Offshore Wind Spending Hits Record High, Despite Covid-19

The offshore wind industry had by far its busiest half-year ever for final investment decisions in 1H 2020, surpassing the full-year figures from 2019, according to the latest report from research company BloombergNEF (BNEF).

Offshore wind financings in 1H 2020 totaled $35 billion, up 319% year-on-year and even well above 2019’s record full-year figure (a revised $31.9 billion). 

"The first half of this year saw investment decisions made on 28 sea-based wind farms, including the largest ever, the 1.5GW Vattenfall Hollandse Zuid array off the coast of the Netherlands, costing an estimated $3.9 billion," BNEF noted.

Other major offshore deals highlighted by BNEF included the 1.1GW SSE Seagreen project off the U.K., at an estimated $3.8 billion; the 600MW CIP Changfang Xidao array off Taiwan, at an estimated $3.6 billion; and the Fecamp and Saint-Brieuc projects in French waters, together totaling 993MW and $5.4 billion. 

According to BNEF, there were no fewer than 17 Chinese installations financed, led by the Guangdong Yudean Yangjiang Yangxi Shapaat 600MW and $1.8 billion.

Albert Cheung, head of analysis at BNEF, commented: “We expected to see Covid-19 affecting renewable energy investment in the first half, via delays in the financing process and to some auction programs. There are signs of that in both solar and onshore wind, but the overall global figure has proved amazingly resilient – thanks to offshore wind.”

Tom Harries, head of wind analysis, said: “Offshore wind is benefitting from the 67% reduction in levelized costs achieved since 2012, and to the performance of the latest, giant turbines. But the first half of this year also owed a lot to a rush in China to finance and build, in order to take advantage of a feed-in tariff before it expires at the end of 2021. I expect a slowdown in offshore wind investment globally in the second half, with potentially a new spike early next year.”

Related Stories