The Next Frontier in offshore wind

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ABN AMRO held its annual offshore wind seminar on 9 November in Amsterdam. Around 250 key sector players from all parts of the offshore wind value chain, originating from more than ten countries, were in attendance. In keeping with the theme of this year’s event – ‘The Next Frontier’ – the discussion focused on the innovation and optimisation potential of the offshore wind value chain, as well as expected changes to how such projects will be financed going forward.

Floating devices

Smarter software for wind turbines and more advanced systems for energy generation and transportation  were two areas in which it was concluded there were still huge opportunities to boost the efficiency of wind energy. In addition, new capabilities to store wind energy in co-located battery systems was widely acknowledged as a likely gateway to new revenue possibilities; however, this market is still in its infancy and its full potential has yet to be unlocked. One game-changer which was heavily mooted was a wide-scale move within the industry to ‘floating foundations’. In contrast to heavy steel supporting structures which must be driven into the seabed and have a maximum reach of 40 metres, floating foundations use much less steel and are suspended close to sea level, opening up water depths of up to 700-800 metres. Since close to 80% of the world’s offshore wind resource potential lies in deep waters, this unlocks a vast new potential for developers. On somewhat of a further horizon, the use of airborne devices such as balloons, kites or tethered wings, flying 300 metres and upwards to capture very high-altitude wind speeds, are also being trialled. "Together we will have to discover how to make the power supply more structurally sustainable,” said ABN AMRO CEO Kees van Dijkhuizen. 

Financing innovation

Capital is needed in order to continually develop an industry. With an abundance of debt and equity flowing into the offshore wind sector, liquidity is not a real issue for established structures and technology; European offshore wind projects are currently able to attract financing on increasingly attractive terms. 

However, as government subsidies dwindle rapidly, as a consequence of successfully-organised tenders and impressive cost reductions delivered by the sector, the revenue stream for projects is changing and a growing component of revenues will be dependent upon volatility in energy prices. New solutions will need to be implemented to deal with such volatility in order to retain high levels of liquidity for the market. Technical innovations will also be more difficult to finance until these become proven and more widely-adopted by the industry. 

“The strong pace of innovation and the search for cost efficiencies calls for a continuous dialogue between market participants to ensure bankable new projects continue to be developed,” said Maarten Delhez, Head of Project Finance at ABN AMRO. Lisa McDermott, Executive Director of Project Finance, added, “ABN AMRO aims to be a constructive financial partner in this dialogue and to help our clients be successful in this next frontier.’


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