The European offshore wind industry - key trends and statistics 1st half 2015
A reportThe by European the European offshore wind Wind industry Energy- key trends Association and statistics 1st -half July 2015 2015 1 Contents
Mid-year European offshore wind energy statistics...... 2
Summary of offshore work carried out during the first half of 2015...... 2
Developers...... 3
Wind turbines...... 5
Financing highlights and developments in 1st half 2015 and outlook...... 6
Data collection and data analysis: Author: Andrew Ho (European Wind Energy Association, EWEA) – Industry highlights Ariola Mbistrova (EWEA) - Financing highlights Editor: Iván Pineda (EWEA) Review: Kristian Ruby (EWEA) Design: Clara Ros (EWEA) Finance data: Clean Energy Pipeline. All currency conversions made at GBPEUR 1.400 Cover photo: MHI Vestas Offshore Wind
The European offshore wind industry - key trends and statistics 1st half 2015 2 Mid-year European offshore wind energy statistics
In the first six months of 2015, Europe fully grid connected 584 commercial offshore wind turbines, with a combined capacity totalling 2,342.9 MW. Overall, 15 commercial wind farms were under construction. Once completed, these wind farms will have a total capacity of over 4,268.5 MW.
New offshore capacity installations during the first half of 2015 were up 200% compared to the same period the previous year.
FIGURE 1: ANNUAL INSTALLED OFFSHORE WIND CAPACITY IN EUROPE (MW)
2500
2000
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0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Full year H1 H2
Source: EWEA
The work carried out in European wind farms during the • 313 turbines (31 units or 11% more than during the first six months of 2015 is detailed below: same period last year) were erected in nine wind farms: Humber Gateway (UK), Westermost Rough • 584 wind turbines were fully grid connected, totalling (UK), Amrumbank West (DE), Baltic 2 (DE), Borkum 2,342.9 MW (up 200% compared to the same period Riffgrund I (DE), Butendiek (DE), Global Tech 1 (DE), last year) in twelve wind farms: DanTysk (DE), Gwynt y Luchterduinen (NL), and Kentish Flats Extension (UK), Mor (UK), Humber Gateway (UK), Westermost Rough (UK), Amrumbank West (DE), Baltic 2 (DE), Borkum • In the first days of July, turbine grid connection was Riffgrund I (DE), Butendiek (DE), Global Tech 1 (DE). fully completed at Luchterduinen and Trianel Winpark Luchterduinen (NL), Nordsee Ost (DE), and Trianel Borkum, which will be reflected in the 2016 Annual Windpark Borkum (DE), Offshore Wind statistics,
• A further 102 turbines, totalling over 422.6 MW, were • A 5.4 MW upgrade at Riffgat (DE) increased site installed but are currently awaiting grid connection, capacity to 113.4 MW. No extra turbines were installed. • 138 foundations (95 units fewer than the same period last year) were installed in five wind farms: As of 30 June 2015, cumulatively, there are 3,072 Gode Wind I+II (DE), Westermeerwind (NL), offshore wind turbines with a combined capacity of Amrumbank West (DE), Baltic 2 (DE), and Kentish 10,393.6 MW fully grid connected in European waters Flats Extension (UK), in 82 wind farms across 11 countries, including demon- stration sites.
The European offshore wind industry - key trends and statistics 1st half 2015 3 Summary of offshore work carried out during the first half of 2015
During the first six months of the year, work was carried out on 15 offshore wind farms. Foundations and turbines were installed and/or grid connected in three countries: Germany, the Netherlands and the United Kingdom.
TABLE 1: SUMMARY OF WORK IN OFFSHORE WIND FARMS BETWEEN 1 JANUARY AND 30 JUNE 2015
GERMANY THE NETHERLANDS UK TOTAL No. of farms 9 2 4 15
No. of foundations installed 75 48 15 138
No. of turbines erected 218 43 52 313
No. of turbines connected 406 38 140 584
MW fully connected to the grid 1,706.3 114.0 522.6 2,342.9
Source: EWEA
FIGURE 2: INSTALLATION AND GRID CONNECTION OF WIND TURBINES IN OFFSHORE WIND FARMS BETWEEN 1 JANUARY AND 30 JUNE 2015
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0 Amrumbank Baltic Borkum Butendiek Dan Global Gode Gwynt Humber Kentish Luchter Nordsee Trianel Wester Wester West 2 Riffgrund I (DE) Tysk Tech 1 Wind I+II y Môr Gateway Flats 2 duinen Ost Windpark Meerwind most (DE) (DE) (DE) (DE) (DE) (DE) (UK) (UK) Extension (NL) (DE) Borkum (NL) Rough (UK) (DE) (UK)
No. of Foundations No. of Wind Turbines No. of Wind Turbines Capacity added Installed Installed connected to the grid in H1 2015
Source: EWEA
The European offshore wind industry - key trends and statistics 1st half 2015 4 Developers Units made by four turbine manufacturers were connected to the grid during the period: Siemens, MHI 12 commercial wind farms connected wind turbines to Vestas, Adwen, and Senvion. Siemens has the largest the grid totalling 2,342.9 MW. share of newly connected capacity (1,339.6 MW, 57.2%), followed by Adwen (455 MW, 19.4 %), MHI Vestas (333 Figure 3 shows the share of connected MW per developer MW, 14.2%), and Senvion (215.3 MW, 9.2%). from 1 January to 30 June 2015 taking into account each company’s share in the projects. Power producers FIGURE 4: WIND TURBINE MANUFACTURERS’ SHARE account for over 60% of the installed capacity. OF GRID CONNECTED CAPACITY (IN MW) IN EUROPE BETWEEN 1 JANUARY AND 30 JUNE 2015
FIGURE 3: OFFSHORE WIND DEVELOPERS’ SHARE OF Senvion Siemens NEW GRID CONNECTED CAPACITY BETWEEN 215 1340 1 JANUARY AND 30 JUNE 2015 (MW) 9.2% 57.2%
MHI Vestas 333 14.2% Others RWE 392 289 16.7% 12.3% Adwen 455 Mitsubishi 19.4% Corporation E.ON 57 269 2.4% 11.5% Eneco 57 DONG 2.4% Energy 218 Axpo 9.3% International Source: EWEA 62 Stadtwerke 2.7% München 213 HEAG Sud- 9.1% hessische In terms of units, Siemens grid connected 347 turbines Energy (59.4 %), MHI Vestas 111 turbines (19%), Adwen 91 tur- 65 Trianel 2.8% 195 bines (15.6%), and Senvion 35 turbines (6%). 8.3% Siemens 67 2.9% EnBW FIGURE 5: WIND TURBINE MANUFACTURERS’ SHARE Kirkbi 132 OF GRID CONNECTED TURBINES IN EUROPE 90 5,6% BETWEEN 1 JANUARY AND 30 JUNE 2015 (IN UNITS) 3.8% Vattenfall Macquarie Capital & PGGM 108 127 4.6% 5.4%
Source: EWEA Senvion Siemens 35 347 6.0% 59.4%
Adwen Wind turbines 91 15.6%
During the first six months of 2015, 584 offshore wind MHI Vestas turbines were connected to the power grid, or 160.7% 111 19.0% more turbines than during the same period in the previous year. The average size of the wind turbines was 4.2 MW, a 20% increase from H1 2014, as larger turbines make their way from order books to the water.
Source: EWEA
The European offshore wind industry - key trends and statistics 1st half 2015 5 Financing highlights and FIGURE 6: PROJECTS REACHING FINAL INVESTMENT DECISION developments in 1st half 2015 and outlook
The first half of 2015 was a period of positive developments for the European offshore wind sector. € 7.1bn worth of investments Successful projects were able to attract sufficient financing, reflecting an increased appetite on multiple € 2.27bn transactions from both debt and equity markets. non-recourse debt
TABLE 2: INVESTMENTS IN OFFSHORE WIND FARMS H1 2015
Financial TOTAL INVESTMENT FINANCED NEW Close REQUIREMENT GROSS CAPACITY (EUR MM) (MW) Veja Mate (400 MW) Germany 3,510 843 € 1,900 mln estimated total investment │ € 1,275mln project finance debt
UK 3,590 980 Rampion (400 MW) € 1,900 mln estimated total investment │ financed on balance sheet Total 7,100 1,823 Race Bank (580 MW) € 1,690 mln estimated total investment │ financed on balance sheet Five projects worth €7.1bn in total reached final Innogy Nordsee 1 (332 MW) investment decision stage, financing 1.8 GW of new € 1,200 mln estimated total investment │ € 840mln project finance debt gross capacity. Nordergründe (111 MW) € 410 mln estimated total investment │ € 156mln project finance debt Non-recourse debt Project finance remained an important tool throughout H1 2015. Non-recourse debt increased significantly Transaction highlights from the same period last year to €2.27bn. 843 MW, Nordergründe offshore wind farm secured financing or the equivalent of 46% of the new gross capacity, was contracts from KfW IPEX Bank and the European financed on a non-recourse basis. Investment Bank. Earlier this year, Nordsee 1 became the first large scale offshore transaction to be completed The general trends of easing loan terms such as loan without the presence of any multilateral financial margins and maturity continued in the first half of 2015 institution. as well. This is due to the favourable conditions in the financial markets, the attractiveness of the sector and Non-recourse debt hit its highest ever volume in Germany the considerable experience that has been accumulated with the financing of Veja Mate wind farm. Project throughout a decade. sponsors Highland Group Holdings, Siemens Financial Services and Copenhagen Infrastructure Partners II will Commercial banks are increasingly taking a larger share provide the equity requirements in the form of share of financing. Multilateral backing is still important. capital and mezzanine loans, whereas the €1.27 bn It appears nonetheless to be less determinant in the debt requirements will be provided by a consortium of closing of a deal. Debt-to-equity ratios remain largely eight financial institutions. in the margins of 70:30. However, there is sufficient appetite from commercial banks to push the margins further on the debt side.
The European offshore wind industry - key trends and statistics 1st half 2015 6 Equity Finance In France, Caisse des Dépôts (CDC) will hold a 7.5% stake in Saint Brieuc offshore wind farm (496MW). FIGURE 7: INVESTMENTS AND DIVESTMENTS; MERGERS In the UK, Green Investment Bank invested £236 mln AND ACQUISTIONS (or the equivalent of 70 MW) in Rampion wind farm, as part of its larger strategy to help the industry with equity
2000 capital. 1751 1500 Transmission Assets
1000 FIGURE 8: INVESTMENT IN TRANSMISSION ASSETS 824
500 474 207 274 107 1800 0 -44 -141 Capacity in MW 1600 -500 1400 -1000 -997 1200
-1500 1000 -1607 800 -2000
Q1' 14 Q2' 14 Q3' 14 Q4' 14 Q1' 15 Q2' 15 MM EUR 600
Divestments Investments 400
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0 The equity markets have remained active in particular 20 11 2012 2013 2014 2015 H1 during the pre-construction phase, as the offshore wind Total Investment Requirement sector rushes in to recycle capital. Transaction Value
The general tendency for bigger offshore wind farms has resulted in a peak volume of MW divested in H1 2015 (figure excludes undisclosed values). Transmission lines are rapidly evolving as a strategic asset class due to their stable revenue streams. Notable transactions in the first quarter of 2015 include DONG Energy’s 66.66% stake acquisition of Hornsea In Germany, Dutch grid operator TenneT raised €1 bn 1 (1.2 GW), Statkraft’s 50% stake acquisition in Triton for DolWin 1 transmission line, through a green bond Knoll (900 MW), and Scottish Power Renewables’ issuance that was twice oversubscribed. acquisition of a 50% stake in East Anglia 1 (714MW) wind farm. In the UK, two projects reached financial close: the Gwynt y Mor transmission line and Walney 1, which The large scale investment and stable income returns together raised approximately €587 mln of commercial of the offshore wind sector have continued to attract debt. institutional investors, who are increasingly looking at assets under construction. In Germany, Macquarie Capital acquired a 49.89% stake in Baltic 2 (288MW) windfarm in January 2015. Later in the year, PGGM invested an undisclosed amount in Baltic 2, alongside Macquarie Capital.
The European offshore wind industry - key trends and statistics 1st half 2015 7 Outlook for H2 2015 and 2016
TABLE 3: OFFSHORE WIND PROJECT PIPELINE
Project Pipeline COUNTRY TOTAL INVESTMENT REQUIREMENT CAPACITY (MW) (EUR MM) Nobelwind Belgium 650 165
EnbW Hohe See Germany 1,500 492
Luchterduinen1 Netherlands 420 129 Dudgeon United Kingdom 2,190 402
Beatrice United Kingdom 2,979 664
Galloper United Kingdom 2,162 340
Total 9,901 2,192
Notable deals that have been announced in the financial close process include Nobelwind, Hohe See, Galloper, Dudgeon, Beatrice, and the refinancing of Luchterduinen1. Next year, the Dutch Borssele tender and the French tender are expected to reach the market.
There is an overall healthy pipeline of offshore wind projects expected to reach financial close by 2015 / 2016, which in total would require the mobilisation of over €10 bn for financing.
1 The initial investment value was estimated around €420 mln.
The European offshore wind industry - key trends and statistics 1st half 2015 8 Always aim high EWEA 2015 Annual Event
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