KB107-1 Rapport Bloomberg Offshore Wind - Binnenwerk-6

Offshore Wind: Foundations for Growth
29November2011
Rabobank / Bloomberg New Energy Finance Oshore Wind: Foundations for Growth
2
Foreword
SipkoSchat&
MichaelLiebreich
Section1
Executivesummary
Section2
Support
mechanisms&
politicalrisk
2.1 EU policy 14
2.2 Role of oshore wind according
to NREAPs 15
2.3 National policy 16
Section3
Costs&
supplychain
3.1. Levelised cost of energy (LCOE) 27
3.2. Capital cost projections 28
3.3. Supply chain 29
3.4. Improved nancing terms 36
3.5. Change in project environment 37
Contents
p05
p08
p12 p24
3
Section4
Marketsize
projections
4.1. Scenarios 40
4.2. Markets 40
4.3. Forecast in context 43
Section5
Fundingrequire-
ment&potential
investors
5.1 Investment required 46
5.2 Equity investors 46
5.3 Debt providers 49
5.4 Capital structures 50
5.5 Investment volume by
investor type 52
Appendices
Appendix A:
Oshore Wind Cost Model 56
Appendix B:
Forecast methodology 58
Colofon
p39 p44
p59
p54
4
TableofFigures
Figure 1 Electricity generation from renewable sources according to NREAPs,
2010 and 2020 (TWh) 15
Figure 2 LCOE of oshore wind and selected technologies (EUR/MWh) 15
Figure 3 Classic EEG 2009 tari Germany (EUR/MWh) 19
Figure 4 Compression EEG 2012 tari Germany (EUR/MWh) 19
Figure 5: UK oshore wind project LCOE in Central Scenario, 2012-20 (EUR/MWh) 26
Figure 6 Experience curves for oshore and onshore LCOE as a function
of cumulative capacity installations 27
Figure 7 Experience curves for oshore and onshore LCOE over time (EUR/MWh) 27
Figure 8 Actual and modelled UK project costs, 2010-20 (EUR/MW) 28
Figure 9 Actual and modelled German project costs, 2010-20 (EUR/MW) 28
Figure 10 Annual oshore wind turbine installations by manufacturer, 2011-15 29
Figure 11 Expected commercial launches for oshore wind turbine models 30
Figure 12 Annual oshore wind foundation installations by type, 2010-20 32
Figure 13 Estimated cost of foundations for 3MW turbines by water depth, 2011
(EUR/unit & metres) 32
Figure 14 Estimated cost of foundations for 5MW+ turbines by water depth, 2011
(EUR/unit & metres) 32
Figure 15 Estimated number of operating TIVs by crane capacity, 2010-13 33
Figure 16 European high voltage export cable supply/demand balance by year
of cable manufacture, 2010-15 (km) 34
Figure 17 Annual European high voltage export cable installations by manufacturer,
2011-14 35
Figure 18 UK project change in LCOE due to change in capital structure
and risk prole, 2012-20 36
Figure 19 Total cost of debt for euro area onshore wind project 37
Figure 20 Project water depth and distance from shore by project status, 1991-2015 38
Figure 21 EU oshore wind installations, 2010-20 (MW) 40
Figure 22 Annual oshore wind installations by country, 2010-20,
BNEF/Rabobank Central scenario (MW) 41
Figure 23 Central scenario total oshore wind investment by country, 2012-20 46
Figure 24 Entry and exit timings for equity investors with target risk adjusted returns (%) 47
Figure 25 Project nance capital structures and loan guarantee coverage 2006-2011 51
Figure 26 Annual investment in oshore wind by year of commissioning and investor type,
2012-15 by existing commitments and 2016-2020 forecast 53
TableofTables
Table 1 Role of oshore wind in the EU according to the NREAPs 16
Table 2 Oshore wind RO remuneration to 2017 (GBP/MWh) 18
Table 3 Details of extension period 19
Table 4 SDE premium for 600MW Bard Nederland (EUR/MWh) 21
Table 5 Belgian oshore wind subsidy based on GCs (EUR/MWh) 22
Table 6 French tender taris (EUR/MWh) 23
Table 7 Notable foundation manufacturers 31
Table 8 TIV owners and operators 34
Table 9 2020 forecast scenarios 41
Table 10 Danish tender results 42
Table 11 Policy risks in North Sea countries for BNEF/Rabobank Central scenario 43
Table 12 Equity investor proles 49
Table 13 Debt investor proles 50
Table 14 Potential capital structures of oshore wind farms 51
Table 15 Project turbine prices by manufacturer and turbine, 2018 56
Table 16 Foundation costs by type, 2018 (EURm per unit) 56
Table 17 High voltage cable costs, 2018 57
Table 18 TIVs under construction with estimated delivery date 57
Foreword
Foto: Ballast Nedam
5
6
Therationaleforfuellingthefuturewithrenewableenergyhasnever
beengreater.OnlythismonththeExecutiveDirectoroftheInterna-
tionalEnergyAgencycalledfordrasticpolicymovesinenergygenera-
tion stating that the woilu is on couise foi an insecuie ineficient anu
high-carbonenergysystem.TheIEAprojectsthatdemandforenergy
willgrowbyathirdbetween2010and2035,withcoaluserisingby
65%.Theworldwillincreasinglycometorelyonasmallnumberof
MiddleEasternandNorthAfricancountries,whichareforecasttosup-
ply90%oftherequiredoutputgrowth.TheIEAconsidersthatweare
ontrackforunprecedentedclimatechangeofbetween3.5Cto6C,
dependingonwhethermorestringentpolicieswillbeintroduced.
Althoughtheirconsumptionisatamuchhighervolume,globalsubsi-
diesforfossilfuelsarestillestimatedatoversixtimesthoseforrenew-
ablyenergy.
Europehasbeenattheforefrontofthetransitiontorenewableenergy
sources.NowthemarkethasexpandedintheUSandChina,andsuc-
cesshasfollowedscale:onshorewindpower,forinstance,hasreached
gridparityinanumberofmarkets,andevenincloudyHolland,anum-
berofresearchinstitutesthismonthcalculatedphotovoltaics
arecheaperthanconventionalelectricity.
Offshorewindenergyhasabigparttoplayinthetransitiontowardsa
moresustainablefuture:withagrowthrateinnewinstalledcumula-
tivecapacityof32%targetedbetween2010and2020undertheimple-
mentationplansoftheEUs20-20-20Directive,offshorewindhasone
FOREWORD
1http://www.iea.org/press/
pressdetail.asp?PRESS_REL_
ID=426
2AmongstwhichKEMAand
ECN,http://www.kema.
com/nl/news/pressroom/
press-releases/2011/
Particuliere_zonnestroom_
in_Nederland_kan_in_2020_
verveertigvoudigen.aspx
ofthehighestrenewableenergygrowthrates.However,asayoung
technology,itisstillrelativelymoreexpensivethanmostotheralter-
nativesonaperMWhbasis.Theoffshorewindindustryrecognises
theneedtolowercosts,andtherebysubsidies,overtimetosecurea
sustainablefutureforoffshorewind.Theindustrybelievesthatwith
incieasing scale anu technology impiovements signiicant cost ieuuc-
tionsshouldbepossible,justashavebeenachievedinothertechnolo-
gies.Rabobanksubscribestothisopinion.Europeisleading:virtually
alloffshorewindfarmssofarhavebeenbuilthere.IntheNetherlands,
astronglocalindustryhasalsogrownonthebackofthetraditional
NorthSeaoilandgasexplorationanddredgingexpertise.Thiscould
becomeanevenbiggermarketinlinewiththecurrentcapacityinstal-
lationforecasts.
Rabobankiskeentoworkcloselytogetherwithallrelevantstakehold-
ers,corporates,institutionalinvestorsandgovernmentalagenciesto
createalongtermviableoffshorewindsector.
BloombergNewEnergyFinanceprovidesinsight,analysis,newsand
dataintoallcleanenergymarketsincludingoffshorewind.
Sipko Schat
Member of the Executive Board
Rabobank Group
7
ofthehighestrenewableenergygrowthrates.However,asayoung
technology,itisstillrelativelymoreexpensivethanmostotheralter-
nativesonaperMWhbasis.Theoffshorewindindustryrecognises
theneedtolowercosts,andtherebysubsidies,overtimetosecurea
sustainablefutureforoffshorewind.Theindustrybelievesthatwith
incieasing scale anu technology impiovements signiicant cost ieuuc-
tionsshouldbepossible,justashavebeenachievedinothertechnolo-
gies.Rabobanksubscribestothisopinion.Europeisleading:virtually
alloffshorewindfarmssofarhavebeenbuilthere.IntheNetherlands,
astronglocalindustryhasalsogrownonthebackofthetraditional
NorthSeaoilandgasexplorationanddredgingexpertise.Thiscould
becomeanevenbiggermarketinlinewiththecurrentcapacityinstal-
lationforecasts.
Rabobankiskeentoworkcloselytogetherwithallrelevantstakehold-
ers,corporates,institutionalinvestorsandgovernmentalagenciesto
createalongtermviableoffshorewindsector.
BloombergNewEnergyFinanceprovidesinsight,analysis,newsand
dataintoallcleanenergymarketsincludingoffshorewind.
Sipko Schat
Member of the Executive Board
Rabobank Group
Michael Liebreich
CEO Bloomberg
New Energy Finance
8
Section1
Executive summary
Foto: Ballast Nedam
9
10 SECTI ON 1 EXECUTI VE SUMMARY
17EuropeanUnion(EU)countriesplantobuild46.4GWofoffshorewindby2020.Bloomberg
NewEnergyFinanceandRabobankunderstandthatthemagnitudeofthisbuildoutplanand
thecurrenteconomicuncertaintyinEuropemeansthatthereareawiderangeofopinionsas
towhetherandhowtheindustrywillmanagetoachievethesegoals.Thisreport,launchedat
theEuropeanWindEnergyAssociationOffshoreWindConferenceinAmsterdam,November
2011,providesaroadmapfortheindustryandinvestorswhatsupplychainplayersneedto
do,howmuchcapitalwillberequired,fromwhomandatwhatratesofreturn;andwhether
thepoliticalandregulatorysituationinplaceenablestheinnovationanddynamismofprivate
enterprisetodeliverthecostreductionsandinvestmentvolumesrequiredbysociety.
InourCentralscenarioweprojectoffshorewindslevelisedcostofenergy(LCOE)willfallby
20-30%inrealtermsandthatasaresult35.5GWoffshorewindwillbebuiltby2020.This
entailsacompoundannualgrowthrate(CAGR)of22.4%in2011-20andEUR127bninvest-
ment.Ifcostreductionsinoffshorewindfollowasimilarpathtoonshorewindwitha26year
lag,itsLCOEwillbeapproximatelyEUR112/MWhby2020,EUR65/MWhby2030andless
thanEUR50/MWhby2040.Wehavebeenslightlymoreconservativeandexpectoffshorewind
coststofalltoEUR128/MWhin2020.Theperiodofgreatestcostreductionsintheonshore
experiencecostcurveoccurredin1991-96.Thiswouldtransposeto2017-22foroffshorewind
theperiodwhenweexpectahighcapacityinstallationrateduetoUKRound3projectsand
theiefoie believe signiicant cost ieuuctions coulu be seen
In all E0 countiies agieeu to the taigets which aim to uecaibonise theii
economiesandimproveenergysecurity.Onesuchgoalisfor20%ofenergyconsumptionto
comefromrenewablesourcesby2020,puttingthemsquarelyatthecoreoftheEUsenergy
andclimatestrategy.In2008renewablesaccountedforjust10%ofenergyconsumption
acrosstheEU-27,accordingtotheEuropeanCommission.InJanuary2011,theEuropean
Commission(EC)saidthattheEUshouldbeabletomeetitsrenewablestarget,provided
that membei states fully achieve theii plans anu inancing instiuments aie impioveu
0nuei the submitteu National Renewable Eneigy Action Plans NREAPs the E0 woulu have
46.4GWofoffshorewindoperatingin2020,whichwouldconstitute9.6%ofrenewable
energycapacityandmeet4.1%oftheEUsgrosselectricitygeneration.Thiswouldentail
newinstallationsof43.4GWofcapacitybetween2011andend-2020.
0ffshoie winu installations aie cuiiently uominateu by two majoi maikets the 0K anu
GermanyandthreesecondarymarketstheNetherlands,BelgiumandDenmark.Each
hastariffsystemsforoffshorewindandvaryingdegreesofpoliticalsupportbehindthe
long-termgrowthoftheindustry.Politicalsupportlevelsandreturnsavailabletoinvestors
inthemajormarketsareadequatetostrong,withslightlyhigherpoliticalriskintheUK
thanGermanyoffsetbyhigherreturns.Inothermarkets,politicalriskvariesconsiderably
fromhighinNetherlandstolowinDenmarkwherehighwillresultinlowervolumesof
construction.
0ui cost analysis is focuseu on two maikets which we expect to constitute of
installationsto2020:theUKandGermany.Costchangesarelikelytoincludestepchanges
in technology impioveu equipment supply impioveu inancing teims anu a change in
projectlocations.IntheUKweexpecttheLCOEtofall22%fromEUR165toEUR128/
MWhbetween2011and2020drivenbyadoublinginsizeoftheturbines(3.6MWto
11
7MW),themassproductionofstandardisedjacketfoundationssuitablefor45mwater
uepths anu NW tuibines anu signiicant impiovements in installation anu opeiations
andmaintenance.OnaperMWbasisweexpectcapitalcoststodrop3%from2012-20.
InGermanyweexpecttheLCOEtofall25%fromEUR179-133/MWhby2020andcapital
coststodecreaseby17%fromEUR4.3m/MWtoEUR3.5m/MW.Althoughourcalculations
indicatealowerlearningcurveforoffshorewindthanforonshorewind,itispossiblethat
costsmayreducemoreorlessquicklythanweforeseetoday.
0ui maiket size piojections to combine the ieseaich on costs taiiffs pioject
economics,supplychainavailabilityandpoliticalrisk.InourCentralscenariogovernment
supportforoffshorewindremainsstableandthereisnoreductionintarifflevels.Inthis
environmentweprojectoffshorewindinstallationstogrowatacompoundannualgrowth
rate(CAGR)of22.4%in2011-20andEUcountriestocommission35.5GWofoffshorewind
by2020,generating115.6TWhofelectricity,contributing3.2%oftheEUsgrosselectricity
demandandreaching77%oftheannouncedNREAPoffshorewindgenerationtargets.We
believetheNREAPtargetsareambitious
In oui Cential scenaiio we calculate that investment of E0R bn of capital in offshoie
windandassociatedgridconnectionsisrequiredtobuildcapacitybetween2012and2020.
ThisrangesfromEUR114bninourLowscenariotoEUR152bninourHighscenario.
Seven equity investoi types piimaiy anu seconuaiy utilities inuepenuent powei
producers,privateequity,projectdevelopers,turbinemanufacturers,andinstitutional
investors),agrowingnumberofcommercialbanksasdebtprovidersandthreetofour
public inance institutions EKF KFW Eulei Beimes anu EIB coulu invest into offshoie
windassetsthroughexistingandnewdealstructures.Theprimaryinvestorswillcontinue
to be majoi utilities howevei to allow them to take auvantage of the signiicant maiket
opportunitywithoutspendingbeyondtheirmeans,theywillneedtobringonadditional
investors.Basedonrecentinvestmenttrendsweexpecttwogroupstobeakeypartofthis:
institutionalinvestorsandsecondaryutilities,whichthoughnotprimaryinvestorsarekeen
toinvestinoffshorewindassetsinvestingEUR3.9bnandEUR14.2bneachrespectively.
FromthisanalysisweexpectLCOEtobereduced20-30%,investmentreturnstobeadequate
forinvestmentvolumestodriveinstallationsof35.5GWby2020andestablishoffshorewind
onarobustpathtofurtherindustrialisationandrollout.
Notes:
The teim investoi ietuins is useu fiequently in this iepoit 0nless otheiwise speciieu these iefei to posttax equity
returns.
All investment anu cost iguies aie quoteu in ieal teims inuexeu to to allow cost compaiisons ovei time Conveisely
analysis of investoi ietuins uses nominal inputs to allow accuiate pioit estimations
12
13
Section2
Support mechanisms
& political risk
In 2007 all EU countries agreed to the 20-20-20 targets, which
aim to decarbonise their economies and improve energy
security. One such goal is for 20% of energy consumption to
come from renewable sources by 2020, putting them squarely
at the core of the EUs energy and climate strategy. In 2008
renewables accounted for just 10% of energy consumption
across the EU-27, according to the European Commission.
14
EachEUcountryhasdevelopedaNationalRenewableEnergyActionPlan(NREAP),indica-
tinghowtheyintendtoreachtheirrenewablestarget.Offshorewindisexpectedtoreachan
installedcapacityof46.4GWcontributing4.1%ofgrosselectricitygenerationin2020.InJanu-
ary2011,theEuropeanCommission(EC)saidthattheEUshouldmeetitsrenewablestarget,
pioviueu that membei states fully achieve theii plans anu inancing instiuments aie impioveu
Offshorewindremainsanewandcomparativelycostlyformofelectricitygeneration,making
governmentsupportcriticaltoattractingtheinvestmentnecessarytomeetNREAPtargets.The
inancial anu economic ciises have testeu the commitment of many countiies to the
taigets Bowevei the iesult has been a ieneweu focus on costeficient solutions to meet the
targetsratherthanreductionsinthesecommitments.IntheNetherlandsthiscostfocushas
hadanegativeimpactonsupportforoffshorewind.InGermany,theUKandFrancethelure
ofjobcreation,themomentumoftheindustryandinGermanyscasepublicoppositionto
nuclearpowerhaveinsteadbolsteredpoliticalsupportforoffshorewind.
Thissectiongivesanoverviewofthelegislativeframeworkandunderlyinggoalswhichsup-
portthebuild-outofoffshorewindintheEUandthenexaminethepoliticalrisk,policymecha-
nisms,gridinfrastructureandreturnsinvestorscanexpectacrossthesixcountriesinwhich
88%ofoffshorewindinstallationsintheEUareexpectedtobebuiltin2011-20.
2.1 EU policy
2.1.1 EU 20-20-20
InJanuary2008theECproposedtheEnergyandClimatePackagewhichsetthelegislative
fiamewoik foi the goals These taigets speciieu that by
uieenhouse gas emissions woulu be below levels
of gioss eneigy consumption woulu come fiom ienewable eneigy souices with at
leasta10%shareofenergyusedfortransport
Piimaiy eneigy use woulu be lowei compaieu with piojecteu levels thiough impioveu
eneigy eficiency
Focusingonrenewables,inJune2009,Directive2009/28/EConthePromotionoftheUseof
EnergyfromRenewableSourcescameintoforce.Thispieceoflegislationoutlinedthebinding
renewablestargetsforeachmemberstate,togetherwithreportingrequirements.Everycoun-
trymustboostitsshareofrenewablesby5.5%on2005levels,withtheremainingincrease
calculatedonthebasisofpercapitaGDP.Itmaychooseitsownmixofrenewablesinorderto
achieveitsobjective.
Thetargetsapplytothreesectorspower,heatingandcooling,andtransport.Tomeetthe
overall20%outcometherefore,thereshouldbe20%renewableenergy,34%ofgrosselectric-
itygeneration,21.5%ofheatingandcooling,and11%oftransport.
2.1.2. National Renewable Energy Action Plans (NREAP)
Directive2009/28/ECrequiredeachmemberstatetosubmitanNREAP,indicatinghowit
intendstoachieveitsindividualtargetbytechnologyacrossthethreerelevantsectors.Inthis
way,theEuropeanCommissioncanassessthecountrysprogressagainstitsoveralltargetand
memberstatesmayadjusttheirchoiceoftechnologiesaccordingtotheircircumstances.
TheECmustapproveallrevisionstotheinitialNREAPsubmissionsby31December2011,
atwhichpointeachcountrywillcommencebi-annualreportstoupdatetheEConprogress
towardsthe2020targets.
SECTI ON 2 SUPPORT MECHANI SMS & POLI TI CAL RI SK
15
2.2 Role of oshore wind according to NREAPs

UnderthesubmittedNREAPs,theEUwouldhave46.4GWofoffshorewindoperatingin2020,
whichwouldconstitute9.6%ofrenewableenergycapacityandmeet4.1%oftheEUsgross
electricitygeneration.Thisentailsnewinstallationsof43.4GWofcapacitybetween2011and
end-2020(Table1).
Offshorewindcould,therefore,playanimportantroleinmeetingtheEUs2020renewable
energytargets.However,itisanewandrelativelycostlyformofelectricitygenerationcom-
paredwithalternatives,suchasonshorewindandbiomass.Furthermoreitslevelisedcostof
energy(LCOE)isapproximatelythreetimeshigherthanthecurrentbaseloadpowerprice(Fig-
ure2).Therefore,governmentsupportremainscriticaltoattracttheinvestmentnecessaryto
industrialisethesector,loweritscostsandimplementtheNREAPs.Thisshouldthenenablethe
signiicant cost ieuuctions which scale anu inuustiialisation can uelivei
LCOE
BNEF 2011 EU-ETS EUA Forecast
Central scenario

53.64
43.03
54.94
54.68
79.63
106.80
143.45
159.82
184.18
0 50 100 150 200 250
Electricity Prices
Natural Gas CCGT
Coal Fired
Wind - Onshore
Biomass - Incineration
Biomass - Anaerobic Digestion
PV - c-Si
Wind - Oshore
STEG - Tower & Heliostat
Figure 2: LCOE of oshore wind and selected technologies (EUR/MWh)

2020
2010
0 100 200 300 400
Other
PV
Oshore wind
Biomass
Onshore wind
Hydropower 370
357
232
150
83
31
Figure 1: Electricity generation from renewable sources according to NREAPs, 2010 and 2020 (TWh)
Source: NREAPs, Bloomberg New Energy Finance, Bloomberg Notes: Other includes geothermal and solar thermal electricity generation (STEG).Electricity prices
uses the average day ahead baseload spot prices in Germany, France and Belgium in the past year.
16
Somecountriese.g.theUKandGermanyareactivelysupportingoffshorewindwiththe
expectationthattheirupfrontinvestmenttosupportthetechnologysindustrialisationwillbe
paiu off with the economic beneit of manufactuiing jobs anu technology leaueiship Bowevei
whileweexpecttheLCOEtodecreaseoverthedecade(Section3),somecountriesmaydefer
investment in offshoie winu until costs aie signiicantly ieuuceu choosing to suppoit lowei
costrenewablealternativesuntilthen.Inearly2011,theNetherlandssetthetariffsforits
subsidyprogramme(SDE+)toolowtobeattractiveforoffshorewind,despiteanaimof5.2GW
accordingtoitstheNREAP.
2.3 National policy
OffshorewindinstallationsaredominatedbytwomajormarketstheUKandGermanyand
foursecondarymarketstheNetherlands,Belgium,FranceandDenmark.Eachhastariffsys-
temsforoffshorewindandvaryingdegreesofpoliticalsupportbehindthelong-termgrowth
oftheindustry.Politicalsupportandreturnsavailabletoinvestorsinthemajormarketsare
adequatetostrong,withslightlyhigherpoliticalriskintheUKthanGermanyoffsetbyhigher
potentialreturns.InothermarketspoliticalriskvariesconsiderablyfromhighintheNether-
landstolowinamaturemarketsuchasDenmark.
2010 2020 NREAP
Capacity 2010YE
(MW)
% of RE
capacity
% of RE
generation
% of gross
electricity
generation
NREAP capacity
2020YE (MW)
% of RE
capacity
% of RE
generation
% of gross
electricity
generation
Capacity additions
2011-20 (MW)
UK 1,340 14.7 14.6 1.3 12,990 35.2 39.0 12.1 11,650
Denmark 869 18.8 20.0 6.8 1,339 19.8 25.8 13.4 470
Netherlands 247 6.5 7.5 0.7 5,178 36.3 38.3 14.2 4,931
Belgium 195 9.7 11.3 0.7 2,000 24.2 28.5 6.0 1,805
Germany 72 0.1 0.3 0.0 10,000 9.0 14.6 5.7 9,928
France 0 0.0 0.0 0.0 6,000 10.9 11.7 3.2 6,000
Others 219 0.2 0.1 0.0 8,870 3.5 3.8 1.3 8,651
Total (EU) 2,942 1.2 1.4 0.3 46,377 9.6 12.3 4.1 43,435
Source: Bloomberg New Energy Finance, National NREAPs, Eurostat. Notes: Others refers to all other EU member states.
Table 1: Role of oshore wind in the EU according to the NREAPs
SUPPORT MECHANI SMS & POLI TI CAL RI SK SECTI ON 2
17
2.3.1 United Kingdom
Politicalsupport,politicalrisk:WeconsiderpoliticalsupportintheUKtobeadequate.The
Conservative-LiberalDemocratcoalitiongovernmenthasemphasisedadesiretobethegreen-
estgovernmenteverandthereiswidespreadpoliticalconsensusontheexistingtargets.The
inluential Committee on Climate Change CCC continues to focus on offshoie winu as pait
of its ienewables stiategy calling foi iim commitments on suppoit mechanisms thiough the
2020s.(TheCCCisanindependentbodysetupundertheClimateChangeAct2008toadvise
thegovernmentonsettingandmeetingcarbonbudgets.)
ToencouragenewcapacityinstallationstoattaintheEU20-20-20Directiveatthesametime
assupportingrenewableenergycostreductions,thegovernmentisplanningtoreformthe
electricitymarket.On12July2011theDepartmentofEnergyandClimateChange(DECC)
piesenteu to Pailiament its longawaiteu White Papei ueining the Electiicity Naiket Refoim
(EMR)anditslegislativeproposals.Thereformpackageistosecurethetransitiontoalowcar-
boneconomyinacost-effectivemanner.Itcallsforanincreaseintheexisting2020NREAPtar-
getforoffshorewindfrom13GWto18GW,butconcedesthisaimisonlyachievableiftheLCOE
foroffshoreisreducedtoGBP100/MWh.TheEMRannouncedmultipleinitiativestotacklethis
challenge,includingthecreationofanindustry-ledtaskforcetocoordinateanactionplanto
aidthiscostreduction.This18GWproposalcontradictstheadviceoftheCCC,whichnotesthat
ifrenewableenergytargetscanbemetinotherwaysthentheexistingoffshorewindambition
shouldbemoderatedtoreducethecostsofdecarbonisation.
1
Thegovernmentviewstheoff-
shorewindindustryasanopportunitytoattractinvestmentandcreatejobsinmanufacturing,
while also illing a multigigawatt ueicit in its NREAP anu futuie electiicity supply uue to an
aginginfrastructure.
TheproposedreformsalsoincludetheoverhauloftheRenewablesObligation(RO)Scheme
a gieen ceitiicate mechanism by YE anu the implementation of a feeuin taiiff with
a contiact foi uiffeience FiT CfB see taiiff stiuctuie below staiting fiom YE These
iefoims have left the inuustiy with signiicant unceitainty foi the post peiiou paiticu-
laily with iegaiu to the stiike piice foi the CfB Bowevei theie is coniuence that the suppoit
foroffshorewindisnotunderthreat.
Theimpliedscaleofinvestmentwillrequirethegovernmenttonotjustguaranteeadequate
ietuins but also invest in infiastiuctuie to suppoit the inuustiy uemonstiateu by inancial
backingofportupgradesandfundingtheGreenInvestmentBank.
Policymechanism:TheFiTCfDmechanismwouldactasatwo-waycontractinwhichrenew-
ableenergygeneratorsreceiveapremiumontopofthebaseloadelectricitypricetoreacha
technologyspeciic stiike piice Bowevei if the electiicity piice iises above the stiike piice
developersmustrepaythedifference.Thestrikeprice,paymentperiodandstructurehaveyet
tobedetermined.
Accoiuing to the pioposal piojects may opt foi the cuiient R0 scheme until YE Subse-
quently,participantswillremaineligibleforROCsfor20yearsofoperationunderagrandfa-
theringregime.UndertheBandingReview(announcedon20October2011),projectsfully
permittedbetween1April2010and31March2015willreceivetwoROCsperMWh.Projects
permittedinthe2015/16and2016/17taxyearswillreceive1.9ROCsperMWhand1.8ROCs
perMWhrespectively.ProjectsundertheROschemearealsoexemptfrompayingtheclimate
changelevy(CCL),aGBP4.7/MWhtaxonenergydeliveredtonon-domesticusersthatis
inuexeu to inlation
Somecountriese.g.theUKandGermanyareactivelysupportingoffshorewindwiththe
expectationthattheirupfrontinvestmenttosupportthetechnologysindustrialisationwillbe
paiu off with the economic beneit of manufactuiing jobs anu technology leaueiship Bowevei
whileweexpecttheLCOEtodecreaseoverthedecade(Section3),somecountriesmaydefer
investment in offshoie winu until costs aie signiicantly ieuuceu choosing to suppoit lowei
costrenewablealternativesuntilthen.Inearly2011,theNetherlandssetthetariffsforits
subsidyprogramme(SDE+)toolowtobeattractiveforoffshorewind,despiteanaimof5.2GW
accordingtoitstheNREAP.
2.3 National policy
OffshorewindinstallationsaredominatedbytwomajormarketstheUKandGermanyand
foursecondarymarketstheNetherlands,Belgium,FranceandDenmark.Eachhastariffsys-
temsforoffshorewindandvaryingdegreesofpoliticalsupportbehindthelong-termgrowth
oftheindustry.Politicalsupportandreturnsavailabletoinvestorsinthemajormarketsare
adequatetostrong,withslightlyhigherpoliticalriskintheUKthanGermanyoffsetbyhigher
potentialreturns.InothermarketspoliticalriskvariesconsiderablyfromhighintheNether-
landstolowinamaturemarketsuchasDenmark.
2010 2020 NREAP
Capacity 2010YE
(MW)
% of RE
capacity
% of RE
generation
% of gross
electricity
generation
NREAP capacity
2020YE (MW)
% of RE
capacity
% of RE
generation
% of gross
electricity
generation
Capacity additions
2011-20 (MW)
UK 1,340 14.7 14.6 1.3 12,990 35.2 39.0 12.1 11,650
Denmark 869 18.8 20.0 6.8 1,339 19.8 25.8 13.4 470
Netherlands 247 6.5 7.5 0.7 5,178 36.3 38.3 14.2 4,931
Belgium 195 9.7 11.3 0.7 2,000 24.2 28.5 6.0 1,805
Germany 72 0.1 0.3 0.0 10,000 9.0 14.6 5.7 9,928
France 0 0.0 0.0 0.0 6,000 10.9 11.7 3.2 6,000
Others 219 0.2 0.1 0.0 8,870 3.5 3.8 1.3 8,651
Total (EU) 2,942 1.2 1.4 0.3 46,377 9.6 12.3 4.1 43,435
Source: Bloomberg New Energy Finance, National NREAPs, Eurostat. Notes: Others refers to all other EU member states.
Table 1: Role of oshore wind in the EU according to the NREAPs
1CommitteeonClimateChange,:
TheRenewableEnergyReview,
May2011
www.theccc.org.uk/reports/
renewable-energy-review
18
TheFiTCfDmechanismcouldprovidealowerbutpredictableandstablerevenuestream,
offeringcertaintyandtransparencytopotentialinvestorsbyremovingthepriceriskandin
turnloweringthefuturecostofcapital.However,someindustryplayershavecriticisedthe
transitionawayfromtheROCschemeasitwasanestablished,wellunderstoodmechanismin
whichtherewaspotentialupsideinROCsales.
Grid:uiiu connections aie cuiiently iun by the 0fice of uas anu Electiicity Naikets 0fgem
undertheTransitionalSchemeaninitiativecreatedbeforetheEMRwherebydevelopers
builu anu inance theii own giiu connections Bevelopeis aie subsequently ieimbuiseu by
winnersoftheoffshoretransmissionoperatortenders,whichwillownthetransmissionassets
for20years.ThismethodofconstructinggridconnectionswillevolvefromtheTransitional
SchemeintotheEnduringScheme(alsocreatedbeforetheEMR)wherebyoffshoretransmis-
sion opeiatois will biu to uesign inance anu constiuct giiu connection fiom inception
removingtheburdensoftimeandcostfromthedeveloper.
2.3.2 Germany
Politicalsupport,politicalrisk:WeconsiderpoliticalsupportinGermanytobestrongand
risktobelow.Supportforoffshorewindhasbeenreasonablystableunderthechancellorship
ofAngelaMerkel,aformerenvironmentministerwholeadsacoalitionoftheChristianDemo-
craticUnion,ChristianSocialUnionandFreeDemocraticParty.Furthermore,supportforthe
mainopposition,theSocialDemocraticPartyanditstraditionalallies,theGreens,hasrisento
post iecoiu levels uue in pait to inighting ovei the Euiozone uebt ciisis The Reuuieen
coalitionhashistoricallysupportedoffshorewind,havingintroducedtheprioritypurchase
obligationforgridconnectionswhilstinpowerbetween1998and2002.Thisobligationfacili-
tatedaboominrenewableenergyinstallations.
TheriseoftheoppositionandtheFukushimaincidentledtoagovernmentreviewofthe
nuclearphase-outprogrammeaswellasrenewableenergypoliciesinsummer2011.This
goveinment ieveiseu a uecision to piolong the lifetimes of the nucleai leet anu
coniimeu the eneigy concept taiget piouucing of ueimanys eneigy neeus fiom
renewablesourcesby2050.Theresultsofthereviewarebeingtranslatedintolawandwill
takeeffectfrom1January2012.Inconjunction,theGermangovernmentistakingaproactive
iole in oveicoming tiansmission giiu anu inance bottlenecks ielateu to offshoie winu by
amongstothers,introducinganationalgridregulator.
Min Max
ROC x2 45 53
Electricity 30 52
CCL 4.7 4.8
Total 124.7 162.8
Source: Bloomberg
Notes: Average of monthly prices 1 Jan 2009 to present
Table 2: RO remuneration to 2017 (GBP/MWh)
19
12 years Extension Remaining
Sprinter 20/MWh
Extension
150/MWh
Initial
130/MWh
Basic 35/MWh
Electricity price
forecast
Electricity price curve
Sprinter 40/MWh
Extension
150/MWh
Initial
150/MWh
Basic 35/MWh
Electricity price
forecast
Electricity price curve
8 years Extension Remaining
Figure 3: Classic EEG 2009 tari (EUR/MWh)
Figure 4: Compression EEG 2012 tari (EUR/MWh)
Source: Bloomberg New Energy Finance. Notes: Projects are likely to choose pool electricity prices (red dotted line)
after the initial tari expires as they are forecasted to be far greater than the basic tari (EUR 35/MWh). The Bloomberg
New Energy Finance electricity price forecast assumes continuous annual increase of 1.8% on current electricity prices.
Water depth Distance to shore
For every m the project is in water greater
than 20m depth the initial tari is extended
by 1.7 months.
For every nautical mile (nm) the project is in
further than 12nm from shore the initial tari
is extended by 0.5 months.
Source: BNEF
Table 3: Details of extension period
Policymechanism:On12August2011,theGermancabinetpassedlegislationamendingthe
ErneuerbareEnergienGesetz(EEG),updatingthelawssupportingthecountrysplantoaccel-
eratetheexpansionofrenewableenergy.Offshorewinddevelopersnowmaychoosebetween
twofeed-intariffs,theclassicandcompressionmodels:
The classic mouel(Figure3)resemblesthecurrentEEG2009tariff,wherebyprojects
receiveaninitialtariffofEUR130/MWhfor12years.Projectscommissionedbefore1Janu-
ary2016arealsoeligibleforanadditionalsprinterbonusofEUR20/MWh.Thisinitiallevel
ofsupportiscontinuedthroughtheeligibleextensionperioddependingontheproject
environment(Table3).Abasictariff(EUR35/MWh)isavailablefortheremainingperiod
uptothe20thoperatingyearbutinstead,developerswilllikelychoosetoreceivethegrey
electricitypricewhichweexpectwillexceedthebasictariffduetoincreasedcostsoffossil
20
fuels By extiapolating cuiient electiicity spot piices at national inlation iates we pioject
pricestobeEUR79/MWhby2020
The compiession mouel (Figure4)isonlyavailableforprojectscommissionedbefore
1January2018.Itawardsaninitialtariff(EUR150/MWh)foreightyears,plustheeligible
extensionperiod(Table3)beforeresortingtothebasictariff.Asprinterbonusof
E0R NWh is auueu foi the iist eight yeais biinging the taiiff to E0R NWh foi the
iist eight yeais The uevelopeis will then ieceive the giey electiicity piice foi the iemain-
deroftheprojectlifetime.
The EEu amenuments also postponeu the onset yeai foi the piogiessing ueciease in the
taiiffs fiom YE to YE but the iate of ueciease will iise fiom to pei annum
Grid:TheInfrastructurePlanningAccelerationAct(2006)stipulatesthatthenationaltrans-
missionserviceoperators(TSOs)areresponsibleforthedesignandcostofconnectingGerman
offshorewindfarmsbuiltbefore31December2015tothegrid.Theassociatedcostsare
sharedamongthefourregionalTSOs.
2.3.3 Denmark
Politicalsupport,politicalrisk:WeconsiderpoliticalsupportintheDenmarktobestrong
andrisktobelow.Thegovernmenthaspreviouslyplannedfor1,339MWofoffshorewindin
itsNREAP,whichonlyrequires470MWtobebuiltthisdecade.DONGs400MWAnholtproject
(tobecommissionedin2013)willcover85%ofthis.DespiteamodestNREAPtargetcom-
paredtotheUKandGermany,in2007thegovernmentproposedplanstocommissionover
4.5GWofoffshorewindby2025.Hadthisgotbeyondtheproposalstagethiswouldhavebeen
signiicantly moie than the countiys cuiient NREAP taiget The Social Bemociatleu coalition
electedinSeptember2011,hasnotyetpushedforwardanyplansregardingoffshorewind.His-
torically,howeverithasstronglysupportedoffshorewindprojects,havingcontributedtothe
conclusionoftheAnholtandRdsand2agreements.Governmentsupportforrenewabletech-
nologyresearchanddevelopmenttotalledDKK1.0bn(EUR134m)in2010,withformerPrime
MinisterLarsLkkeRasmussenrevealing,attheopeningceremonyofHornsRev2offshore
windfarm,thegovernmentsambitiontoseeDenmarkbecomeagreengrowthlaboratory.
Furthermore,theformergovernmentwaskeentodistributerenewablepowersourcesmore
evenlyacrossthecountryinordertochargeelectricvehiclesatthe20proposedBatterySwitch
StationsandadheretotheEUsbindingtargetof10%renewableenergyinthetransportsec-
torby2020.Denmarkiscurrentlytestingelectricvehicletogridtechnologies,inthehopeof
alleviating inteimittency of offshoie winu powei impioving eneigy eficiency anu ieuucing
greenhousegasemissions.TheDanishEnergyAgencyEnergistyrelsen(ENS)hasincreasedthe
numberofpermitapplicationsbyestablishingclearerguidelinesforopen-doorsubmissions,
wherebydeveloperscanproposetheirownsite.
Policymechanism:NodirectpolicymechanismforoffshorewindexistsinDenmark.Instead,
developerscompeteforreverseauctiontenders,managedbyENS,toreceiveconstruction
permitsanda20-yearpower-purchaseagreement(PPA).However,thesePPAsarelimitedby
opeiational loau houis see Banish tenuei iesults in Table Bevelopeis may also inu theii
ownsitewithpermissionfromENS(mentionedabove)toreceiveapremiumofDKK100/
MWh(EUR13.5/MWh)for20yearsontopofthebaseloadelectricitypriceratherthananauc-
tionedPPA.Nodeveloperhasexercisedthisoptiontodate.
Grid:The national TS0 Eneiginetuk is obligeu to inance anu builu giiu connections
21
2.3.4 Netherlands
Politicalsupport,politicalrisk:WeconsiderpoliticalsupportintheNetherlandstobepoor
andrisktobehigh.AccordingtoitsNREAP,theNetherlandsaimstocommission5,178MWof
offshorewindby202049%ofitsintendedrenewableenergyinstallationsthisdecade.How-
eversincetheappointmentofanewcoalitiongovernmentcomprisingtheLiberalPartyand
theChristian-DemocratsinOctober2010,theseplanshavebeenshelved.TheCabinetledby
PrimeMinisterMarkRuttehasproposedpricecompetitionunderthePromotionofRenewable
EnergyScheme(StimuleringDuurzameEnergieproductie+orSDE+Scheme),wherebythe
subsiuies woulu be allocateu to the most costeffective technologies fiom a inite buuget of E0R
1.5bn.Thisfavoursonshorewindandbiomassoveroffshorewind.Thissituationreplicatesthe
previousabandonmentofaDutchsubsidyschemeMEPprogrammein2008whichresulted
inthecurrenthiatusinoffshorewindinstallations.
Policymechanism:TheNetherlandshaspreviouslyawardedsubsidiestorenewableenergy
technologies thiough tenueis unuei the SBE scheme SBE awaiueu the winning bius a inite
budget,fromwhichtheprojectmaydrawapremiumtosupplementthebaseloadelectricity
priceuptoabasepriceseteachyearbyECN(EnergyResearchCentreoftheNetherlands)
accordingtheLCOEofthattechnologyfor15years.Thelasttender,heldinJanuary2010,
awardedEUR5.3bntooffshorewindprojectsEUR4.4bntothe600MWBard/Typhoon/
HVCNederlandprojectandtheremainingEUR0.9bnisyettobeallocatedimplyingavery
modestroomforgrowth.Ifa42%capacityfactorisappliedtotheBardNederlandproject,it
willreceiveapremiumofEUR133/MWhover15years(Table4).Thereisthereforenocur-
rentaccesstogovernmentsubsidies,excludingthe600MWBARDNederlandproject(now
ownedbyTyphoonandHVC),whichistoreceiveEUR4.4bnundertheformerSDEscheme.
Wethereforeexpectnofurtherprojectdevelopmentsthisdecadeunlessthereisachangein
government.EvenifthepricesinthetenderweremoreattractiveforoffshorewindinanSDE+
schemebyanewgovernment,eligibleprojectsarehighlyunlikelytobecommissioneduntil
after2020duetothelongleadtimes.
Min Max
Premium 133 133
Electricity 32 60
Total 165 193
Source: BNEF
Notes: Monthly averages between 1 January 2010 and 31 December 2010, assuming a 42% capacity factor.
Table 4: SDE premium for 600MW Bard Nederland (EUR/MWh)
Grid:theTSOTenneTisresponsibleforgridconnection,buttheprojectdevelopermust
inance its uesign anu constiuction
2.3.5 Belgium
Politicalsupport,politicalrisk:WeconsiderpoliticalsupportinBelgiumtobegoodbut
thereissomeriskprimarilyrelatedtopoliticalinstability.Belgiumisaimingtocommission
2GWofoffshorewindby2020underitssubmittedNREAPtarget,aten-foldincreasefromthe
current195MW.However,theongoing2007-2011politicalimpasseinwhichnogovernment
hasformedinoverayearcouldunderminethesetargetsasthepoliticalinstabilityplaces
uncertaintyonthecommitmentsmadebypreviousgovernmentstooffshorewind.Theposi-
tionofthemainpartiesWallonianmajoritySocialistsandtheFlemishChristianDemocrats
22
towardsoffshorewindremainsunclear.Therecentresignationofthecaretakergovernment
Piime Ninistei Yves Leteime fuitheis such instability anu heightens oui peiceiveu political
risk.
Capacity EUR/MWh
Up to 216MW 107
Every extra MW 90
Electricity 49
Source: BNEF Notes: Monthly averages between 1 Jan 2009 and present
Table 5: Belgian oshore wind subsidy (EUR/MWh)
Policymechanism:OffshorewindoperatesunderafederalschememanagedbytheCommis-
siondeRgulationdelElectricitetduGaz(CREG)whichawardspermitsforconstruction
anu giiu connection 0ffshoie winu ieceives a minimum gieen ceitiicate uC piice of E0R
107/MWhforprojectsupto216MW,andEUR90/MWhforcapacityabove216MW(Table5).
ThereisnomaximumGCprice.
Grid:The pioject The pioject uevelopei is iesponsible foi inancing anu builuing its own giiu
connection,buttheBelgiantransmissionoperator,Elia,isobligedtoabsorb33%ofthecosts
uptoacapofEUR25mperproject.
2.3.6 France
Politicalsupport,politicalrisk:WeconsiderpoliticalsupportinFrancetobeadequate.
PresidentNicholasSarkozyisawarethatFrancehasthesecond-largestoffshorewindpotential
intheEUandiskeentoseethegrowthofthissector.Aboostindomesticemploymentisalsoa
signiicant uiiving foice anu the cuiient goveinment aims to cieate jobs to commission
6,000MWofoffshorewindcapacityby2020intwotenderrounds.
TheleadingoppositionSocialistpartydespiteitsformerpro-nuclearstanceisseekingto
phaseoutnuclearpowerandboostrenewableenergygenerationwithinaRed-Greenalliance
shouldtheywinthenextelectionin2012.Thisdramaticturnaroundinopinionissupportedby
allSocialistpresidentialcandidatesfollowingthe2011Fukushimanuclearincident.Renewable
energygenerationbuild-outissupportedbytherenewableenergylawGrenelle2,whichsetsa
targetof23%ofnationalenergyusefromrenewablesourcesby2020.
SECTI ON 2 SUPPORT MECHANI SMS & POLI TI CAL RI SK
23
Policymechanism:0n }uly the Fiench goveinment launcheu the iist of two uW
competitive tenueis foi offshoie winu allocating ive zones foi uevelopment The tenuei closes
on11January2012,withsubmissionstotheCommissiondeRgulationdelEnergie(CRE)
beingscoredonthreecategories:
Price Bevelopeis piopose theii piefeiieu yeai ixeupiice iemuneiation fiom the
rangesinTable6requiredtosubsidisetheprojectwithnolimitsonloadhours.
Industrialcomponent:useorcreationofadomesticsupplychain(throughjobcreation),
riskmanagementanddeveloperexperience,industrialpartnerships,abilityofaccess
capitaletc.
Existingactivitiesandtheenvironment:limitingtheenvironmentalimpactoftheproject
eg,reducingthenumberofturbinesbyusinglargermodels.
Bius with the highest oveiall scoies will be awaiueu the yeai ixeupiice PPA iequesteu
inthetenderbid.Theadventoftheindustrialandenvironmentalcomponentstothescoring
schememeansthatthetenderswillnotsimplybeawardedtothebidwiththelowestPPA.
Insteaditwillfavourbidsfromconsortiaofferinglarger5MW+turbinesandthecreationof
Frenchmanufacturingjobs.
Zone EUR/MWh
Le Treport 115-175
Fecamp 115-175
Courseulles-sur-Mer 115-175
Saint-Brieuc 140-200
Saint-Nazaire 140-200
Source: BNEF
Table 6: French tender taris (EUR/MWh)
24
25
Section3
Costs & equipment
supply
Our cost analysis is focused on two markets which we
expect to constitute 61% of installations to 2020: the UK and
Germany. Cost changes are likely to be a consequence of
step changes in technology, improved equipment supply,
improved nancing terms and a change in project locations.
In the UK we expect the LCOE to fall 22% from EUR 165 to EUR
128/MWh between 2011 and 2020 driven by a doubling in
size of the turbines (3.6MW to 7MW), the mass production of
standardised jacket foundations suitable for 45m water depths
and 5MW+ turbines, and signicant improvements in installa-
tion and operations and maintenance. On a per MW basis we
expect capital costs to drop 3% from 2012-20 from EUR 3.8m/
MW to EUR 3.7m/MW. In Germany we expect the LCOE to fall
25% from EUR 179-133/MWh by 2020 and capital costs to
decrease by 17% from EUR 4.3m/MW to EUR 3.5m/MW.
26
Thecostimprovementsbetweento2020foranyprojectcanbebrokendowninto:
Astepchangeinturbinesize,increasedscale,standardisationandexperienceacross
thevaluechain:theincreaseinstandardturbinesizesfrom3.6MWto6-7MWcould
ieuuce costs by E0R NWh This is because of gieatei eficiency anu the
neeu foi fewei moie costeficient founuations less aiiay cabling pei NW laigei pioject
capacityandresultingeconomiesofscaleincablingandtransformersaswellasimproved
installationrates.GainsmadeelsewhereinthevaluechaincouldamounttoEUR20.11/
MWhor12.2%ofcurrentcosts.Inthisstudyweappliedalearningcurvetoeachofthe
majorcomponents(seeappendix).
Improvedequipmentsupply: oui analysis inuicates signiicant investment in new capac-
ityinallmajorareasofthephysicalsupplychain.Combinedwithexpectedinstallation
ratesto2020webelieveinvestmentinthelastthreeyearshascutthedangerofsupply
bottlenecks anu iesulting cost inlation Competition oi lack of it in the supply chain
informsourequipmentcostestimates.
Improved inancing termstheintroductionofdebtcapitaltoUKprojectswillincrease
post-taxequityreturnsandlowerLCOE,buttheincreasedrisksduetoleveragingtheassets
will offset this beneit with highei equity costs in the foim of contingency iequiiements oi
highei inteinal huiule iates Leveiaging the asset coulu ieuuce inancing costs as inteiest
is tax ueuuctible anu seive to lowei the LC0E We believe futuie piojects coulu also beneit
fiom lowei cost of bank inancing as a longei tiack iecoiu anu bettei constiuction anu
opeiational management shoulu impiove the iisk pioile of offshoie winu assets We expect
thenetLCOEreductiontobeEUR6.46/MWh(3.9%).
Changeinwaterdepthanddistancefromshore:UKRound3sitesareindeeperwater
andfurtheroffshore.Despiteimprovedwindresources,thesemorechallengingsiteswill
incurcostincreasesacrossthevaluechaincausinganetincreaseintheLCOEbyEUR
8.36/MWh(5.1%).
SECTI ON 3
164.5
128.0
38.4
6.5
8.4
2012
LCOE
Experience
& large turbines
Improved
nancing
Depth &
distance
2020
LCOE
-36.5
Figure 5: UK oshore wind project LCOE in Central Scenario, 2012-20 (EUR/MWh)
Source: Bloomberg New Energy Finance Notes: Experience & large turbines includes a step change in turbine size,
increased scale, standardisation and experience across the value chain. Improved nancing will arise from the industry
mitigating construction risks to reduce debt margins and leveraging assets to make interest tax deductible. Depth &
distance represents the increase in costs across the value chain due to the more challenging locations of future sites.
COSTS & EQUI PMENT SUPPLY
>
27
3.1. Levelised cost of energy (LCOE)
TheprevioussectionexplicatesourprojectionthattheLCOEforUKoffshorewindprojects
mayfall22%fromEUR165toEUR128/MWhbetween2011and2020(Figure5).Since2009,
themigrationofprojectsfurtheroffshorewithlittlecompetitioninthesupplychainhas
increasedcapexandLCOE.Thereforeourforecastrepresentsareversalofthistrend.Thescale
ofinstallationsexpectedoverthenexteightyearsandthesizeofcontractsplacedindicatethat
theoffshorewindindustryisnowenteringaphaseofrapidindustrialisation.Ourprojected
costreductionsin2012-20translatetoalearningrateof8.8%(Figure6)meaningcostswill
reduceby8.8%foreverydoublingofinstalledcapacity.Thisislowerthanthehistoricallearn-
ingrateof13.7%foronshorewinddrivenbythemorelimitedroomforlearninginfounda-
tions,substationsandexportcables.Balanceofplantstillmakeup60%ofoffshorewindcosts
comparedto25%inonshorewind.
WhencomparingoffshoreandonshoreLCOEasfunctionsoftime,weseethatoffshorewindis
approximately26yearsbehindtheonshorewindindustry.Onshorewindexperiencedafallin
LCOEover1986-94fromEUR175/MWhtoEUR112/MWh.Ifcostreductionsinoffshorewind
followasimilarpathtoonshorewindwitha26yearlag,itsLCOEwillbeapproximatelyEUR
112/MWhby2020,EUR65/MWhby2030andlessthanEUR50/MWhby2040.Theperiodof
greatestcostreductionsintheonshoreexperiencecostcurveoccurredin1991-96.Thiswould
transposeto2017-22foroffshorewindtheperiodwhenweexpectahighcapacityinstalla-
tion iate uue to 0K Rounu piojects anu theiefoie believe signiicant cost ieuuctions coulu be
seen.Althoughourcalculationsindicatealower8.8%learningcurveforoffshorewindthan
foronshorewind,itispossiblethatcostsmayreducemoreorlessquicklythanweforesee
today.
10
1.00
1984
1990
2000
2004
2011
2009 2012 2020
Industralisation
phase
8,8%
13,7%
1.000
100 1.000 10.000 100.000 1.000.000
Onshore experience curve Onshore LCOE Oshore LCOE
10
100
150
200
50
250
1983 1987 1991 1995 1999 2003 2007 2011
2037 2033 2029 2025 2021 2017 2013 2009
Log LCOE (EUR/MWh) Log cumulative capacity (MW) Bottom x-axis (Onshore wind) Top x-axis (Oshore wind)
Onshore LCOE Oshore LCOE
Source: Bloomberg New Energy Finance Notes: Onshore wind LCOE based on BNEF Wind Experience Curves. Oshore
wind LCOE for 2011 and 2020 are EUR 165/MWh and EUR 128/MWh (Figure 5).
Figure 6: Experience curves for oshore and onshore LCOE
as a function of cumulative capacity installations
Figure 7: Experience curves for oshore and onshore LCOE
over time (EUR/MWh)
28 SECTI ON 3 COSTS & EQUI PMENT SUPPLY
3.2. Capital cost projections
DeclaredcapitalcostsforUKprojectstobecommissionedin2011currentlystandataround
GBP3.3m/MW(EUR3.8m/MW)(Figure8).WeexpectthesetoincreasetoGBP3.5m/MW
(EUR4.0m/MW)inthenextthreeyearsasprojectsarelocatedindeeperwatersandfurther
offshore.Theintroductionofturbinemodelsin2015-16willbringastepchangeincostsand,
coupledwithlearningratesinotherareasofthesupplychain,shouldbringcostsbackdownto
EUR3.7m/MWby2020(Figure8).ThestoryismoreextremeinGermanyascapexisexpected
tofallby17%in2012-20sinceitsprojectswillnotincurfurthercapexincreaseswithinstal-
lationsmigratingfurtheroffshore(Figure9).
3.0
3.8
3.6
4.0 4.0
3.9 3.8 3.8 3.7 3.7
2010 2012 2014 2016 2018 2020
4.2
4.3
4.4
4.3
3.7 3.7 3.6 3.6 3.5
2010 2012 2014 2016 2018 2020
Figure 8: Actual and modelled UK project costs, 2010-20 (EURm/MW)
Figure 9: Actual and modelled German project costs, 2010-20 (EURm/MW)
Source: Bloomberg New Energy Finance Notes: Capex for projects commissioned in 2010-15 (blue) are disclosed
capex of nanced and permitted projects in the short term demand forecast. Capex for projects commissioned
in 2016-20 (orange) represent the outputs of our Cost Model, with the expected specications for projects to be
commissioned after 2015. The project modelled for Figure 8 is the expected typical project in the UK in 2020 (nal
project in Fig 5).Grid connection and transmission costs are included in UK project costs but excluded for Ger-
many - nanced separately by the four regional TSOs.
29
3.3 Supply chain
Underlyingourprojectcostforecastsareindividualcostforecastsfordifferentelementsofthe
project.Costsdependontechnologyandthesupplyanddemandbalance.Webelievethatsup-
plyisimprovingacrossallsegmentsofthevaluechaininparticularthepotentialfor36new
turbinemodelsfrom11EU-locatedcompaniesand8companiesfromoutsidetheEUtocome
tomarketby2017.Weexpectfoundationdemandtoshiftdramaticallytowardsjacketdesigns
after2015withmultiplesuppliers,somewithextensiveoilandgasexperienceavailable.Tur-
bineinstallationvessels(TIVs)wereonceinshortsupply.However,inthelasttwoyearsthere
hasbeenextensiveinvestmentinnewvesselsbyindependentoperators,turbinemanufactur-
ersandutilities,suchthatby201350TIVsshouldbeoperatingupfrom29in2010.Thesup-
plyofhighvoltageexportcablesremainstight,sinceleadtimesoncostlynewextrusionlines
is signiicant anu thiee playeis uominate the maiket This section analyses the supplyuemanu
andcompetitivesituationforeachofthesesectionsofthesupplychain.
62%
64%
69%
41%
18%
22%
13%
16%
10%
6%
20%
11%
13%
16%
13%
6%
9%
21%
7%
5%
59%
2011 2012 2013 2014 2015
916
Market share (%) Annual installations (MW)
3,316 3,147 2,444 1,522

Non-contracted

Vestas
Areva Multibird
REpower
BARD
Siemens

Figure 10: Annual oshore wind turbine installations by manufacturer, 2011-15
Source: Bloomberg New Energy Finance Notes: Market shares are based upon conrmed contracts with projects in our
short term demand forecast (see Section 4).
3.3.1 Turbines
Wedonotexpectthesupplyofturbinestobeabottleneck.TwoturbinemanufacturersSie-
mensandVestashavedominatedtheoffshorewindmarketsinceitsinception.Weexpect
Siemens to ietain ovei maiket shaie thiough to YE Bowevei fiom this com-
petitionshouldgrow(Figure10)asanumberofmajoronshorewindturbinemanufacturers
(Alstom,Gamesa)isexpectedtostartcommercialproductionofnewturbinemodels(Figure
11)orbuildonexistingmarketshare(AREVA).Newentrantswillcompetewithexisting
playersfor1.9GWofsofarnon-contractedcapacity(59%ofexpectedinstallations)in2015.
Whilenumerousmanufacturersareaimingtopenetratethismarket,manyarelikelytofail
to make signiicant sales because of the stiingent quality iequiiements fiom uevelopeis anu
banks.Manufacturersarecurrentlyscoutingportstolocatemanufacturingfacilities,tofacili-
tatetransportationofturbineswhichwillbedoublethesizeofexistingonshoreturbines.
Forthcomingnext-generationoffshorewindturbinemodelswillfeaturelargernameplate
capacities NW uesigneu speciically foi the offshoie enviionment This shoulu geneiate
morereliabletechnologythatrequireslessmaintenance.Akeydifferentialbetweentheemerg-
ingmodelsisdrivetraintechnology:namelydirectdrive(DD)vs.mediumspeedhybrid(MSH).
Itisstilluncertainwhetheronetechnologywillprevailandproponentsofeachdesignargue
abouttheirrelativemerits.MSHrequiresnosubstantialalterationstothedesignofahigh-speed
gearbox,onlyreducingthenumberofgearsandthus,thefrequencyoffailuresinanalready
proventechnology.Bykeepingagearbox,thegeneratorcanbesubstantiallysmallerandrequire
fewerpermanentmagnetsandrare-earthelementcomponents,ofwhichfuturesuppliesfrom
Chinamaybeconstrained.ThemainadvantageofDDisthecompleteabsenceofagearbox.This
shouldeliminatethelengthydowntimeassociatedwithgearboxfailuresandreducethetop
headmassofthenacelle,allowingfortallertowersandaccesstostrongerwinds.

R&D - but not turbine specic

R&D - turbine specic
Commercial launch

2009 2010 2011 2012 2013 2014 2015 2016 2017
AMSC 10MW
Mitsubishi 6MW
Sway 10MW
Gamesa G14-X
Alstom 6MW
Vestas V164-7.0
Nordex N150
Acciona 3MW
BARD 7+X
Siemens 6MW
Gamesa G11X-5MW
Shanghai Electric 2MW
BARD 6.5
Dongfang 5MW
GE 4MW-DD
Areva Multibrid M6000
REpower 6M
Siemens SWT-3.0-DD
XEMC Darwind 5MW-DD
Dongfang 2.5MW
Goldwind 3.0MW
Goldwind 2.5MW
REpower 6M
Shanghai Electric 3.6MW
Sinovel 5MW
Vestas V112-3.0 MW
BARD 5
Sinovel 3MW
Nordex N90 2500
REpower 5M
Siemens SWT-2.3-93
Siemens SWT-3.6-107
Vestas V90-3.0MW
Winwind WWD-3
Figure 11: Expected commercial launches for oshore wind turbine models
Source: Bloomberg New Energy Finance, companies
Themovetolargerturbinemodelsshouldimproveprojecteconomics.While5MW+turbines
willbemoreexpensiveperunitthancurrentmodels,installationandmaintenancecostswill
belower:thereducednumberofunitswillloweroverallcapexperMW(fewerfoundations
andarraycables);tallertowerswillgainaccesstostrongerwinds;andimprovedproduction
eficiency will inciease eneigy conveision iates Suppliei competition shoulu put piessuie on
pricesandspurtechnologicalinnovationindesignandreliabilitywhichmanufacturersclaim
will signiicantly ieuuce the LC0E
31
Forthcomingnext-generationoffshorewindturbinemodelswillfeaturelargernameplate
capacities NW uesigneu speciically foi the offshoie enviionment This shoulu geneiate
morereliabletechnologythatrequireslessmaintenance.Akeydifferentialbetweentheemerg-
ingmodelsisdrivetraintechnology:namelydirectdrive(DD)vs.mediumspeedhybrid(MSH).
Itisstilluncertainwhetheronetechnologywillprevailandproponentsofeachdesignargue
abouttheirrelativemerits.MSHrequiresnosubstantialalterationstothedesignofahigh-speed
gearbox,onlyreducingthenumberofgearsandthus,thefrequencyoffailuresinanalready
proventechnology.Bykeepingagearbox,thegeneratorcanbesubstantiallysmallerandrequire
fewerpermanentmagnetsandrare-earthelementcomponents,ofwhichfuturesuppliesfrom
Chinamaybeconstrained.ThemainadvantageofDDisthecompleteabsenceofagearbox.This
shouldeliminatethelengthydowntimeassociatedwithgearboxfailuresandreducethetop
headmassofthenacelle,allowingfortallertowersandaccesstostrongerwinds.

R&D - but not turbine specic

R&D - turbine specic
Commercial launch

2009 2010 2011 2012 2013 2014 2015 2016 2017
AMSC 10MW
Mitsubishi 6MW
Sway 10MW
Gamesa G14-X
Alstom 6MW
Vestas V164-7.0
Nordex N150
Acciona 3MW
BARD 7+X
Siemens 6MW
Gamesa G11X-5MW
Shanghai Electric 2MW
BARD 6.5
Dongfang 5MW
GE 4MW-DD
REpower 6M
Siemens SWT-3.0-DD
XEMC Darwind 5MW-DD
Dongfang 2.5MW
Goldwind 3.0MW
Goldwind 2.5MW
REpower 6M
Shanghai Electric 3.6MW
Sinovel 5MW
Vestas V112-3.0 MW
BARD 5
Sinovel 3MW
Nordex N90 2500
REpower 5M
Siemens SWT-2.3-93
Siemens SWT-3.6-107
Vestas V90-3.0MW
Winwind WWD-3
Figure 11: Expected commercial launches for oshore wind turbine models
Source: Bloomberg New Energy Finance, companies
Themovetolargerturbinemodelsshouldimproveprojecteconomics.While5MW+turbines
willbemoreexpensiveperunitthancurrentmodels,installationandmaintenancecostswill
belower:thereducednumberofunitswillloweroverallcapexperMW(fewerfoundations
andarraycables);tallertowerswillgainaccesstostrongerwinds;andimprovedproduction
eficiency will inciease eneigy conveision iates Suppliei competition shoulu put piessuie on
pricesandspurtechnologicalinnovationindesignandreliabilitywhichmanufacturersclaim
will signiicantly ieuuce the LC0E
Thespeedofthetransitiontonewturbineswillbelimitedbyoperatingexperiencebutthis
canandisbeingpartlyoffsetbyguaranteesfromthemanufacturers.Auxiliarytechnology
requiredtosupportlargerturbinessuchasinstallationvessels(3.3.3)andfoundations(3.3.2)
is also impoitant Bowevei the offshoie winu inuustiy has maue signiicant investments to
supportthisinthelastthreeyearsandbankswillrequireguaranteesfromtheturbinemanu-
factuieis befoie inancing piojects with new tuibines
CurrentlythemarketisdominatedbyEuropeansuppliersbutUSandAsianmanufacturers
arealsopreparingformarketentry,whichwillfurtherincreasecompetitionintheshortto
mediumterm.Towinsales,newsupplierscould:
Pioviue capital fiom the manufactuiei oi powei paitnei
Acquiie an existing Euiopean manufactuiei
Invest in pioject uevelopment to showcase theii technology
Pioviue attiactive longteim suppliei waiianties
3.3.2 Foundations
BasedonourCentralscenario(seeSection4)weexpectfoundationrequirementstoincrease
toover1,000unitsperyearby2020(Figure12).Whilethemarkettodayisservedbyrelatively
fewplayers,theshortleadtimesrequiredtorampupsupplymakesundersupplylesslikely.
Suppliersaremainlyconstructionandsteelmanufacturingconglomerateswithcoastalmanu-
facturingyardsabletoservemultipleindustries.Assuch,theywillbeabletoincreasesupply
within1-2yearstomeetdemandspikes.Thereare,however,concernsthatsuppliersandcon-
tiactois aie not laige enough to absoib signiicant amounts of constiuction iisk foi contiacts
ofoverEUR100m.Thismayrequirelargerprojectstosplitfoundationcontractsbetweentwo
ormoreplayers.
Weexpectmonopilestobepartlyreplacedbyjacketstructuresbetween2015and2020asthey
aremorecosteffectivefor5MW+turbinesindeeperwaters.Monopilesarelikelytodominate
through2014asprojectsaremostlylimitedtowaterlessthan35mdeepwithturbinesless
than5MW.However,basedonknownprojectexamplesandsteelprices,weestimateifheavier
(5MW+)turbinesaredeployed,thecostofamonopilein25mofwaterincreasesfromEUR
2.7mtoEUR4.0m(Figure13andFigure14).Weestimatethecostforjacketstructureswould
gofromEUR2.7mtoEUR3.1m.Inthelongterm,weexpectlowerlearningratesandcost
reductionsthanotherpartsofthevaluechainsincetherearefewertechnologicalandprocess
improvementstobefound.Foundationcostsarehighlysensitivetosteelprices.Inthisesti-
mateweassumeEUR400/metricton.
Jacketswillinitiallysufferfromslowerinstallationtimesasmoredeckspaceisrequiredon
Column
Monopile SIF/Smulders
Bladt/EEW
Aarsle Bilnger
TAG
Jacket Burntisland
Fabrications
SIF/Smulders
Tata Steel
Tripods BARD
Tripiles Cuxhaven Steel
Source: BNEF
Table 7: Notable foundation manufacturers
installationvessels.Butthisshouldbemorethancompensatedforbylowerunitcosts.Aresur-
genceofdemandformonopilesisexpectedin2017duetoinstallationsinnewmarketswhere
shallowwatersiteshavenotyetbeendeveloped,e.g.France.
Webelieveconcrete(gravity)foundationswillstruggletogainmarketshareduetoalackof
cost-effectivedesignsfordeepwaterandamorelabour-intensivemanufacturingprocess.
FloatingturbinessuchastheSiemens/StatoilHywindprojectcapableofoperatinginwaters
400mdeeparestillintheexperimentalstage,butweexpectthemtobeusedfordeeper
watersitesandonsitepowergenerationtoisolatedoilandgasplatformsnotincludedinthis
forecast.

Tripod

Jacket
Gravity
Monopile

73%
85%
72%
95%
92%
59%
36%
43%
35%
32% 31%
25%
2%
5%
7%
4%
4%
15%
10%
5%
8%
34%
54%
46%
52%
58%
59%
2%
18%
7%
8%
6% 6% 6% 6%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
428 195 249 667 816 729 689 796 917 1,063 1,178
Market share (%) Annual installations (units)
Figure 12: Annual oshore wind foundation installations by type, 2010-20
Source: Bloomberg New Energy Finance
Figure 13: Estimated cost of foundations for 3MW
turbines by water depth, 2011 (EUR/unit & metres)
Figure 14: Estimated cost of foundations for 5MW+
turbines by water depth, 2011 (EUR/unit & metres)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
5 25 45

Tripod

Jacket
Gravity
Monopile

0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
5 25 45

Tripod

Jacket
Gravity
Monopile

33
3.3.3. Installation vessels
Byend-2010,29turbineinstallationvessels(TIV)wereavailabletoinstallturbinesand/or
foundations.Basedonouranalysisofvesselsinthepipelineweexpectafurther21vesselsto
beoperationalbyend-2013(Figure15).Allofthenewvesselswillbejack-upswithcranelift-
ingcapacitiesofover500tonnestherequiredstrengthtoinstall5MW+turbines.Twoyears
agovesselsupplywasearmarkedasapotentialbottlenecktotheindustry,butthisstrongpipe-
linedemonstratesthatinvestorshavereactedquicklytotheanticipatedundersupply.Thishas
beenfacilitatedbyareductioninleadtimesfrom36to24months.Asnext-generationturbines
becomeoperationalin2014,manyofthe18vesselswithcraneliftingcapacitiesoflessthan
tonnes will be of limiteu use in installation insteau inuing a iole in the maintenance of
existingprojects.
Thereare24vesselownersintheTIVmarket,offeringheightenedcompetitionintermsofday
ratechargesandvesseldesigns.Fromthepipelineofvessels:
All oiueis aie selfpiopelleu jackup vessels Bue to theii supeiioi speeu the majoiity of
thesewilluseconventionalshiphulls(GustoMSCdesign)ratherthanbargehulls.
vessel uesigns aie multipuipose allowing capacity to seive the oil anu gas inuustiy if
demandforturbineinstallationsweakens.
Technical speciications aie impioving as vessels must accommouate gieatei payloaus
opeiate in gieatei watei uepths anu impiove the eficiency of the installation piocess All
vesselsneedtobeabletooperateinwaterdepthsofover40m,butrecentvesselorders
havesubstantiallyraisedthislevel:Inwind(65m),Seafox(70m)andSwireBlueOcean
(75m).Craneswillbeabletoliftover500t,allowingthemtoinstall5M+turbinesanddeep
waterfoundations.
Tianspoitation capacities aie incieasing Seabieeze which RWE inauguiateu in Naich
2011,cantransportfour6MWturbinesatonetime.InFebruaryGaohplacedanorderwith
SouthKoreasSTXtobuildtheDeepwaterInstaller,aGoliathincomparison,whichwillbe
abletotransport163.6MWturbineswiththeaidofunder-deckstorageandincorporat-
ing a t ciane This shoulu signiicantly ieuuce installation anu maintenance costs in
extremeprojectlocations.
The stanuaiu uesign incluues foui jackup legs though NPI anu Swiie Blue 0cean have
optedforsix,andInwindhaschosenthree.

> 1000 tonnes

500 - 1000 tonnes
< 500 tonnes

18 18 18 18
4
9
15
19
7
8
12
13
2010 2011 2012 2013
29
50
45
35
Figure 15: Estimated number of operating TIVs by crane capacity, 2010-13
installationvessels.Butthisshouldbemorethancompensatedforbylowerunitcosts.Aresur-
genceofdemandformonopilesisexpectedin2017duetoinstallationsinnewmarketswhere
shallowwatersiteshavenotyetbeendeveloped,e.g.France.
Webelieveconcrete(gravity)foundationswillstruggletogainmarketshareduetoalackof
cost-effectivedesignsfordeepwaterandamorelabour-intensivemanufacturingprocess.
FloatingturbinessuchastheSiemens/StatoilHywindprojectcapableofoperatinginwaters
400mdeeparestillintheexperimentalstage,butweexpectthemtobeusedfordeeper
watersitesandonsitepowergenerationtoisolatedoilandgasplatformsnotincludedinthis
forecast.

Tripod

Jacket
Gravity
Monopile

73%
85%
72%
95%
92%
59%
36%
43%
35%
32% 31%
25%
2%
5%
7%
4%
4%
15%
10%
5%
8%
34%
54%
46%
52%
58%
59%
2%
18%
7%
8%
6% 6% 6% 6%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
428 195 249 667 816 729 689 796 917 1,063 1,178
Market share (%) Annual installations (units)
Figure 12: Annual oshore wind foundation installations by type, 2010-20
A2SEA GeoSea Master Marine Smit Marine Projects
Ballast Nedam Gulf Marine Services RWE Stemat
BARD Engineering Inwind Scaldis Swire Blue Ocean
Beluga Hochtief Jack-Up Barge Seacore Van OordOord
Fred Olsen Windcarrier Jumbo SeaJacks Vroon BV / MPI
GAOH KS Energy Services Seaway Heavy Lifting Workfox BV
Table 8: TIV owners and operators
3.3.4 High voltage export cables
Thesupplyofhighvoltageexportcablestotheoffshorewindindustryislikelytobethetight-
est aiea of supply we expect the noith Euiopean maiket to tighten signiicantly fiom
Over4,000kmofexportcablesarerequiredtobuildoutourshort-termdemandforecastfor
offshorewindprojectsin2011-14,withcablerequirementsincreasingeachyeartoconnect
moreprojectsincreasinglyfurtherfromshore.Aspikeindemandin2012isduetotheGerman
HVDCclustersBorWin2andDolWin1.Noothercabledemandisknownfor2012.

Demand - Oshore wind

Demand - Other
Supply
Supply - Extension

405
276
1,015
678
1,016
552
526
415
450
2010 2011 2012 2013 2014
957
1,466
1,093
1,015
802
Figure 16: European high voltage export cable supply/demand balance by year of cable manufacture,
2010-15 (km)
Source: Bloomberg New Energy Finance. Notes: Cable demand has been compiled using commissioning dates from disclosed
contracts, and delivery date estimates from our short term demand forecast. Forecast includes demand from oshore wind
projects and other known transnational HVDC contracts for cross border interconnections in north Europe.
ThreeestablishedplayersABB,PrysmianandNexanshavedominatedtheoffshorecable
market.Atcurrentcapacitythistriocanproduce800kmofhighvoltagecablesperyear,but
thismayriseto1,400kmperyearwithincrementalnewinvestmentbyinstallingnewextru-
35
sionlinesatexistingplants(representedbythedashedsupplylineinFigure16)andfurther
-to1,700kmperyear-withnewentrants.
NewentrantsincludeNKT,NSW(asubsidiaryofGeneralCable)andJDRCables,whichwill
begin commeicial piouuction fiom Bowevei theii impact alone is unlikely to be sufi-
cienttomatchtheincreasingdemand.Ifthisisnotaddressedinadvancethenpricesarelikely
to iise Bigh baiiieis to entiy incluue uevelopment of auvanceu technology anu signiicant
capitalcosts(EUR100-200m)andleadtimes(3-4years)ofanewproductionfacility.
InstallationstodatehaveusedlessexpensiveHVACcables,butfuturedemandwillmigrate
towardsHVDCtechnologyasprojectsmovefurtherfromshore.HVACcableswillmeetthe
demandoutsideofGermanyupto2015asinstallationsremaincloserthan60kmtoshore.
HVDCcableswilltakealargershareofthemarketfrom2013astransmissiontendersforthe
sixGermanoffshorewindclustersallclosedinthepastyeararecommissioned.Othermar-
kets,includingtheUKRound3andFrenchtenders,canuseHVACbutweexpectthattheytoo
willincreasinglyuseHVDCtechnologywhereitproveseconomical.HVDCtechnologyreduces
transmissionlossesovergreatdistancesbecauseitcancarryhighervoltages(500kV)than
HVAC(300kv).Manufacturersareworkingtoincreasethevoltageofcross-linkedpolyethylene
(XLPE)HVACcablestoextendtheireconomicalrangeagainstHVDCcables,potentiallyreduc-
ingcostsforfutureprojects

Non - contracted
Prysmian
NKT
ABB
Nexans

60%
22%
19%
20%
3%
18%
22%
20%
14%
11%
32%
53%
14%
6%
30%
57%
2011 2012 2013 2014
1,015 1,093 802 1,466
Market share (%) Cable demand (km)
Figure 17: Annual European high voltage export cable installations by manufacturer, 2011-14
Source: Bloomberg New Energy Finance, companies.
CurrentpricesforHVACexportcablesincludingsupplyandinstallationarearound
EUR0.4m/km,butthemajorityofcontracts,rangefromEUR0.5m/kmtoEUR0.75m/km.
Thistranslatesto6-9%oftotalcapexfora300MWproject.HVDCismoreexpensivethan
HVAC,asdemonstratedbyPrysmiansshareofitscontractswithSiemensfortheBorWin2,
HelWin1andSylWin1tendersrangingfromEUR1.0m/kmtoEUR1.4m/km.Weexpectthe
costofconnectingoffshoreprojectstothegridtoincreaseslightlyoverthenextfewyears.
A2SEA GeoSea Master Marine Smit Marine Projects
Ballast Nedam Gulf Marine Services RWE Stemat
BARD Engineering Inwind Scaldis Swire Blue Ocean
Beluga Hochtief Jack-Up Barge Seacore Van OordOord
Fred Olsen Windcarrier Jumbo SeaJacks Vroon BV / MPI
GAOH KS Energy Services Seaway Heavy Lifting Workfox BV
Table 8: TIV owners and operators
3.3.4 High voltage export cables
Thesupplyofhighvoltageexportcablestotheoffshorewindindustryislikelytobethetight-
est aiea of supply we expect the noith Euiopean maiket to tighten signiicantly fiom
Over4,000kmofexportcablesarerequiredtobuildoutourshort-termdemandforecastfor
offshorewindprojectsin2011-14,withcablerequirementsincreasingeachyeartoconnect
moreprojectsincreasinglyfurtherfromshore.Aspikeindemandin2012isduetotheGerman
HVDCclustersBorWin2andDolWin1.Noothercabledemandisknownfor2012.

Demand - Oshore wind

Demand - Other
Supply
Supply - Extension

405
276
1,015
678
1,016
552
526
415
450
2010 2011 2012 2013 2014
957
1,466
1,093
1,015
802
Figure 16: European high voltage export cable supply/demand balance by year of cable manufacture,
2010-15 (km)
Source: Bloomberg New Energy Finance. Notes: Cable demand has been compiled using commissioning dates from disclosed
contracts, and delivery date estimates from our short term demand forecast. Forecast includes demand from oshore wind
projects and other known transnational HVDC contracts for cross border interconnections in north Europe.
ThreeestablishedplayersABB,PrysmianandNexanshavedominatedtheoffshorecable
market.Atcurrentcapacitythistriocanproduce800kmofhighvoltagecablesperyear,but
thismayriseto1,400kmperyearwithincrementalnewinvestmentbyinstallingnewextru-
36
3.4 Improved nancing terms
TheintroductionofdebtcapitaltoUKprojectswillincreasepost-taxequityreturnsandlower
LC0E but the incieaseu iisks uue to leveiaging the assets will offset this beneit with highei
equitycostsintheformofcontingencyrequirementsorhigherinternalhurdlerates.Lever-
aging the asset coulu ieuuce inancing costs as inteiest is tax ueuuctible anu seive to lowei
the LC0E We believe futuie piojects coulu also beneit fiom lowei cost of bank inancing as
alongertrackrecordandbetterconstructionandoperationalmanagementshouldimprove
the iisk pioile of offshoie winu assets The NW Lincs pioject was attiacting pioject
margins225-250bpsjustbeforetheonsetoftheeurozonesovereigndebtcrisis(July2011),
butdecreasedliquidityhasincreasedcurrentpricestoabove300bps(+50bps).Whileproject
spreadshaveincreased,itisimperativetoputthemintoperspectivewiththetotalcostof
debtwhichhasactuallydecreasedastermswapshavefallensinceApril2011(Figure19).
We expect the net LC0E ieuuction uue to uiffeient inancing teims to be E0R NWh
subject to a noimalization of the inancial maikets which in tuin uepenus to a laige extent on
solvingtheeurozonesovereigndebtcrisis.
Balance sheet
LCOE 2012
Introduction of
debt capital
Improved tax
shield
Lower risk prole
of projects
Increased risk
due to leverage
Leveraged
LCOE 2020
(EUR/MWh)
126.1
119.6
9.8
3.6
2.9
9.8
-6.5
Figure 18: UK project change in LCOE due to change in capital structure and risk prole 2012-20
SECTI ON 3 COSTS & EQUI PMENT SUPPLY
37

0%
1%
2%
3%
4%
5%
6%
7%
Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11
Project Spread
Credit
Insurance
Term Swap
6M Euribor
ECB Rate
40-100bps
Oshore wind additional
project spread
Figure 19:Total cost of debt for euro area onshore wind project
Source: Bloomberg, Bloomberg New Energy Finance estimates. Notes: Oshore wind assets will typically see project
spreads 40-100bps above onshore wind projects.
3.5 Change in project environment
Speciically in the 0K pioject sites will be in ueepei watei anu fuithei offshoie This will
have speciic cost impacts on ceitain piojects accounteu foi in oui cost estimates
Bue to longei tiansfei peiious between supply poits anu sites installation costs will
inciease anu use of cleai weathei winuows will be less eficient
0peiation anu maintenance costs will iise in a similai fashion anu iequiie new woiking
methodswhichmayincludeonsiteaccommodation.
Longei lengths of high voltage cables anu upgiaues to BvBC technology to mitigate tians-
missionlosses.
Beepei wateis will iequiie laigei anu moie costly founuations This piolongs installation
timeasprolongingmoretripswillberequiredbyinstallationvesselstransportingfewer
turbines.
Despiteimprovedwindresourcesatthesesites,thenetchangetotheLCOEisanincreaseof
EUR8.4/MWh(5.1%).
38
Announced
Permitted
Financed
Commissioned
0
10
20
30
40
50
60
0 50 100
500 MW
100 MW
Water depth (m) (y-axis) Distance to shore (km) (x-axis)
Figure 20: Project water depth and distance from shore by project status, 1991-2015
Source: Bloomberg New Energy Finance Note: bubble size represents capacity of project, see key on right.
SECTI ON 3 COSTS & EQUI PMENT SUPPLY
39
Section4
Market size projections
Our market size projections to 2020 combine the research on
costs, taris, project economics, supply chain availability and
political risk. In our Central scenario government support for
oshore wind remains stable and there is no reduction in
tari levels. In this environment we project oshore wind
installations to grow at a compound annual growth rate
(CAGR) of 22.4% in 2011-20 and EU countries to commission
35.5GW of oshore wind by 2020, generating 115.6TWh of
electricity, contributing 3.2% of the EUs gross electricity
demand and reaching 77% of the announced NREAP
oshore wind generation targets.
40
4.1 Scenarios
Ourforecastsareconstructedbycombiningdistinctshort(2011-15)andlong-term(2016-20)
forecasts(seeAppendixB).Theformerisbottom-up,drivenfromtheknownprojectpipeline
anu veiiication that investoi ietuins make investment viable in each maiket The lattei is
drivenfromacalculationoftheprobabilityofeachcountryachievingitsNREAPtarget.The
probabilityisprimarilydrivenbythereturnswiththecurrentpolicy,ourassessmentofpoliti-
calsupportineachmarket(Section2.3)andtheassociatedriskofdowngradeofthetariff.
InourCentralscenariogovernmentsupportforoffshorewindremainsstableandthereisno
reductionintarifflevels.Inthisenvironmentweprojectoffshorewindinstallationstogrowat
aCAGRof22.4%2011-20andEUcountriestocommission35.5GWofoffshorewindby2020.
In oui Low scenaiio we assume that the impact of the inancial anu economic ciisis anu an
ongoingneedtoreducesovereigndebtandelectricitypriceshasanegativeimpactonpolitical
supportforoffshorewind.Policyadjustmentsbygovernmentsfavourotherrenewableenergy
technologies,resultinginuncertaintyintheoffshorewindmarketthatleadstogreaterinves-
torcaution.AsaresultmemberstatesfailtoachievetheirNREAPsby31%asonly32.2GWare
installedby2020.
InourHighscenario,politicalsupportremainsstablebutrisksdeclinemorequicklydueto
greaterinvestment,competitionandincreasedcrosscompanypartnerships.Thisresultsin
higherinvestmentlevels,enabling42.0GWofcapacityby2020.
4.2 Markets
TheBNEF/RabobankCentralscenario(Figure22)expectsastrong38%CAGRin2011-15as
Germandevelopersracetocompleteprojectsintimetoqualifyforthesprinterbonus.Around
2016themarketislikelytostabiliseat3-3.5GWperyearastheculminationofrapidGerman
growthcouldcoincidewithalullofactivityintheUKbetweentheendofRounds1and2and
SECTI ON 4
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
BNEF/Rabobank High
BNEF/Rabobank Central
BNEF/Rabobank Low
EWEA High
EWEA Mid
Figure 21: EU oshore wind installations, 2010-20 (MW)
Source: Bloomberg New Energy Finance, Rabobank, EWEA (Pure Power: Wind energy targets for 2020 and 2030,
EWEA, July 2011) Notes: BNEF/Rabobank scenarios all follow the BNEF short-term forecast until 2015.
MARKET SI ZE PROJ ECTI ONS
41
thebeginningofRound3.Growthisexpectedtosurgetowardstheendofthedecade(16.8%
CAGRin2016-20)asdevelopersinstallprojectsintheUK(Round3)andotherEuropean
nationsnamelyFranceandSweden.Annualinstallationsby2020arelikelytobeintheorder
of5-6GWcomparedwithto1GWtoday.
UnitedKingdom:WecalculatethattheROschemegivesinvestorsinRound1and2with
unleveragedprojectreturnsintheorderof10-15%thehighestreturnsintheEU.Currently,
theschemeremuneratesUKprojectsatGBP163/MWh(Table2),whiletheLCOEforcurrent
projectsaveragesatGBP141/MWh.FuturereturnswilldependontheFiTstrikeprice,which
shouldtakeintoaccountthefuturecostsituationforRound3projectsabalanceoflocation-
drivencostincreasesandexperience-andscale-drivencostdecreases.
Scenario
2020 installed
capacity (MW)
Average assumed
capacity factor (%)
2020 annual electricity
generation (TWh)
% of 2020 NREAPs
generation target
% of 2020 EU gross
electricity demand
NREAPs 46,387 37 149.8 n/a 4.13
BNEF/ Rabobank Low 32,170 35 99.5 66 2.74
BNEF/ Rabobank Central 35,506 37 115.6 77 3.19
BNEF/ Rabobank High 42,047 39 144.2 96 3.98
EWEA Mid 40,000 40 139.2 93 3.84
EWEA High 55,000 42 203.8 135 5.58
Source: BNEF, EWEA, NREAPs Notes: Percentage comparisons between scenarios are based on generation rather than capacity installations EU gross electricity
demand in 2020 is estimated to be 3,625TWh.
Table 9: 2020 forecast scenarios
0
1,000
2,000
3,000
4,000
5,000
6,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
1,087
5,642
4,809
4,100
3,641
3,030
3,316
3,147
2,444
1,522
916

Rest of EU
Netherlands
Denmark
Belgium
France
Germany
UK

Figure 22: Annual oshore wind installations by country, 2010-20, BNEF/Rabobank Central scenario (MW)
Source: Bloomberg New Energy Finance, Rabobank Notes: Other includes the following countries: Spain, Ireland, Finland,
Italy, Poland, Greece, Estonia, Sweden, Latvia, Lithuania, Malta, and Portugal.
42 MARKET SI ZE PROJ ECTI ONS
Germany:GermanprojectsaresituatedinmoreextremeenvironmentsthanUKsitesat
presentdemandinghighercapexandgivingaLCOEofEUR175-180/MWh,translatingto
areturnonequity(ROE)of7-10%.ThenewEEG2012tariffmayprovideleveragedequity
returnsof7-10%,anincreasefrompreviousreturnsof5-7%underEEG2009.Whilethese
piojects aie cuiiently less pioitable than theii 0K counteipaits uevelopeis aie gaining access
to pioject inance anu builuing out capacity pipelines that will not migiate fuithei offshoie
intodeeperwaters.Asaresultreturnsshouldimproveandthepositiveoutlookisbolsteredby
strongpoliticalsupport.
Denmark:TheLCOEofDanishprojects(currentlyaroundEUR158/MWh)isoneofthelowest
inEuropethankstosuperiorwindresourcesclosetoshorewithanestablisheddomesticsup-
plychainandstrongpoliticalsupportforwindenergy.However,PPAsunderthecurrentten-
deringscheme(EUR141/MWhforAnholt)onlyprovidesequityreturnsintheorderof5-8%
whicharesomeofthelowestinEurope,reducingtheattractivenessofthemarkettoexternal
investors.DuetothelowtargetssetbytheDanishNREAPandtheimportanceofitsdomestic
supplychain,wefeelDenmarkmayexceeditstarget.
Belgium:ThecurrentGCschemeoffersrelativelystablerevenuesandpredictablereturnsin
the oiuei of anu is theiefoie able to attiact pioject inance as uemonstiateu by the
NW CPowei anu NW Belwinu pioject inancings See Table foi subsiuy mechanism
France:BasedoncostassumptionsandcommissioningdatesforthetenderedsitestheLCOE
willbearoundEUR163/MWhin2015.Ifdevelopersarenotrequiredtofundthegridcon-
nectiontheLCOEwillbelowerEUR143/MWh.Thesevaluesfallwithintherangeofeligible
PPAs(Table6),indicatingthatreturnsof10%orhigherarepossible.However,thescheme
hasattractedawealthofinterestalready,andtheresultinghighlevelofcompetitionbetween
developmentconsortiacouldlowerthesubmittedPPAbidspotentiallylimitingequity
returnstolessthan10%.Thiseffectwillbecompoundedforbidsthatdonotcreatealocalsup-
plychain.
Project Capacity (MW) Year PPA DKK& (EUR)/MWh Limit
Horns Rev 2 209 2009 518 (69.6) 50,000 load hrs
Rodsand 2 207 2009 629 (84.5) 50,000 load hrs
Anholt 400 2013 1,051(141.1) 20,000 GWh
Source: Bloomberg New Energy Finance Notes: DKK-EUR FX rate 0.1343.
Table 10: Danish tender results
SECTI ON 4
43
4.3 Forecast in context
Ourlong-termforecastsaremoreconservativethanthoseoftheEuropeanWindEnergyAsso-
ciation(EWEA).EWEAsMidscenarioestimatestheEUwillcommission40GWofoffshore
windcapacityby202013%morecapacitythantheBNEF/RabobankCentralscenarioof
35.5GW.Intermsofgeneration,EWEAassumesthis40GWwillgenerate139.2TWh(40%
capacityfactor)20%greaterthantheBNEF/RabobankCentralscenarioof115.6TWh.The
EWEAMidscenarioforeseestheEUachieving93%ofitsNREAPgenerationtargetsandmeet-
ing3.84%ofgrossEUelectricitygeneration.
2020 LCOE
(EUR/MWh)
Current
Project
IRR
Policy
in place?
(max 2)
Project IRR
(max 4)
Political support
(max 4)
Total
(max 10)
Required
installation
2016-20 to
meet NREAP
target (MW)
Probability
of meeting
required
2016-20 rate
Resulting 2020
capacity (MW)
% of 2020
NREAP
target
UK 128 10-15% Yes (2) Good (4) Adequate (3) 9 7,313 90% 12,193 94%
Germany 133 5-10% Yes (2) Good (3) Strong (4) 9 4,928 90% 9,507 95%
Denmark 127 5-8% Yes (2) Medium (2) Strong (4) 8 70 100% 1,973 147%
Belgium 143 7-12% Yes (2) Good (4) Some risk (2) 8 956 80% 1,809 90%
France 130 5-10% Yes (2) Medium (3) Adequate (3) 8 6,000 80% 4,800 80%
Netherlands 143 N/A No (0) Poor (0) High risk (1) 1 4,172 10% 1,006 19%
Source: Bloomberg New Energy Finance Notes: BNEFBNEF/Rabobank Central 2016-20 is the capacity our Central scenario requires each country to commission in
2016-20, after the 2015 short-term forecast, to meet our expectations. The probability of meeting 2016-20 targets and 2020 targets are for the BNEF/Rabobank Cen-
tral scenario. Is there a subsidy or support mechanism (current or planned) for oshore wind? (2 = yes, 1 = planned, 0 = no). Given the expected LCOE in 2020 does
this subsidy mechanism provide adequate returns to equity investors? (4 = good returns, 3 = adequate returns, 2 = marginal returns, 1 or 0 = inadequate return) How
broad is the political consensus behind oshore wind? What is the risk that support will be downgraded? (4 = strong political support, 3 = adequate, 2 = some risk,
1 or 0 = high risk). The scores translate directly into the estimated probability of each country achieving its NREAP targets from 2016-2020. For further details see
Appendix. *Denmark is expected to exceed its NREAP target explained in Section 4.2.
Table 11: Policy risks in North Sea countries for BNEF/Rabobank Central scenario
44
45
Section5
Funding requirement &
potential investors
In our Central scenario we calculate that investment of EUR
127bn of capital in oshore wind and associated grid connec-
tions is required to build capacity between 2012 and 2020. This
ranges from EUR 114bn in our Low scenario to EUR 152bn in our
High scenario. Existing and new deal structures have opened
the market to seven types of equity investor, around twenty
commercial banks and three to four public nancing institu-
tions, such as EIB and KfW, as well as institutional investors and
smaller utilities. The primary investors have been - and will con-
tinue to be - large multinational utilities such as RWE, Centrica,
and Dong. However the capital spending constraints which
they have require them to bring on partner investors. Based on
recent investment trends we expect two groups to be a key part
of this: institutional investors and secondary utilities with esti-
mated investments of EUR 3.9bn and EUR 14.2bn respectively.
46
5.1 Investment required
TheEUR127bnrequiredincludesgridconnectioncosts,irrespectiveofwhichentity(devel-
oper,utilityorTSO)paysforthem.Thisisbasedon31.7GWbeingbuilt(2012-20)inour
Centralscenarioandcouldrangefrom28.3GWand38.2GW,whichininvestmenttermsis
EUR114-152bn.
InvestmentislikelytobeconcentratedintheUKandGermany,whichwillbothrequire
EUR39bn,followedbyFrancewithEUR19bnandthenBelgium(Figure23).Germanysinvest-
ment iguie is highei than the 0K as the majoiity of its capacity pipeline will be constiucteu
earlierinthedecadeincurringhighercapexperMWandadditionalgridtransmissioncosts
areincluded.
39.2
16.3
38.6
18.8
6.6
3.9
3.5
EURbn
Rest of EU
Netherlands
Denmark
Belgium
France
UK
Germany
Figure 23: Central scenario oshore wind investment by country 2012-20
Source: Bloomberg New Energy Finance Notes: Investment volumes include grid connection and transmission costs.
5.2. Equity investors
Currentlysevendiscreteinvestortypesareactivelyinvestingequityinoffshorewindassets
duringconstructionoroperation(sixinFigure24 These investois have speciic taiget ietuins
andriskmanagementcapabilitieswhichenablethemtoinvestintheseassets.Someofthese
investmentsalsohavedebt-likecharacteristicsintermsofriskandreturn,althoughthereare
alsothreeotherinstitutionsthatprovidedebtorloanguaranteeswhichfacilitateinvestments.
Utilities:Utilitiesrequirereturnsof8-10%,whichcurrentpolicymechanismsintheUK,
DenmarkandBelgiummaysatisfy.Therefore,weexpectutilitiestocontinuetoinvestin
offshorewindaslong-termassetsfromconceptionthroughtodecommissioning(Figure24).
Thisinvestmentmodelhasnurturedtheindustryinitsinfancy,butcontinuingtoexploit
utility balance sheets to inance the entiie offshoie winu capacity pipeline foi the whole
projectduration/windfarmlifetimeisunsustainable.Furtherequityanddebtsourcesare
thus iequiieu to inance the capacity pipeline An estimateu E0R bn has been investeu by
SECTI ON 5 FUNDI NG REQUI REMET & POTENTI AL I NVESTORS
47
utilitiesinprojectswhichhaveeitherbeencommissionedorwillbecommissionedinourshort
termforecast2011-2015.
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Announced 2 years Commissioned Financed Permitted Longterm
Private equity
Turbine manufacturers
Project
IPP
developer
Utility
Pension fund
Figure 24: Entry and exit timings for equity investors with target risk adjusted returns (%)
Projectdevelopers:Projectdevelopersownassetsfromtheirconception,andtakethem
thiough the peimitting anu constiuction piocesses To inance these piojects uevelopeis must
access pioject inance fiom commeicial anu uevelopment banks Like utilities pioject uevelop-
ersareinvestinginoffshorewindtocapitaliseontheirconstructionexpertiseandownership
ofsitepermits,butdifferinthattheydonotneedtoholdontoassetslongtermtoserveagen-
erationportfolio.Developerswillaimtoselltheirequitystakestoutilitiesorpensionfunds
onorshortlyaftertheprojectscommissioningdateatapremiumincreasingtheirreturns.
AnestimatedEUR2.9bnhasbeeninvestedbyprojectdevelopersinprojectswhichhaveeither
beencommissionedorwillbecommissionedinourshorttermforecast2011-2015.
Turbineandbalanceofplant(BOP)manufacturers::Turbinemanufacturershaveinvested
inprojectdevelopmentsitesandoperationaloffshorewindfarms.Bytakingpartownershipin
offshorewindassets,turbinemanufacturers:
Nake ietuins of slightly above theii cost of capital
Impiove the likelihoou that they will secuie equipment supply contiacts
Thelatteristhestrongestincentiveascompetitionintheturbinemarketincreaseswiththe
entranceofnewplayersandrelatedexpectedoversupply.ForexampleNordexacquired40%
ofthe300MWArcadisOst1projectdevelopmentsiteinMay2010.BOPmanufacturerssuchas
VanOord,DemeandVinciareincreasinglyinvolvedinconstructionconsortiaalongsidetur-
binemanufacturers,developersandutilitiesthatareformingtocoordinatethedevelopment
oflargersitesinthe3GWFrenchtenderandUKRound3.WhileBOPmanufacturershavenot
investedequityintoassetstodate,theaforementionedincentivesforturbinemanufacturers
maystillapplytoattractfutureinvestment.
48 FUNDI NG REQUI REMET & POTENTI AL I NVESTORS
Investmentonceequipmentcontractshavebeensecuredislesscommonasthevolumeofcapi-
tal is highei anu the ietuins lowei Bowevei the inancing aims of laigei coipoiations such as
Siemenshavemadesuchinvestments.SiemensProjectVenturesisapartownerofthreepro-
jectsunderconstructionGwyntyMor(10%),Lincs(25%),andHornsea(50%).
Thisequitysourceislimitedasonlyasmallnumberofmanufacturerspossesslargeenough
balancesheetsorappropriatelyskilledandmandatedinvestmentarms.Howeversometurbine
manufacturersareinvestigatingthepossibilityofraisingfundsfromotherinvestorswhich
theywouldthenputintowindprojects.Ifthisstrategyissuccessfulthiswillincreasethevol-
umeofdedicatedcapitalexaminingthespace.AnestimatedEUR100mhasbeeninvestedby
turbinemanufacturersinprojectswhichhaveeitherbeencommissionedorwillbecommis-
sionedinourshorttermforecast2011-2015.
Independentpowerproducers:IPPstendtofocusonpowerplantconstructionandopera-
tionwiththeintentofproducingawellbalancedyieldbearingportfoliowhichtheycanmarket
asaninvestmentproducttoinstitutionalinvestors.Themajorityarebettercapitalisedthan
projectdevelopersandarethereforeabletomaketheinvestmentrequiredtobuildaproject
andmanagetherisksassociatedwiththis.AnestimatedEUR650mhasbeeninvestedbyIPPs
inprojectswhichhaveeitherbeencommissionedorwillbecommissionedinourshortterm
forecast2011-2015.
Privateequity:0nly two offshoie winu piojects have been inanceu by a piivate equity PE
investorsofarBlackstones80%shareofthe400MWMeerwindprojectinGermanyandthe
ieinancing of Centiicas poitfolio in which Tiust Company of the West investeu We expect PE
fundstotakeminoritystakesinfutureprojectsastheyarepotentiallywillingtotakeondevel-
opmentandconstructionrisks.However,thehighreturnsdemandedbyPE(14-20%)needto
berealisedeitherthrough:
Futuie LC0E impiovements oi
Taking on uevelopment anu constiuction iisk befoie selling equity post commissioning
PEmaythereforeparticipateinoffshorewindbyactingasashort-terminvestoroverthecon-
structionphase.AnumberofmoreconservativePEhousesarelookingtopurchaseoperational
assetsaslonger-terminvestmentsdiversifyingtheirportfolioswithlowerbutstablereturns.
AnestimatedEUR210mhasbeeninvestedinprojectswhichhaveeitherbeencommissioned
orwillbecommissionedinourshorttermforecast2011-2015.
Pensionfunds/institutionalinvestors:Institutional investois speciically pension funus
aie fiequently citeu as a signiicant souice of potential capital foi the sectoi Lack of sectoi
expertiseandlowmanagementcapabilitycomparedtothevolumeofcapitalundermanage-
ment uo howevei pose signiicant baiiieis to investments Bowevei Banish stateowneu oil
andgascompanyDONGEnergyhaspioneeredthisapproach.Ithassecureda50%investment
fromPensionDanmarkintheDanishRodsand1projectin2010,a25%investmentfromDutch
investors(StichtingPensioenfondsPGGMandTriodosBank)intheUKWalney1and2projects
in2010,anda50%investment(PensionDanmarkandPensionskassernesAdministrationA/S)
in the Banish Anholt winu faim in B0Nu was iequiieu to offei signiicant guaiantees
toenticethefunds-guaranteeingthepensionfundsreturnsbyshoulderingtheentireoper-
atingrisk.IfinvestmentsbyretailcorporationsinDutchandBelgianprojectsareincluded,
EUR1.3bnhasbeeninvestedinprojectswhichhaveeitherbeencommissionedorwillbecom-
missionedinourshorttermforecast2011-2015.
SECTI ON 5
49
Sovereignwealthfunds:TypicallyabletodeployEUR100mormoreinsingleinvestments
sovereignwealthfundsarenotknowntobesystematicallyinterestedinoffshorewind.How-
evei a numbei incluuing NASBAR have signiicant focus on clean eneigy anu sustainability as
wellashighlevelpoliticalandcorporaterelationshipswhichcanfacilitateinvestments.They
typically taiget a iange of investments to suppoit a uiveisiieu poitfolio anu stable long teim
capitalmaintenancefortheparentcountry.
5.3. Debt providers
Commercialbanks:Sofar26commercialbankshaveprovideddebttooffshorewindprojects
since Some of these may be unuei piessuie as a iesult of the cuiient inancial ciisis anu
mightbecomelessactiveasaresult.However,manyofthebankswhichsufferedduringthe
2008crisishaveremainedactiveinoffshorewindandnewbankshaveenteredthemarket
closingdealsin2010and2011.EUR1.6bnhasbeeninvestedbytheseinstitutionsinproject
inancing ueals to uate with 0nicieuit B0TN Bexia KFW Ipex anu Rabobank playing leauing
rolesalongsidethemultilaterals.
Multilateralbanks:Theprimarygovernmentbackedlendingbanktooffshorewindprojects
todatehasbeentheEuropeanInvestmentBank(EIB)lendingmorethanEUR1.7bnsince
Buiing the inancial ciisis EIB was involveu in the majoi tiansactions such as Belwinu
C-Power2andBorkumWest2.HoweverthisgroupofdebtprovidersalsoincludesKreditan-
stalt fi Wieueiaubau KfW see box below which lent E0R m to the ulobal Tech anu
Meerwindprojectsin2011alone.TheUKsproposedGreenInvestmentBankwillbecome
activewithGBP3bnofequityin2012,withtheauthoritytoborrowfrom2015/16.
Exportcreditagencies(ECAs):Institutionsthatguaranteecommerciallendingtoexported
manufactuiing goous fiom speciic nations This incluues Ekspoit Kieuit Fonuen EKF
which is geaieu to suppoit Banish expoits anu is speciically ielevant foi piojects wheie LN
WindpowerorVestasisparticipating.Euler-HermesinturnisgearedtosupportingGerman
exports.BothEKFandEuler-HermesareinvolvedintheC-Power2transaction.
Investor
Target
returns Reason for investment
Example
investments
Risk
appetite
Utilities 8-10% Renewable energy generation serves to decarbonise its asset portfolio. Rodsand II Variable
Project developers 12-15% Capitalise on ownership of site permits. Sheringham Shoal High
Turbine manufacturers 10-14% Secure turbine sales/demand for turbines. Lincs Medium
Independent power producers 12-15% Focus on building and maintaining a yield bearing power generation portfolio. Variable
Private equity 14-20% Opportunistic. Meerwind High
Pension funds/ institutional investors 6-8% May acquire operational assets providing lower but predictable revenues over
a long time period. Note investment can have very similar characteristics to
commercial debt or bonds.
Anholt Very low
Sovereign wealth funds 6-12% May acquire assets providing lower but predictable revenues over a long time
period and diverse portfolio.
London Array Variable
Source: Interviews, Bloomberg New Energy Finance, Rabobank
Table 12: Equity investor proles
50
KfW Programme Oshore Windenergie
On 8 June 2011, The Federal Ministry for the Environment and the state-owned development bank KfW ocially
launched the Oshore Wind Power Programme, providing EUR 5bn of debt to 10 German oshore wind projects
on a rst come rst serve basis acting as a catalyst to entice capital from the private sector.
The loans may be provided in the following ways:
- A dlrect loan ln con[unctlon wlth a banklng syndlcate (maxlmum of LUP 400m per pro[ect)
- A dlrect loan ln con[unctlon wlth an on-lent loan from a development bank whereby the total nanclal package
may not exceed EUR 700m per project or 70% of the total capital.
- An addltlonal loan for nanclng contlngency costs (maxlmum of LUP l00m per pro[ect)
The scheme signicantly reduces the debt capital requirements from commercial banks and dramatically increases
the nancing options available to early projects by lling into a gap in commercial lending.
5.3 Capital structures
Cential to biinging multiple souices of capital to inancial close is the appiopiiate inancial
structure.Inbroadtermstheprimarystructureshaveeitherbeenon-balancesheet(all
equity inancing fiom majoi utilities oi pioject inance tiansactions with between anu
uebt Pioject inance has been useu both to funu constiuction anu to ieinance a pioject
post constiuction Since othei stiuctuies have been useu speciically to biing institu-
tionalinvestorsratherthancommercialbanksintoprojects.Similarlyutilitieshavealso
broughtpartnersinbeforeconstructionorreceivedcommitmentsbeforeconstructionthat
investmentswillbemadeaftercommissioning.
Beyondknownexpectedinvestmentsto2015wehaveforecastfutureinvestmentvolumeby
investortype,projectingfromhistoricaverageinvestmentratesandassumingsteadilyincreas-
ingrolesforsecondaryorsupportingutilitiesandinstitutionalinvestors.Thesegroupswill
investthroughthefollowingcapitalstructures:
0nbalance sheet utility funuing
Commeicial anu uevelopment bank financing thiough foi constiuction anu opeiation
Refinancing with new equity paitnei commeicial anu uevelopment bank uebt oneyeai
aftercommissioning
Refinancing with institutional capital thiee yeais aftei commissioning
Investor
Target
returns Reason for investment Example investments
Risk
appetite
Commercial banks 4-8% Typically the largest provider of debt in a given sector, driven by calculation of
risk adjusted return on capital deployed. Cost and willingness to lend can be
signicantly aected by health of wider bank market.
Thornton Bank 1 Low
Public Finance Institutions 4-7% Multinational or national government backed institutions with explicit man-
dates to support politically mandated investment goals. In Europe this includes
the EIB and Germany's KfW (see box out).
Borkum West II - Phase 1 Low
Export credit agencies n/a National government backed agencies established to support the export of
manufactured goods, equipment and services. Able to oer loan and other
guarantees, reducing the risk for other investors and increasing the strength of
equipment supplier guarantees.
C-Power I, II & III Medium
Source: Interviews, Bloomberg New Energy Finance, Rabobank
Table 13: Debt investor proles
FUNDI NG REQUI REMET & POTENTI AL I NVESTORS SECTI ON 5
51
Wewillseemanymorecombinationsandcapitalstructureshoweverthesescenarioshave
tractionandweexpecttobeusedonanongoingbasis.
Wheie commeicial bank inance is biought in uuiing oi aftei constiuction the uebt to equity
iatio vaiies pioject to pioject Buiing the inancial ciisis geaiing iatios uiu not change uiamati-
cally howevei as commitments by commeicial banks weie expecteu to fall anuoi inancing
costswereexpectedtorise,EIBsteppedin(Figure25).Wherecommercialbankshavepro-
videdthemajorityofthecapitalthishasbeenfacilitatedbytheprovisionofloanguaranteesby
Euler-HermesandEKFcoveringallorpartofthecommitments.

Commercial debt
KfW
EIB
Contingency
Equity
Loan guarantees

0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Princess
Amalia
Thornton
Bank I
Belwind Borkum
West II - Phase I
Thornton
Bank I, II & III
Global Tech
1
Meerwind
2006 2007 2009 2010 2010 2011 2011
Figure 25: Project nance capital structures and loan guarantee coverage 2006-2011
Pre-commissioning Post-commissioning Description and benets Examples
1 Investor equity/balance
sheet
Investor equity/balance sheet The investor maintains full equity
and operational ownership.
Rodsand II
2 Investor sponsorship of
project nance
Investor sponsorship of project
nance
Commercial lending brought in during
construction. Reduces actual equity
commitment by primary sponsor throughout
project lifetime.
Borkum West II
Phase I
Global Tech 1
C-Power I, II & III
sheet
Renance with debt from
commercial or development banks
& Sale of equity to 3rd party
Commercial or development bank lending
brought in post construction. Renances
the asset and allows the primary sponsor to
redeploy capital.
Baltic 1
Lynn
Inner Dowsing
Greater Gabbard
sheet
Sale of debt like tranche to
institutional investor.
Investor maintains operational control and
shoulders primary operational risks.
Rodsand I
Guneet Sands
Walney 1 and 2
Anholt
Table 14: Potential capital structures of oshore wind farms
52
5.4 Investment volume by investor type
0ui foiecast of offshoie winu installations in will iequiie E0R bn of asset inance
Wehaveforecastthepotentialsourcesofthiscapitalbycategorisingthecurrentequityown-
ersoftheoffshorewindprojectsinourshort-termforecastto2015intotheseventypesnoted
above.Thedebtportionswhethercommercialorpublicofprojectsthathaveorareattain-
ing to secuie pioject inance aie also consiueieu The estimateu tienus in equity owneiship
andgearingratiosareprojectedontoourlongterminvestmentforecast(2016-20).
Equity owneiship of piimaiy utilities uecieases fiom values of to in
Thisrepresentsashifttoamoresustainableequilibriumwherebytheindustryreliesless
ontheprimaryutilitiestofundassetsonbalancesheet.Otherequitysourcesareexpected
to inciease theii contiibutions to ill this ueicit
Equity owneiship of seconuaiy utilities incieases fiom values of to in
asmoremunicipalutilities(TrianelGmbH,StadtwerkeMuenchenGmbHetc.)andsmall
utilitiestakepartialownershipofassetswithequityinjectionsofEUR100-200m.
Equity owneiship of uevelopeis anu IPPs will iemain constant at anu iespectively
in2016-20.Developerscurrentlyown53%ofequityinprojectsforecasttobecommis-
sionedin2015astatisticskewedupwardssince68%oftheseassetsareonlypermitted,
not inanceu Bevelopeis will continue to nuituie piojects fiom theii conception befoie
sellingequitystakestootherinvestorsduringconstructionorshortlyaftercommissioning.
Equity owneiship of institutional investois incieases fiom values of to in
2020.Pension,insuranceandsovereignwealthfundsareincreasinglylookingintooffshore
windasastableandlongterminvestmentopportunity.
Equity owneiship of winu tuibine manufactuieis iemains constant at values of
thiough to with equity owneiship pioviuing the piimaiy beneit of guaianteeing
productdemand.
Equity owneiship of piivate equity iemains constant at values of thiough to
WeforeseePEactingprimarilyasashort-terminvestorovertheconstructionphase,but
thereareanumberofmoreconservativePEhouseslookingtopurchaseoperationalassets
aslonger-terminvestmentsdiversifyingtheirportfolioswithlowerbutstablereturns.
ThisCentralscenarioforecaststhattherequiredinvestmentvolume(2012-20)couldconsti-
tuteEUR27.0bnfromprimaryutilities,EUR16.8bnfromprojectdevelopers,EUR14.2bnfrom
secondaryutilities,EUR3.1bnfromindependentpowerproducers(IPP),EUR0.7bnfromtur-
binemanufacturers,EUR3.9bnfrominstitutionalinvestorsandEUR1.9bnfromprivateequity
(Figure26).
Weareforecastinggreaterownershipofoffshorewindassetsbysecondaryutilitiesandproject
uevelopeis investois with small balance sheets that will iequiie pioject inance to meet the
capitaldemandsoflargefutureprojects.Ouranalysisestimatesdebtcapitalcontributionswill
increasefrom40-60%in2016-20,whilethecontributionofcommercialbankstothisdebt
capitalwillincreasefrom45-70%in2013-20.Thereisahighvolumeofpublicbankdebtin
fiom a iush by ueimany piojects to secuie KfW inancing befoie the expiiation of
itsOffshoreWindenergieprogramme,butthiswillsubsideoncethisprogrammeends.
We shoulu expect commeicial uebt to be of giowing signiicance as piimaiy utilities seek to
ieinance theii commissioneu piojects biinging on new equity in the same tiansactions
FUNDI NG REQUI REMET & POTENTI AL I NVESTORS SECTI ON 5
53

Debt - Multilateral
Debt - Commercial
Private equity
WTG
Institutional investor

IPP
Developer
Secondary utility
Primary utility

EURbn
1.1
6.3
4.2
2.2
3.3
3.2
2.8
2.4
2.1
1.6
0.9
0.7
1.4
1.4
1.7
1.9
2.2
2.5
0.9
0.4
1.5 4.3
1.9
2.0
2.0
2.0
2.1
0.4
0.3
0.3
0.1
0.4
0.4
0.4
0.4
0.4
0.2 0.4
0.5
0.1
0.3
0.4
0.5
0.6
0.8
0.1 0.1
0.2
0.1
0.1
0.1
0.1
0.1
0.3
0.3
0.3
0.3
0.3
0.3
0.4 1.0
3.5
3.4
2.8
4.0
5.2
6.9
8.6
0.7
1.2
3.8
3.4
2.3 2.7 2.8
3.0
3.7
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014 2015 2016 2017 2018 2019 2020
5.5 20.5 18.0 16.0 14.8 12.9 15.1 15.0 10.6
Figure 26: Annual investment in oshore wind by year of commissioning and investor type 2007-15
existing commitments 2016-2020 forecast
Source: Bloomberg New Energy Finance Notes: Data in 2012-15 is based on real ownership data of projects in our short
term forecast. Data in 2016-20 is forecast using assumptions described in Section 4.
InourCentralscenariogovernmentsupportforoffshorewindremainsstableandthereis
noreductionintarifflevels.Inthisenvironmentweprojectoffshorewindslevelisedcostof
eneigy LC0E will fall by anu goveinment suppoit will pioviue suficient investment
returnsattractingcapitalfromanincreasingportfolioofequityanddebtwithdivergingrisk
appetites in innovative inancing stiuctuies These investment volumes will uiive capacity
installationsof35.5GWintheEUby2020.Althoughthisislessthanofthetargeted46.6GW,
itentailsacompoundannualgrowthrate(CAGR)of22.4%in2011-20andEUR127bninvest-
ment.Thisscenariowillestablishoffshorewindonarobustpathtofurtherindustrialisation
androlloutacrosstheEUandtheworld.Itrequirestherightpoliticalandregulatoryenviron-
menttoenabletheinnovationanddynamismofprivateenterprisetodelivertheseinvestment
volumesandsubsequentcostreductionsrequiredbysociety.
54
55
Appendices
56
0sing oui 0ffshoie Winu Cost Nouel anu sitezonespeciic physical attiibutes anu uetaileu
capitalandoperationalcostsassessments,wecalculatetheexpectedcostforoffshorewind
projectsbycountrythrough2020:
Pro|ect parameters capacity,averagewindspeed,technicalavailability,distancetoshore,
waterdepth.
Equipment turbinemodel,foundationtype,high-voltagecabletypeandlength,electrical
substations
Experiencelearning curves theexperiencecurveisanempiricaleconomiclawgovern-
ingmostmanufacturedgoods:foreverydoublingofcumulativeproductionofagivengood,
the cost of piouuction pei unit goes uown by a ixeu peicentage This is because of leaining
bydoing:themoreyoumakeofsomething,thebetteryoubecomeatit.
Economies of scale unlockinggreaterexpecteddemandmaydrivesinvestmentsinlarger
anu moie eficient factoiies
Appendix A
Oshore Wind Cost Model
AP P E NDI X A
Manufacturer Model Capacity (MW) Date online EURm per unit EURm per MW
Vestas V90 3.0 Online 3.97 1.32
Siemens SWT 107/120 3.6 Online 4.83 1.34
Areva Multibrid M5000 5.0 Online 7.47 1.49
Repower 5M 5.0 Online 7.47 1.49
BARD 5.0 5.0 Online 7.47 1.49
Alstom 6MW 6.0 2013 9.05 1.51
Siemens SWT 120 6.0 2014 9.33 1.55
Vestas V164 7.0 2014/15 10.51 1.50
Turbine Turbine 3+MW 5+MW
Depth (m) Monopile Gravity Jacket Tripod Monopile Gravity Jacket Tripod
5 1.32 1.37 1.38 1.43 2.73 2.78 1.75 2.31
10 1.43 1.48 1.49 1.54 2.84 2.89 1.86 2.42
15 1.54 1.59 1.60 1.65 2.95 3.00 1.97 2.53
20 1.65 1.70 1.72 1.76 3.06 3.11 2.09 2.64
25 1.75 1.81 1.83 1.87 - 3.22 2.20 2.75
30 1.86 1.91 1.94 1.98 - - 2.31 2.86
35 - - 2.05 2.09 - - 2.42 2.97
40 - - 2.16 2.21 - - 2.53 3.08
45 - - 2.27 2.32 - - 2.64 3.19
Source: Companies, Bloomberg New Energy Finance
Table 15: Project turbine prices by manufacturer and turbine, 2018
Table 16: Foundation costs by type, 2018 (EURm per unit)
57
TIV Year TIV Year TIV Year
Inwind Installer 2011 Beluga Hochtief 2 2012 Van Oord 1 2012
Jack Up Barge JB 116 2011 Fred Olsen Windcarrier Bold Tern 2012 Workfox Seafox 5 2012
Master Marine Nora 2011 RWE Seabreeze 2 2012 A2Sea Sea Installer 2013
RWE Seabreeze 1 2011 SeaJacks Scirocco 2012 Fred Olsen Windcarrier Brave Tern 2013
MPIAdventure 2011 SeaJacks Shamal 2012 Jack Up Barge JB 117 2013
MPIDiscovery 2011 SeaJacks Zaratan 2012 Swire Blue Ocean Pacic Osprey 2013
Beluga Hochtief 1 2012 Swire Blue Ocean Pacic Orca 2012 GAOH Deepwater Installer 2013
Source: Comnpanies, Bloomberg New Energy Finance, companies
Table 18: TIVs under construction with estimated delivery date
Type Current Voltage (kV) EURm per km
Export AC 132/150 0.55
AC 400 0.64
DC 400 1.28
DC with VSC 400 1.55
Array AC 33 0.15
Source: Companies, Bloomberg New Energy Finance Notes: Cable costs include installation.
Table 17: High voltage cable costs, 2018
58
Ourforecastsareconstructedbycombiningdistinctshort-(2011-15)andlong-term(2016-20)
forecasts.Theformerisbasedontheknownprojectpipeline.Thelatterisdrivenfromacalcu-
lationoftheprobabilityofeachcountryachievingitsNREAP.
2015 short-term forecast
Ourshort-termforecastto2015adoptsabottom-upapproach,aggregatingourexpectedcom-
missioningdatesforindividualprojects.Initialforecastsarecalculatedfromthecurrentpro-
ject status announceu fully peimitteu inanceu unuei constiuction anu the time expecteu to
achievetheremainingmilestones.Thesetimeframesvaryaccordingtotheregulatoryregime
andthetieroftheassetdeveloper/ownerafunctionofindustryexperienceandabilityto
attractcapital.Assetswithlowertierdevelopersandintheearlystagesofdevelopmentare
assignedprobabilitiesforcompletion,cuttingtheirannouncedcapacity.Ourforecastdatesalso
takeintoaccountdeveloperstimelinesandanalysisofbottlenecksinthesupplychain.
2020 long-term forecast
The2020forecastcombinesour2015forecastwithmodelledprobabilitiesofeachEUcountry
achieving its offshoie winu taigets as ueineu in the NREAPs These aie calculateu thiough
analysis of the political commitment to the technology as well as the inancial suitability anu
stabilityofthepolicymechanism.UsingourOffshoreWindCostModel(AppendixA)weesti-
matedrangesfortheLCOEofoffshorewindineachmemberstateandcombiningthiswiththe
politicalanalysiswescoredeachcountryonthefollowing:
Is theie a subsiuy oi suppoit mechanism cuiient oi planneu foi offshoie winu
(2=yes,1=planned,0=no)
uiven the expecteu LC0E in uoes this subsiuy mechanism pioviue auequate
returnstoequityinvestors?(4=goodreturns,3=adequatereturns,2=marginalreturns,
1or0=inadequatereturns)
Bow bioau is the political consensus behinu offshoie winu What is the iisk that suppoit
willbedowngraded?(4=strongpoliticalsupport,3=adequate,2=somerisk,
1or0=highrisk)
Wetranslatethescoreintoanestimateoftheprobabilitythateachcountrywillinstallthe
necessarycapacity2016-20(withoutalteringour2015forecast)requiredtomeetitsNREAP
targets.PotentialsupplychainconstraintsaretakenintoaccountthroughtheLCOEdetailedin
Section The piojecteu capacity installations aie sculpteu ovei this iveyeai peiiou accoiuing
togrowthratesinthe2015forecastanddeploymentestimates.
AP P E NDI X B
Appendix B
Forecast methodology
59
Colofon
Contact details
RabobankInternational
P.O. Box 17100
3500 HG Utrecht
The Netherlands
Website: www.rabobank.com
RenewableEnergy&InfrastructureFinance
Marc Schmitz marc.schmitz@rabobank.com +31 (0)30 71 23351
Niels de Fijter niels.de.jter@rabobank.com +31 (0)30 71 23347

Food&AgribusinessResearchandAdvisory
Clara van der Elst clara.van.der.elst@rabobank.com +31 (0)30 71 24507
Susan Hansen susan.hansen@rabobank.com +31 (0)30 71 23815
BloombergNewEnergyFinance
City Gate House
39-45 Finsbury Square
EC2A 1PQ London
United Kingdom
Website: www.bloomberg.com
William Young wyoung17@bloomberg.net +44 20 3216 4354
Fraser Johnston ohnston1@bloomberg.net +44 20 7392 0450
Michael Wilshire mwilshire1@bloomberg.net +44 20 3216 4643
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Offshore Wind: Foundations for Growth

2.2 Role of oshore wind according to NREAPs

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