Twice the cost but 'fully American': Kalypso insists first US-built offshore wind cable vessel can pay off

Startup Kalypso signed a letter of intent with Dutch shipbuilder Royal IHC for the engineering and design of a US-built, Jones Act-compliant cable laying vessel (CLV) to serve the offshore wind sector – a first for the nation.

The Jones Act bans foreign-flagged vessels from calling in at consecutive US ports or points on the outer continental shelf, including wind turbines, forcing the use of domestically built ships or logistical workarounds that add complexity and cost.

CLVs have so far been exempt from Jones Act compliance, and with American shipyard prices easily exceeding global norms by 50% or more, Kalypso is alone in looking for a US built cable layer.

Founder and CEO Colin Smith said the company aims to be “above reproach” in adhering to US law.

“We don't want to be seen as taking shortcuts or finding loopholes,” he said. “If we’re going to do it, we’re going to do it right,” Smith said, including meeting “all the criteria that makes the vessel fully American.”

“The cost of building the vessel here is substantially more than anywhere else in the world,” he conceded.

“But if you are able to able to amortise the vessel over 20-25 years, your day rate, whilst it is impacted by the cost of the vessel, it is not going to blow it out of the water.”

Moreover, Capex is just the start of total vessel expenditure, and the operational flexibility offered by a fully Jones Act-compliant vessel would mitigate the initial outlay.

“Your real impacts on your day rate is your Opex [operational expense], it's your manning, it's those kinds of things that really have a material impact,” he said.

Foreign-flagged CLVs are permitted to lay cable in US waters but are banned from dropping crew off at separate ports, shipping spare cable or doing repairs on existing cable, all of which require the project installer to add logistical steps, including deploying more vessels, contributing to higher total costs.

Moreover, the use of a foreign-flagged CLV can add a month or more to the vessel's total mobilisation for the weeks-long journey from Europe.

“Even though the day rate of the vessel that's Jones Act compliant is a bit more expensive, the overall impact to the project is mitigated by the fact that you're not having such a such a long mobilisation,” he said, adding they estimate they can offer cable installation within 5% of current prices by European firms.

Vessel shortage

Smith and Kalypso's co-founder Owen Rataj from Scotland met while with a maritime contractor for the installation of Orsted’s South Fork Wind array.

That experience revealed the ancillary Jones Act constraints on CLVs and their impacts, along with the looming global vessels shortage.

As installation firms are already needing to shuttle vessels transatlantic to serve both the US and North Sea sectors, a Jones Act-compliant CLV could be the basis of an American “tier one contractor that can compete with the European contractors,” said Smith.

He said the company is speaking with some of the top US shipbuilders, including Bollinger, Fincantieri, and Philly Shipyard among others, but has not signed any agreements beyond its LoI with Royal IHC. Kalypso is targeting commissioning a CLV by 2028.