the energy sector in decarbonisation and innovative new energy transition technologies.

On Day 1 we look at Aker Solutions and their target for a cleaner, greener mission.

How is Aker Solutions thriving?

Motivated by the opportunity to champion a greener, more sustainable future, Aker Solutions has taken difficult albeit rewarding steps away from oil- and gas-related activities towards delivering market-leading services and solutions to the renewable energy market, its transition underpinned by a new £1 billion offshore wind contract.

The challenge

Founded 180 years ago, Aker Solutions is one company that has made significant contributions to these economic advancements. With origins tracing back to a small mechanical workshop found on the Aker River in Oslo in 1841, the company's near two-century-long activities have varied  over the years from shipbuilding and manufacturing to the provision of oil and gas industry services.

It is the latter of these which has formed the basis of business for Aker through the 21st century, where it has helped to address environmental pressures in oil and gas with low carbon solutions. Yet, as circumstances change, Aker has recognised the need to adapt.

The winds driving its sails have shifted and Aker is now driven to deliver expertise for not only the oil and gas sector, but rising renewable energy verticals

A period of transition has been required in order to achieve this transition, and with that has come challenges. Not only does a shift towards renewables entail an alteration in product and service provision, but equally the company's culture and identity.

For Aker, this is a long-term, gradual, holistic move that offers little in the way of quick wins. In pursuing its new vision, it has had to shrink its core base and become leaner in order to successfully capitalise on the relatively limited renewable opportunities and survive through a period of significant adjustment.

The solution

Progress has already been made, however. Renewables are not entirely alien to Aker, the company having begun looking at carbon capture technologies as early as the 1990s. Over the last decade, it has also been transforming technical capacity in the area of offshore wind.

Aker's legacy includes significant work in offshore oil and gas projects that share similarities with the emerging offshore wind industry, and 2018 saw the firm invest in Principle Power - a move that provided a leap forward in the way of technical expertise and ensured the successful establishment of Aker Offshore Wind.

In February 2021, Vattenfall announced that Aker Solutions together with Siemens would be their preferred bidder if Vattenfall starts a development project for the Norfolk Offshore Wind Power Zone. In the potential project, Aker Solutions' scope can include deliveries of HVDC converter platforms and other parts of the infrastructure.

Through this project the firm will leverage its oil and gas engineering experience and existing equipment to develop optimised HVDC transformer platforms that will significantly reduce topside weight on the offshore wind farm. In doing so it will minimise the need for scheduled and unscheduled maintenance and ensure the infrastructure will be able to operate almost entirely remotely.

This contract is significant. Valued at approximately £1 billion, it provides demonstrable evidence of the company's success in energy transition, no better signified by a shift in its revenue sources.

And its progress on a financial and technical front are not the only ways in which the company is making great strides towards a cleaner, greener future. Aker's chairman Kjell Inge Røkke has invested heavily in ocean clean up ventures and has been working alongside the World Wildlife Fund, for example.

Like many companies, the COVID-19 pandemic has affected Aker and placed some hurdles in the face of its ambitions. Yet it has also brought to life some structural benefits that will benefit the firm in the long term. 

Remote working, for example, has been recognised as a sustainable model that brings many benefits to the table. Not only has it facilitated a lower fixed cost base with smaller core teams on site, but it has additionally allowed the company to leverage expertise from all over the world and better pull in key resources for projects at short notice.

Indeed, while recent times could be characterised by upheaval and complications for Aker, internal and external changes have also led to progress and positive change. Looking ahead, the company is targeting 33% of revenues from non-oil activities by 2025 and hopes that two thirds of its business will be motivated by renewables by 2030.

Against a backdrop of an accelerating global energy transition towards sustainable power, supported locally by Norway's strong pro-green KPIs, Aker's proactive approach will stand it in good stead to achieve both a more diversified and sustainable business model in the long term.

About Aker Solutions

With over 180 years of experience, Aker Solutions helps the world meet its energy needs. The company engineers products, systems, software, and services required to unlock energy. The company's experience spans shallow to ultra-deep waters and tropical to arctic conditions. From subsea to surface and concept to decommissioning, Aker Solutions' technical expertise and strong partnerships provide energy companies what they need to succeed.

Aker Solutions has 12,000 employees in about 20 countries around the world - all embracing innovation and collaboration in a drive to create a sustainable future.

Read the full EIC Survive and Thrive Insight Report here.

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