Offshore wind - an extremely risky business
It takes approximately 4 years and about £1000 per KW installed to develop a project in shallow waters (5-10m deep) in the offshore wind industry. The cost to ensure such a development depends on several factors and can account for as much as 20 per cent of the developers’ budget.
The reason behind these high numbers can be found in the complex offshore supply chain and logistics [the sheer number of logistical interfaces which make the task of the project management inherently risky], the difficulty of securing finance in the current economic situation and much more.
These risks are manageable but they need to be shared evenly between developer and contractor. However, contractors avoid discussing risk for fear of losing out on work in a competitive environment. Rather, they are keen to win work in the nascent offshore sector and develop experience and a track record that will secure in-going contracts as the industry evolves.
Felix Würtenberger, Director Commercial Steering BU Offshore Wind Projects, Vattenfall Europe Windkraft GmbH says “In the future, only those willing to take and able to manage offshore risk will be able to build profitable offshore wind farms”. Fortunately help is at hand. A B2B conference is running this June so you can seize the opportunity to meet likeminded executives involved in offshore wind risk. Check out the website for full details http://bit.ly/weurisk
Tom Evans, Managing Director of Wind Energy update [the company behind this pioneering event] says “for the last 12 months we’ve heard, read and seen the results of poorly managed risk in the offshore wind industry. Some countries are now falling behind in their path to hit EU 2020 targets for wind generation and offshore wind risk is linked as a reason why”
With representatives from Fitch Ratings, Stadtkraft, RWE, Vattenfall and Siemens all talking opening about their work on risk identification and mitigation this is the must attend B2B event of 2012. Raising capital and permitting risks, project delivery risks and supply chain risk are all on the agenda
To check out for yourself what risk is comprised of and what you can learn to help your business succeed in offshore wind go to the event website http://bit.ly/weurisk
Wind Energy Update