While it’s premature to expect the type of asset M&A spree that has been seen in onshore, YieldCos have definitely been contemplating the offshore sector in Europe.
A new study from Totaro & Associates identifies a total investment of $424.8 billion required to develop the first 80 GW of utility-scale offshore wind in the U.S. However, there are three critical path areas which will be essential to future growth including foundation production, port infrastructure, and domestic shipbuilding of purpose-designed installation and service vessels.
Newer offshore foundation structures involve much more in-depth engineering and design work which necessitates a higher skill-set not yet present in the U.S., even with the oil and gas sectors’ offshore experience. Given the capital intensive nature for domesticating a design without a significant order commitment, partnerships and technology transfer and licensing will be key to facilitating near term expansion in this area.
Significant quayside infrastructure exists to enable offshore wind, but approximately $637.4 million in infrastructure improvements will be necessary for ports to be capable of supporting turbine production, offshore component load-out as well as service & repair.
Installation and service vessels are in short supply and given European demand, it is unlikely that EU based vessels could be deployed in the U.S. market anyway. This should facilitate domestic shipbuilding to meet the levels of demand expected in the coming years.
Grid infrastructure as well as domestic turbine manufacturing will be other keys to success of course, but those elements are poised to fall into place with investment commitments already made in principle to these two areas.
YieldCos could also prove to be a longer term spur to offshore project expansion as they look for developmental and operational assets to include in their portfolio mix. While it’s premature to expect the type of asset M&A spree that has been seen in onshore, YieldCos have definitely been contemplating the offshore sector in Europe. Since some of the more attractive and cost competitive projects are not even online yet, acquisition will likely come down the road.
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Totaro & Associates
www.totaro-associates.com/
Filed Under: News, Offshore wind
I don’t know what to say about those offshore wind farms….. The idea is that they seem to affect the climate in an unexpected way, as shown here: http://oceansgovernclimate.com/weather-blocked-by-north-sea-offshore-wind-farms-soon/, and I guess we should annalyse better if they are a better source for energy, or maybe not. I am wondering if those engineers and scientist have led any studies regarding the impact of those wind farms on climate.