The offshore wind sector remains positive about the medium- and long-term prospects for the industry despite current challenges, delegates at the Aurora Spring Forum have heard.
Industry leaders speaking at the London event (left-right Duncan Clark, Frederik Doyé, Giorgia Carchitto, Jean Vercoutter and moderator Jesse Hettema of Aurora) said that recent events in the sector, including Orsted pausing its Hornsea 4 scheme in the UK and the failure of the latest Danish offshore wind tender are “not what we want to see”, but maintained that the overall fundamentals of the sector are strong.
Head of development in Europe at Orsted, Duncan Clark, said that “there is still a lot to be positive about” because offshore wind “is fundamentally still a great product” as it is “scalable, and delivers energy independence and security”.
Speaking during a panel session on offshore wind, Clark added: “When we bring the industry together, as developers, suppliers, investors, regulators and customers, we see a real will to work together and design (the market) better.
“We are seeing some progress in working out how to tackle these headwinds, so there is reason for optimism.”
Siemens Energy SVP Frederik Doyé said that there remains a strong case for the growth of offshore wind because of the increased awareness of energy security. “Offshore wind can play a large role in that,” he said.
Jean Vercoutter, director of power and renewables at MUFG bank added that the debt market remains “very positive” about offshore wind.
“There is lots of liquidity and banks are keen to lend,” he noted, adding that the financial markets are “acutely aware of the risks” around the sector.
“That hasn’t dampened banks’ sentiment.”
Equity “is less rosy”, however, Clark said. “That’s where the current challenge is.”
Existing barriers “are still very present” and include supply chain issues, profitability, logistical challenges, and interest rates, he added, and called for better allocation of risks across the value chain as well as a “sensible framework” that gives investors and suppliers more visibility and stability, and the confidence to invest.
“We want to avoid the peaks and troughs that occur in the market,” he said.
Giorgia Carchitto, senior vice president at BP, said governments and industry actors from the equity side, finance and offtake side need to continue to cooperate and “bring along demand” to make sure there is a sustainable market for offshore wind energy.