Offshore Wind Energy gets hit by European Debt Crisis

Europe has got the largest installed capacity of wind and solar energy due to the proactive policies enacted by the governments there.However the renewable energy industries have not been left unaffected by the European debt crisis. Offshore Wind Energy is a European development with most of the major offshore wind power farms located in Germany and UK. France which is tendering for 5 GW of offshore wind energy farms has seen reduced bank interest according to Areva. Offshore Wind Energy grew by more than 50% in 2010 and is expected to continue at above 50% growth rates over the next several years as the global installed offshore wind capacity multiples by more than 25 times over the next 10 years.

Banks reluctant to invest in Expensive Offshore Wind Farms

Offshore Wind Farms cost a bomb in terms of initial capital investment with around $5 million per Megawatt compared to less than $2 million for an onshore wind farm. Debt is a big component of this capex and every developer requires a consortium of banks to help with the financing.

France, which has no offshore wind power yet, proposes to install 6,000 megawat  by 2020 . Bids  for the first round of five zones with a combined capacity of 3,000 megawatts will require about 10 billion euros of investment .Areva is the biggest nuclear equipment company in the world is a part of one of the consortium bidding for this project.Note out of the 10 billion euros in investment around 8 billion euros will have to be debt.

Offshore Wind Farm Developers

Before we look at the major developers here is a very good interactive map of major global offshore wind farms from 4coffshore . Note Europe is leading  in offshore wind energy so it is not a surprise that most of the big devlopers are giant European utilities.

1. Centrica – Centrica is a British company that was formed in 1997 after the demerger from British Gas.The company has a number of energy projects which it owns and operates.Centrica is involved in the operation and building of a number of offshore wind farms like Barrow etc.
2. DONG Energy is one of the leading energy groups in Northern Europe  headquartered in Denmark.They have 1,035 MW of on- and offshore wind power in operation and 1,316 MW under construction.They are the top wind farm developers along with Vattenfall and E.ON.Dong has built the Barbo Flat,Gunfleet and Barrow offshore wind farms.They are also building the London Array and Walney Offshore Projects in the UK which will take their offshore wind portfolio to over 1 GW in the near future.
3. Airtricity – This Irish Gas and Electricity Utility has won a couple of contracts to build big offshore wind farms in Scotland in Crown Estate bidding Round 2.
4. EDF Group is one of the biggest power utilities in Europe and one of the biggest operators of nuclear power in the world.The company is also the largest producer of power in the UK which has the strongest growth plans in offshore wind energy.The company has won contracts to build offshore wind energy installations in UK
5. ScottishPower Renewables is part of Iberdrola Renovables, the world’s largest developer of renewable energy based out of Spain.They are UK’s leading developer of onshore wind, with over 30 windfarms fully operational, under construction or in planning.
6. E.ON the German powerhouse is one of the world’s largest power and gas companies.with  EUR93 billion in sales in 2010.The company is developing offshore wind farms in Germany and UK.It has a long experience in operating wind farms as well.
7. RWE is another major German utility that is developing big offshore wind farms in Europe taking advantage its expertise after oeprating a large portfolio of land based wind farms.
8. Vattenfall – It is a Swedish company and  one of Europe’s largest utilities.Vattenfall operates close to 900 wind power turbines in Sweden, Denmark, Germany, Poland, the Netherlands, Belgium and the UK. The world’s largest offshore wind farm, Thanet Wind Farm off the coast of the UK, came into operation in September 2010. In partnership with Scottish Power Renewables, Vattenfall has also been awarded one of the zones in the UK’s Round Three for the development of offshore wind power.
9. SeaEnergy PLC (formerly Ramco Energy plc) is the UK’s only quoted pure play offshore wind development company. Based in Aberdeen, Scotland.SeaEnergy PLC, through its 80% subsidiary SeaEnergy Renewables Limited, has interests in three UK offshore wind farm sites,Beatrice in a joint venture with SSE Renewables, Moray Firth with EDPR and Inch Cape. The Group has also signed a heads of terms agreement to access offshore wind farm projects in Taiwan.