ORIGINAL REPORTING: Winds Rising Offshore
'Like putting a man on the moon': How U.S. utilities can break into the offshore wind market; A new report from Fitch brings lessons from the burgeoning European sector to bear for U.S. power producers
Herman K. Trabish, May 19, 2016 (Utility Dive)
Editor’s note: This energy sector could benefit from the new administration’s proposed $1 trillion infrastructure investment if the White Hose gets over its uninformed prejudices against ocean wind.
Offshore wind is a large and growing market segment in Europe, and utilities are the biggest owner-developers. While the U.S. just commissioned its first 30 MW of ocean wind capacity last year, Europe commissioned 3,019 MW of new capacity — 100 times as much. That brings Europe's cumulative installed capacity to over 11 GW, according to the just-released annual European Wind Energy Association report. Europe also has 1.9 GW in construction. Danish public utility and power provider Dong Energy is Europe’s biggest owner-developer of offshore wind, with 15.6% of the European installations at the end of 2015. With the announcement of a new 90 MW project to be built of New York’s Long Island, it looks like a U.S. breakout for the offshore wind sector is coming.
If developers avoid revenue and technology mistakes, operational offshore wind projects can achieve investment grade (IG) ratings, according to a Fitch Ratings but getting that rating requires overcoming the harsh stresses on availability and O&M costs and meeting stricter breakeven analysis standards than for onshore wind, Fitch warned. That is one of the big reasons Europe’s offshore sector is dominated by public companies with very deep pockets. It is also why the sector offers such an important opportunity to similarly well-positioned U.S. utilities with ocean wind ambitions… click here for more