Following rapid price falls, offshore wind companies must tackle growing merchant risks to ensure future projects remain competitive and supply facilities remain profitable, leading industry executives said.
The growing involvement of Oil and gas groups in offshore wind projects will generate significant cost savings in installation logistics and along the full operational lifespan, industry experts told Wind Energy Update.
Lower capital costs and installation efficiencies are driving down offshore wind prices but the UK's higher development and transmission costs will keep this April's auction prices well above Denmark’s 49.9 euros/MWh (43.7 pounds/MWh) contract, industry experts told Wind Energy Update.
Statoil’s record offshore wind lease bid gives it access to the high-load New York market for its first U.S. project but a power purchase agreement will require state support due to the large capacity size and nascent installation network.
The Blauwind II consortium bid a record Dutch price of 54.5 euros/MWh ($58.0/MWh) to win the Borssele 3&4 offshore wind tender, demonstrating how installation learnings and wider construction roles are allowing project stakeholders to establish a lower plateau of prices, industry experts told Wind Energy Update.
Average lifetime revenue for Vattenfall’s Kriegers Flak project in Denmark is forecast to be 20% lower than the record-low bid price and reflects falling CAPEX and cost of equity in the growing offshore wind market, Tom Harries, Wind Energy Analyst at BNEF, told the Offshore Wind Europe conference on November 22.
Predicted sharp growth in U.S. offshore capacity will require innovative insurance products based on early insights into technology choices and lessons learned on onshore operational risk, insurance industry experts told Wind Energy Update.