New Offshore Wind Investments Drop 60% in 2017

Six projects worth EUR 7.5 billion reached Final Investment Decision (FID) last year – a 60% decrease from 2016 and the first decrease in investments since 2012 – according to WindEurope, which states that the transition to auctions has resulted in a lull in FIDs and that the auctions of the last two years are expected to lead to new project FIDs in 2018.

The six projects, with a combined capacity of 2.5GW, are concentrated in two countries: the UK and Germany, with the majority of the new capacity financed (56%) in the UK, home of the largest offshore wind farm to date to reach FID, Hornsea Project Two.

Offshore wind in Europe generated a total financing activity of EUR 12.1 billion last year as, in addition to the investments in new wind farms, there were EUR 4.6 billion in refinancing transactions, an 85% increase compared to 2016. No new investments in transmission assets were announced in 2017, WindEurope states.

Since 2010, the UK has attracted 47% of new investments, worth EUR 35 billion, making it the biggest offshore wind market for capital spending commitments over the last eight years. Germany follows with 37%, generating EUR 28 billion in investments since 2010.

Projects expected to go through FID in 2018 are estimated to have a combined capacity of 3.9GW. This includes a number of projects in the UK, Denmark, the Netherlands, as well as floating offshore wind projects in Portugal and France. Financing needs could top EUR 9 billion based on disclosed transaction costs, WindEurope says in its latest offshore wind report.