Europe’s Offshore Wind Market Doubles as Financing Ramps Up

Europe’s offshore wind capacity more than doubled last year, as a record year for financing of the technology laid the path to further growth in coming years.

A total of 3,019 MW of wind turbines were connected at sea to power grids in the U.K., Germany and Netherlands, the only three European nations to complete projects in 2015, the European Wind Energy Association said on Feb. 2 in an e-mailed report. The industry group forecasts a decline this year.

“New capacity additions will be lower in 2016 than 2015 though should then rebound,” EWEA Chief Executive Officer Giles Dickson said in a statement, adding that installed offshore capacity in Europe will rise to 20 GW by 2020. “The industry is making real progress in reducing costs. But we need governments to give us a clear vision of the volumes they envisage long term and the regulatory framework they’ll apply to drive the necessary investments.”

Ten projects worth a record 13.3 billion euros ($14.5 billion) reached a final investment decision in 2015, up from 6.5 billion euros a year earlier. About 1.5 billion euros of financing came in project bonds, a first for the industry and a sign banks and investors view it as less risky than in the past, according to EWEA. Refinancing and construction expenditure brought total investment in the industry to 18 billion euros for the year.

Siemens AG was the top offshore wind turbine supplier in 2015, providing 60 percent of installations, ahead of the Adwen venture by Gamesa Corp. Tecnologica SA and Areva SA on 18 percent. Three-quarters of the grid connections were in Germany, which now has about 30 percent of the cumulative 11,027 MW of offshore capacity in European waters, compared with about 46 percent for the U.K.

©2016 Bloomberg News

Lead image: Offshore wind turbines in the North Sea. Credit: Shutterstock.

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