With the announcement of the latest Contracts for Difference Allocation Round 3 results to offshore wind projects, we thought it timely to address the emerging trends surrounding this asset class.
#1 Global Push
The global push for reduction of greenhouse gases and increase in renewable energy is causing the offshore wind industry to evolve from what was a largely European industry into a global one.
#2 Transfer of capabilities across organisations
This, more global industry, requires transfer of capabilities across organisations, which often happens through Joint Ventures agreed for the development of projects.
#3 Reduction in costs
As technology and the industry become more mature, the cost of projects is going down with strike prices in the UK at record low.
#4 Projects moving further offshore
Projects are starting to move further offshore and at an increasing depth, creating current technology challenges which need to be overcome (e.g. foundation types, installation methods).
#5 Increase in competition
Global growth is causing increased competition around the supply chain.
To find out more regarding our point of view on Offshore Windfarms please see the following publication Offshore Wind Capital Projects.