Tom Harries, BNEF: Comparing Apples with Apples

Tom Harries, a wind analyst at Bloomberg New Energy Finance (BNEF) and one of the panellists at the upcoming Offshore WIND Conference, has provided an insight into matters which are at the centre stage of the offshore wind sector:

“Auctions, prices and frontier markets are the hot topics in the sector right now. We have seen the record-low price for offshore wind broken in each of the last three auctions. But there is a catch: are these prices reflective of the entire industry or just for localised cases? The problem lies in defining a typical offshore project. Compared to other renewable technologies, there are more factors at play in offshore including distance from shore, the cost of transmission and development/permitting risk.

“Our work revolves around making sense of the above and establishing ways of comparing apples with apples. For example: what is the best way to compare the price of a near-shore Danish auction with that of a far-shore, deep water project in the UK CfD auctions? And, importantly, how do investors perceive the changing risks of offshore wind and is this changing their return expectations.

“The future of offshore wind will likely lie in establishing new, frontier markets. Roll-back six months and the US offshore sector was barren. There was no steel in the water and very few routes to market for offshore developers. Today and looking forward, interest in the sector is rife. Block Island is close to producing electricity and Massachusetts has laid the gauntlet for 1.6GW by the mid-2020s. The US market offers further growth for offshore developers and the supply chain, it can increase volumes, accelerate developer experience and hopefully result in further cost reductions.

“The future of offshore wind is reliant on it bringing down costs and becoming more competitive with competing sources of electricity. Establishing new markets will empower it to do so.”

At the Offshore WIND Conference, Tom Harries will be speaking at the closing panel discussion about short and long term potential.

Harries has focused on offshore wind and specialises in policy, technology analysis and financing. He specialises in research on future cost reduction pathways for conventional offshore technology, floating technology and the impact of auctions on the sector.

The Offshore WIND Conference will take place on 24 and 25 October 2016 in Amsterdam RAI.