Global monetary funding for offshore wind capability set data in 2020, in line with new analysis launched final month. Data from the Renewables Consulting Group’s (RCG’s) Global Renewable Infrastructure Projects (GRIP) database exhibits that the full capability financed for offshore wind final 12 months reached eight,370 megawatts (MW) throughout the European, Americas and Asia Pacific (excl. China) areas, eclipsing the earlier whole of 6,438 MW financed in 2018. Global funding for offshore wind additionally set new highs final 12 months as funding reached USD 30 billion, surpassing the earlier excessive of USD 22 billion set in 2018.
“Global offshore wind continues its extraordinary progress,” explains Maxwell Clarke, an Associate in RCG’s market intelligence workforce. “Despite the pandemic, 2020 noticed extra offshore wind capability financed than any 12 months earlier than. Across international markets, report capability investments weren’t solely seen in agency commitments to construct initiatives, but in addition in capability acquired via mergers and acquisitions.”
Several notable offshore wind initiatives, similar to Dogger Bank A&B, the world’s largest offshore wind mission, reached their remaining funding selections (FID) in 2020. The FID – the purpose the place main gear orders are positioned, and contracts executed for the engineering, procurement and building stage – signifies that builders and homeowners/operators have made a agency dedication to maneuver ahead with the mission.
Route to market
Each nation the place offshore wind initiatives attained the FID milestone – the United Kingdom, France, Netherlands, Germany and Taiwan – utilized some sort of framework settlement such because the UK’s contracts for variations or the feed-in-tariff mannequin utilized in Taiwan and China.
“Our evaluation demonstrates the significance of markets having a correct route-to-market to push offshore wind initiatives to completion” notes RCG’s Clarke. “The construct out of commercial-scale offshore wind globally stays centered on markets with structured path to market mechanisms lowering funding threat.”
The UK noticed greater than three,658 MW in capability safe funding with 2,950 MW supported by the contracts for distinction (CFD) mechanism. In the Netherlands, the centrally deliberate and developed Hollandse Kust Zuid and Hollandse Kust Noord websites have been superior via the subsidy-free tendering mechanism allocating a mixed 2,299 MW in capability.
In Taiwan, the Changfang and Xaido initiatives reached FID having signed energy buy agreements (PPAs) with an related feed-in-tariff (FiT) as a part of the Zonal Application planning course of, permitting 589 MW to maneuver to the pre-construction section.
In France, the Saint Brieuc and Fecamp initiatives each reached FID after being awarded FiTs in 2018 (after revisions to the FiT charges beforehand awarded in 2012). In Germany, Innogy (as a part of RWE Renewables) dedicated to the Kaskasi 2 mission in April, after successful the second interim tender for offshore wind in Germany.
The UK led the best way with each CfD subsidy secured and service provider supported initiatives from the third allocation spherical (AR3) in 2019 committing to agency investments. The Seagreen Alpha and Seagreen Bravo mission, initially developed by SSE Renewables, notably reached FID in June with oil and gasoline main Total partnering them on the mission. The CfD awarded for the Seagreen mission covers 454 MW of the mixed 1,140 MW website, or 39% of the mixed capability for website A and website B.
Seagreen will subsequently be the primary commercial-scale offshore wind mission in Europe to be majority-funded with out subsidy assist. Total’s partnership on the mission each raised the required capital for the funding determination and de-risked the funding for the mission. The French oil main acquired a 51% curiosity within the mission as a part of the acquisition.
Elsewhere within the UK, having additionally secured a path to market within the AR3 CfD public sale the Dogger Bank A&B initiatives reached FID in November. While the mission companions Equinor, SSE and Eni have solely progressed the primary two…