Slipping quickly through the eye of the needle

Wednesday, 24 June, 2015 - 10:00
Despite the consolidation on the market, the mood was good among the nearly 400 people who attended the WAB conference at the recent Windforce. (Photo: Windforce)
Despite the consolidation on the market, the mood was good among the nearly 400 people who attended the WAB conference at the recent Windforce. (Photo: Windforce)

Reliable framework conditions for the offshore wind industry are a never-ending story. Nevertheless, projects are still being built in the North and Baltic Seas, and new investors are joining the ranks of the existing ones. Despite the consolidation on the market, the mood was good among the nearly 400 people who attended the WAB conference at the recent Windforce.

There used to be a time when the offshore wind industry attracted large crowds and newcomers were eager to get into the market, but that is over. At least for now. The political squabbles over expansion targets and the 6.5-GW expansion limit for the period up until 2020 have taken their toll on market participants.

This was also evident at the Windforce 2015, WAB's flagship conference. Compared to the times when the market was booming, the number of conference visitors has decreased by half. "Some companies are no longer on the market, others are under considerable cost pressure, and still others could not attend the conference because they have a lot of work to do at the moment. For this reason, we are very pleased with the response," said Jens Eckhoff, organiser and managing director of Offshore Wind Messe und Veranstaltungs GmbH.

When it comes to policy, the industry can still rely on support from the northern German federal states. They retained the original target of 10 GW and pumped plenty of money into port infrastructure and employee training. "If we want an energy turnaround, then we need offshore wind and continuity of expansion," Olaf Lies clarified. Currently, however, the industry is characterised above all by a lack of continuity, and this is mainly due to the fact that it is still unclear what German tendering models will look like from 2017 onwards.

Financing is getting easier

Nevertheless, obtaining financing for projects seems to be getting easier. By the end of June, the Scottish Highland Group intends to secure the final financing for the 400-MW project Veja Mate, enabling it to benefit from the favourable funding conditions. Six banks will be providing a total of € 1 billion. The Deme Group is working on similar things. The Belgians reportedly intend to acquire the 400-MW MEG 1 project from Windreich AG's bankruptcy estate and carry it out quickly.

There is no shortage of capital. "We managed to secure the financing for Nordsee One within five months and invited twenty-four banks to participate. The deal was closed with the ten financial institutions which did not try to haggle with us. If the projects are realistic, then obtaining financing is not a problem," said Gerome Guillet of Green Giraffe Energy Bankers. The project is jointly owned by Northland Power from Canada (85%) and RWE (15%). The KfW Group's 'Offshore Sofortprogramm' (funding programme for offshore projects), which contains almost € 5 billion, was not needed to secure financing for the project. "The maximum ratio of 66% for external financing was unacceptable. We obtained € 1 billion from commercial banks," Guillet said. It is also worth mentioning that E.ON will purchase every kilowatt hour after the ninth year of operation and pay a price commensurate with the market index, no questions asked.

Others are already well beyond the financing stage. Currently, the projects Nordsee Ost (RWE), Amrum Bank West (E.ON) and Baltic are 2 (EnBW) are nearly finished. Sandbank 24 (Vattenfall), Acardis Ost (KNK Wind) and Wikinger (Iberdrola) are ready to begin. And German turbine manufacturers will also get a slice of the cake. Senvion will be supplying 72 systems for Nordergründe and Nordsee One. The manufacturer Areva Wind, which has merged with Gamesa to form Adwen, will be producing 70 turbines for Wikinger. By early 2016, Adwen also intends to set up its first 8-MW prototype, which will be manufactured in Bremerhaven.

Torsten Thomas

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