Wind Energy

hOw the fInancIal crIsIs Is changIng the Market
Europe remains strong,
China is gaining
JOhn WESTWOOd
of Douglas-Westwood
about the consequences
of the financial crisis,
hope for lower steel
prices und China – the
offshore market of the
future.
Offshore magazine: how has
the financial crisis changed the
market?
John Westwood: it will cause
the most problems for projects
still several years from completion,
especially those where
owners have not made a final
investment decision. We expect
some projects to fail where the
economics are marginal.
2008 saw plenty of activity in
acquisition of projects, with
companies such as Vattenfall
moving to expand their portfolio.
We expect more movement
through 2009 as some players
look for ways out of projects
where the rate of return is below
initial expectations, and others
seek partners to share costs and
risk on large developments. This
extends to major players such as
Centrica who is expected to soon
and the potential further development of the three-MW turbine by the
company’s 1,000-strong research team.
REpower in Bremerhaven is more forthcoming: “We want to step up
production to reach 80 to 100 turbines in not more than four years,”
says Norbert Giese, head of the offshore business unit, revealing REpower’s
interim target. In the medium term, REpower is planning to
construct 120 5M and 6M turbines in 2015 and up to 200 additional
units. A team of 40 people is already working to assemble the nacelles
in Bremerhaven.
REpower receives major order from RWE
Norbert Giese is anticipating 10 offshore projects globally on average
each year over the coming years and in February he secured
for his own company one of the biggest deals the wind industry has
ever seen. RWE Innogy ordered 250 5M and 6M turbines from REpower.
The order is worth around two billion euros. The turbines will
be delivered from 2011 to 2015 and RWE is planning to use the first
150 to 180 turbines in the Innogy Nordsee 1 offshore project in Germany
(formerly Enova Offshore North Sea Windpower III). The re-
announce partners for some of its
very large UK portfolio.
There is hope that turbine prices
will fall due to the financial crisis
and the lower steel prices we
have seen. Whilst this is expected
onshore, offshore there is little
competition within the marketplace
and any reductions are
likely to be more moderate.
Which profit can an investor
expect from his offshore wind
power investments?
investors would typically look for
approximately 12 percent return.
Current projects are in the nine to
14 percent range.
Will britain be the leading market
for the years to come?
The UK is expected to lead the
market for at least the next five
to 10 years. The combination of
OffshOre #2 | The Magazine
a reasonably strong financial
incentive, and a structured
permitting system gives confidence.
germany has become an
important market, and tendering
activity on a number of large
projects is now well-advanced,
bringing activity which has been
long-expected. The new tariff is a
major driver here.
Whilst the netherlands holds
much potential, it is essential
that long-term mechanisms
and targets are brought into
place soon. Denmark has good
longer-term potential, with highquality
sites which are relatively
easy to develop. a major future
player will, however, be asia.
Projects off China for example are
progressing quickly and domestic
turbine manufacturers are preparing
offshore turbines there.
maining turbines are earmarked for British and Dutch wind farms.
The order utilises a considerable portion of REpower’s planned production
capacity. The fact that construction sites are often some distance
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