Friday 29 Mar 2024
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KUALA LUMPUR (Dec 23): On average, offshore wind projects coming online in 2021 are getting revenues that are 55% lower than in 2014 on a per megawatt hour (MWh) basis.

In a commentary on Wednesday (Dec 22), energy research and consultancy Wood Mackenzie (WoodMac) head of offshore wind research Søren Lassen and offshore wind senior research analyst Shimeng Yang said that based on the most recent bids and their projections of power prices, revenues in 2025 will be 25% lower than in 2021.

In WoodMac’s “Global Offshore Wind Revenue Dynamics” report, the analysts said as projects are weaned off subsidies, the structure of revenue is also fundamentally changing as projects become more exposed to power prices.

“For the mature top six markets, we found that capture prices’ share of revenues doubled from a weighted average of 30% in 2014 to 50% in 2021.

“By 2026, we forecast that more than 80% of revenues will be driven by wholesale power prices,” they said.

WoodMac forecast that through 2025, revenues will decline by 25%, while costs will only fall by 15%, challenging project returns.

It said reductions in subsidies are likely to help drive accelerated growth in the offshore wind industry.

WoodMac said 70 offshore wind targets had been announced since 2016 by governments across the world.

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