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Sea Wind Europe

Helen SnodinBWEA Offshore 2004

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Contents

1. Background2. Scope3. Findings4. What does it mean?

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Background

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Greenpeace Question

Could offshore wind energy become a core part of

Europe’s energy supplies?

• Could this be achieved by the end of the next decade?

• As well as the global environmental benefits, would it bring other benefits to Europe?

• What would need to happen along the way?

A focus on identifying, and overcoming, obstacles

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Premise

Why is it not already obvious?

• Global environmental benefits accepted

• Sceptics not convinced it can make it in the real world

• ….so, work through challenges one by one

• Show by example and logic

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Approach

• Deliberately bold

• Start with a target – 30% - and work back

• Tease out challenges and actions

• Result – if this is what we want, it will not be possible unlesss….

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Scope

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Chapters

What are the implications for…

• Growth rates• Sea-bed take / scale of development• Investment• Technology • Costs• Grid• Social issues

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Findings

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Growth Rates

0

50

100

150

200

250

300

1990

1995

2000

2005

2010

2015

2020

Year

GW

In

stal

led

Wind energy to-date

BTM predictions IEA predictions

SeaWind Europe postulated offshore wind growth

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Growth Rates

• Growth in wind energy terms looks achiveable

• In offshore terms, it is very ambitious

• Installation volumes are very large at steeper parts of curve

• Major constraint is the number of projects coming through the permitting system

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Scale of development

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Where will the investment come from?

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Investment: current

• In today’s markets, commercial-sector investment a necessity

• With exception of Middelgrunden, investment to-date has been on balance sheet. Private equity structures emerging for some German projects.

• Traditional model for wind is project finance.

• Commercial banks will invest as financial risks defined.

• There is a gap where uncertainty remains, which will be repeated as projects move into deeper/ more exposed environments and as technology develops.

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Investment: future

• On average, would require €14-24 Billion per year capital investment (wind is capital intensive)

• SeaWind Europe would represent a significant proportion of all project finance deals, but is comparable to the scale of investment in energy sectors.

• New finance structures (for wind sector) for offshore wind?

• Other sectors have momentum. There needs to be a “belief” that there will always be a market for offshore wind.

• A clear role for institutional banks to bridge some of the investment gaps

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Technology

Reinforced plastics

Everyday use in manufactured goods, esp. similar to composition in aerospace and boat-building.

SeaWind Europe would require growth in specialist wind industry suppliers. If C-reinforced blades grow, longer lead-times required.

Steel

Predominant in heavy engineering, high recycled component. World steel suppliers & manufacturers need new markets – ready-made facilities

Steel and/or concrete

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Making use of existing skills and facilities

Sif Shipyard, Holland

Burmeister & Wain Shipyard, Denmark

A2Sea, Nysted

Isleburn, Scotland

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Investment: future

• On average, would require €14-24 Billion per year capital investment (wind is capital intensive)

• SeaWind Europe would represent a significant proportion of all project finance deals, but is comparable to the scale of investment in energy sectors.

• New finance structures (for wind sector) for offshore wind?

• Other sectors have momentum. There needs to be a “belief” that there will always be a market for offshore wind.

• A clear role for institutional banks to bridge some of the investment gaps