fully grid connected – 25 per cent less than during the same period in 2013 (1,045MW) – and 282 wind turbines that were installed but not connected during the period, making a total of 310 offshore turbines awaiting grid connection. Once connected, they will add a further 1,200MW of offshore wind energy capacity. The units were erected at the following windfarms: Borkum West 2.1 (DE), Dan Tysk (DE), Global Tech 1 (DE), Gwynt y Môr (UK), Meerwind Sud/Ost (DE), Nordsee Ost (DE), Northwind (BE) and West of Duddon Sands (UK). A total of 233 foundations (35 units fewer than the same period last year) were installed at 13 windfarms: Amrumbank West (DE), Borkum Riffgrund I (DE), Borkum West 2.1 (DE), Butendiek (DE), Dan Tysk (DE), Global Tech 1 (DE), Gwynt y Môr (UK), Humber Gateway (UK), Meerwind Sud/Ost (DE), Nordsee Ost (DE), Northwind (BE), Westermost Rough (UK) and the Methil Demo at the Energy Park Fife (UK). Preparatory work has begun at the 600MW Gemini windfarm off the coast of the Netherlands (see elsewhere in this issue). In total, on 1 July 2014, there were 2,304 offshore wind turbines with a combined capacity of 7,343MW fully grid connected in European waters in 73 windfarms across 11 countries, including demonstration sites. “Despite offshore wind power installations being lower than in the first six months of last year, it remains the fastest-growing power sector in Europe,” said Mr Wilkes. Four commercial windfarms and one demonstration project connected wind turbines to the grid totalling 781MW. Power producers account for over 78 per cent of installed capacity. Units made by three turbine manufacturers were connected to the grid during the period: Siemens, MHI Vestas and Samsung. The former has the largest share of newly connected capacity (633MW, that is, 81 per cent), followed by MHI Vestas (141MW, 18 per cent) and Samsung (7MW, 1 per cent), which connected its 7MW demonstration wind turbine to the grid. In terms of units, Siemens grid connected 176 turbines (79 per cent), MHI Vestas 47 turbines (21 per cent) and Samsung one turbine. The average size of the wind turbines was 3.5MW, slightly less than during the first six months of 2013. There was considerable financing activity in the offshore wind sector in the first half of 2014, with multiple transactions on the equity side and the largest offshore wind financing to close to date: the 600MW Gemini project (also see elsewhere in this issue).


The Gemini transaction, which closed on 13 May 2014, included both equity and debt funding, with independent power producer Northland Power, a Canadian developer, acquiring 60 per cent of the project, alongside contractors Siemens (20 per cent) and Van Oord (10 per cent), from developer Typhoon Offshore, with initial investor HVC, the Dutch waste-to-energy company, keeping its original 10 per cent stake. The €2.8 billion transaction included a senior debt financing of €2.1 billion provided by a consortium of 12 commercial banks and four public funding institutions, as well as a ‘mezzanine tranche’ provided by Danish pension fund PKA alongside Northland Power. Commercial funding topped €1 billion, with large individual commitments from banks, showing a healthy appetite from the lending market for the offshore wind sector, including construction risk.


“This appetite will be further confirmed in the second half of the year with several transactions currently in the market and expected to close in the coming months,” the EWEA noted. These include Westermost Rough (UK, 210MW), MEG1 (DE, 400MW), Nordsee 1 (DE, 330MW) and Galloper (UK, 340MW)


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plus Cape Wind (370MW) and Deepwater (30MW) in the US. Several of these transactions are backed by power producers, demonstrating their growing appetite for non-recourse debt in offshore wind.


On the equity side, the market has also been dynamic with the following transactions closing (in addition to the equity sale that took place on the closing of Gemini): • Dong Energy sold half of its 50 per cent stake in the 630MW London Array project to Caisse de Dépôt et Placement du Québec (CDPQ) in January. • WPD sold half of its remaining stake in Butendiek (288MW, DE) in January to Switzerland’s Elektrizitätswerk der Stadt Zürich, reducing its participation in the project to 54 per cent. • Dong Energy sold 50 per cent of Westermost Rough (210MW, UK) to Marubeni (25 per cent) and to the UK Green Investment Bank (25 per cent) in March. • RWE sold a 10 per cent stake in Gwynt y Môr (576MW, UK) to the UK Green Investment Bank, in March. In the UK, Statoil and Statkraft have reached a final investment decision (FID) on the Dudgeon offshore windfarm (402MW), agreeing to invest €1.9 billion in the construction of the project. Dudgeon is the first windfarm reaching FID under the new UK Contract for Difference mechanism. A number of other equity transactions have been reported as being underway as owners of operating projects seek to recycle capital in light of a growing interest from financial investors, in particular, infrastructure funds and pension funds for operational offshore wind assets. However, as the Gemini and Westermost Rough transactions


show, investors are also increasingly looking at projects under construction, and most such transactions are likely to happen before the end of 2014. “Overall,” said the EWEA, “while transactions remain complex and take time to close, there is an active market for offshore wind projects and a strong pipeline of new deals. Projects with a well designed commercial and/or financial structure are able to find funding for construction or refinancing, allowing the sector to benefit from competitive capital costs.” OWJ


Despite a slowdown in the rate at which turbines are installed, offshore wind is growing quickly


Offshore Wind Journal I 3rd Quarter 2014 I 13


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