Financing offshore wind farms requires new capital sources

» By | Published 18 Apr 2012

Torben Pedersen

The continuing economic crisis has created a need for alternative sources of capital for the renewable energy sector, people attending a panel session at the EWEA 2012 Annual Event in Copenhagen heard on Wednesday. Torben Pedersen, of PensionDanmark, also said there are considerable pressures on public finances due to debt issues and on the banking sector and private investors due to the economic crisis (read an interview with Torben Pedersen in the latest Wind Directions).

As a result, Pedersen said, alternative sources of capital like pension funds may help finance large-scale investments in green infrastructure. He told the panel session — Outlook for Project Finance: The Next Three Years — that about €150 billion is needed to advance the offshore wind sector in northern Europe in the next decade.

Pedersen said new models for financing large projects and a different approach to sharing risks also need to be explored as a result of the economic crisis. He said his organisation, which last year managed assets of €16 billion, and another pension fund recently acquired a 50% interest in the 400 MW Anholt offshore wind farm for €800 million.

Located in northeastern Denmark, Anholt is expected to be completed late next year, using 111 3.6 MW wind turbines. Pedersen said the wind farm, co-owned by Dong Energy, would provide stable returns and limited risk. He added PensionDanmark intends to invest in other offshore wind farms and other renewable energy projects.

The moderator of the panel session, Michael Liebreich of Bloomberg New Energy Finance, said companies are experiencing a difficult economic climate right now. Liebreich said the total amount invested in clean energy during the first quarter of this year was the weakest amount since the depths of the financial crisis in early 2009.

Bloomberg New Energy Finance reported last week that new financial investments in clean energy were down 28% from the final quarter of 2011 to just €21bn and was 22% lower than the equivalent figure in the first quarter of last year.

How do you install a wind farm?

As turbines get bigger and bigger, and are installed at ever-greater depths at sea, the logistical challenges behind installation only get greater, attendees at another session at EWEA 2012 in Copenhagen heard this morning.

Marcus Wübbleman said that for the Fintendele wind farm in Romania turbine components are sourced from seven different countries across the globe from Germany to China. Global sourcing increases the complexities of the supply chain, Wübbleman said, adding that ocean transport within Europe takes one to three weeks, but that increases to about eight weeks for components sourced from outside the continent.

Kaj Lindvig from A2SEA predicted that “before 2020 we will see the first 10 MW turbines”. Moreover, by 2016 rotor diameters will stretch to 155 metres – bigger than four football fields and larger than the London Eye, he said. Bigger turbines at deeper locations require heavier foundations and greater widths between the foundation legs. Moreover, special vessels are required to transport foundations and turbines. But Lindvig didn’t foresee any problems in terms of building new vessels, turbines and foundations.

“Northern Europe is really going from oil to wind – in countries like the UK and Denmark there is less and less oil every year,” he said.

This afternoon the tempo at EWEA 2012 heats up as six CEOs from the wind sectors leading players debate the European Commission’s climate and energy roadmap to 2030 at a session chaired by Danish Energy Minister Martin Lidegaard. More reporting on this blog later today!

Additional reporting by Zoë Casey


Categories: EWEA