Douglas-Westwood (DW) has reported that it recently provided consulting for new companies looking to take advantage of the UK’s growing offshore wind sector.
In addition to oil & gas companies moving into the offshore wind supply chain, a number of start-ups are entering the offshore wind sector. Given the announcement by the UK Energy and Climate Change secretary recently, the opportunities for investors wishing to cash-in on the rapidly growing sector are significant, Douglas-Westwood said.
In November, Energy Secretary Amber Rudd announced her vision for the energy system: to put consumers first, increase competition and secure electricity generation for the UK. In addition to a proposal to end unabated coal-fired power stations and prioritise gas-fired power stations, the Energy Secretary disclosed a commitment to offshore wind whereby the government will support the target of 10GW of capacity by 2020, if costs reduction conditions are met. According to Rudd, the cost of contracts for OW have reduced by 20% over the last two years, but costs need to reduce further to secure government support. If the government’s conditions are met, there will be funding for three auctions by the end of 2016.
Douglas-Westwood said this is good news for companies involved in the offshore wind supply chain who have already seen the benefits of increased activity in the sector in recent years. Offshore wind projects have been delivered on schedule and on budget: 3.7GW of capacity has been installed over the past five years, whilst costs have been reduced, resulting in a 38% reduction in government subsidy, the company pointed out.
Given the current downturn in oil & gas activity, many companies are looking to diversify into the offshore wind sector. Halfan Brustad , VP of Statoil recently noted that offshore wind can learn from the oil & gas industry, and vice versa: “Project management for OW farms can be learnt from O&G as well as marine & logistics.”
“Renewables has a strong commercial mind set to specifications and materials choice which is key to keep low margins – we could take this back to oil and gas [during this period of cost-cutting].”