1、GLOBAL WIND ENERGY COUNCIL GLOBAL OFFSHORE WIND REPORT 2024 GWEC.NETGlobal Wind Energy CouncilRue de Commerce 31 1000 Brussels,Belgium Lead Authors Rebecca Williams,Feng Zhao Contributors and editing by Ben Backwell,Joyce Lee,Amisha Patel,Mark Hutchinson,Liming Qiao,Thoa Nguyen,Anjali Lathigara,Wanl

2、iang Liang,Esther Fang,Janice Cheong,Weng Han Tan,Ann Margret Francisco,Thang Vinh Bui,Trang Nguyen,Ramon Fiestas,Roberta Cox,Marcela Ruas,Juliana Pontes de Lima,Heba Rabie,Jeanette Gitobu,Reshmi Ladwa,Kshitij Madan,Martand Shardul,Wangari Muchiri,Nadia Weekes,Charles Ogilvie,Navneet Khinda,Julie Ya

3、mamuraAdditional contributions Green Giraffe,the World Bank Group ESMAP,Corio Generation,South African Wind Energy Association SAWEA,International Renewable Energy Agency(IRENA),DNVCover imageTristan Stedman-MHI Vestas Offshore WindPublished17 June 2024Designlemonbox www.lemonbox.co.ukGLOBAL WIND EN

4、ERGY COUNCILAssociate SponsorsPodcast SponsorCo-leading sponsorsLeading Sponsor 1GWEC|GLOBAL OFFSHORE WIND REPORT 2024Foreword 2Executive Summary 10Chapter 1:Offshore wind as a key technology in the global energy transition-offshore wind competitive advantage 17Chapter 2:Building an offshore growth

5、framework to accelerate energy transition 27Market Status 2024 89Markets to Watch 94 China 95 Japan 97 Vietnam 99 Philippines 101 South Korea 104 Australia 106 India 108 Colombia 1 10 Brazil 1 12 Europe 1 14 South Africa 1 16 MENA 1 17 USA 1 18 Small Islands Developing States 121Market Outlook 2024-

6、2033 123Appendix 146Table of ContentsGWEC.NETForeword 2Rebecca WilliamsChief Strategy Officer-Offshore Wind,Global Wind Energy CouncilOur 2024 Global Offshore Wind Report comes to you at an important moment in the history of the offshore wind technology.To date,offshore wind has achieved remarkable

7、success establishing itself as a maturing,competitive,globally diverse,and scalable industry.The growth of offshore wind is now so much more than a European,Chinese,or American story.This global industry must now“chart a course”for the tremendous growth that lies ahead.Across the world in 2023,the i

8、ndustry connected 11 GW of offshore wind to the grid representing a 24%year-on-year(YoY)increase-the second-best year ever despite headwinds in key markets.The bigger story is found beyond the numbers.Its important to note the offshore wind industry and its partners in government,institutions,and ci

9、vil society are now coalescing and driving momentum in anticipation of the industrys impending growth and importance as a clean energy technology.Signals from around the world show the building momentum.Membership of the Global Offshore Wind Alliance(GOWA),a diplomatic,multi-stakeholder initiative f

10、ounded by GWEC,IRENA,and the Government of Denmark has swelled to over 20 governments.These governments have pledged to collaborate towards installing 380 GW of offshore wind by 2030 and 2000 GW by 2050.GWEC is seeing widespread recognition across industry and governments that the key drivers for of

11、fshore wind are now in place-from government commitments and sustainable economic growth,to increased consumer demand and industrial decarbonisation.In Brazil,offshore wind is seen as the clean power source of the future for its heavy industry.In the Philippines,the government is embracing offshore

12、wind to meet its fast-growing domestic demand and sustainable economic development agenda.Momentum continues to build in countries like South Korea,where international and domestic companies are pursuing manufacturing facilities set to create jobs and regenerate local economies.In Europe,a new wave

13、of markets neighbouring the North and Baltic Seas,Mediterranean,and Atlantic Ocean are seeing offshore wind as a way to enable economic and industrial growth.Poland sees offshore wind as a route to stimulate industrial growth,whilst Ireland has set out an ambitious future framework for offshore wind

14、 growth.The last year has also seen the rise of markets that were,until recently,considered to be emerging markets.Through our continued engagement,along with many partners and collaborators,these markets have successfully moved further along their offshore wind pathway.For example,few would have pr

15、edicted that Australian offshore wind would graduate so rapidly from its emerging status.But GWECs strong engagement with the Australian government and its agencies over the last few years,alongside our partners,has helped share lessons learned.This has allowed the Australian government to accelerat

16、e towards the award of their first ever offshore wind zone in Gippsland,Victoria.Welcome to our 2024 ReportGWEC|GLOBAL OFFSHORE WIND REPORT 2024Foreword 3Similarly,there is growing momentum in Japan,where GWEC has published the first offshore wind cost reduction study,which was integral for gaining

17、political buy into offshore wind.At the time of writing,the Japanese Diet(the national legislature)is on the verge of passing a bill to enable offshore wind within the Exclusive Economic Zone,the key to unlocking larger-scale offshore wind projects.I have been closely following the Japanese market s

18、ince I joined GWEC,so it was very encouraging to see engagement from across government departments and strong civil society backing at a recent GWEC/REI(Renewable Energy Institute)roundtable.Japan,South Korea,Australia,the Philippines,Brazil,and Colombia are now taking firm steps towards a fully-fle

19、dged offshore wind industry.These countries represent a growing set of governments,both federal and subnational that have retained and indeed bolstered their commitments to develop offshore wind.It has not been all plain sailing however,and in the US and UK markets,the industry dealt with some signi

20、ficant challenges in 2023.Macroeconomic headwinds combined with policy challenges in these markets have impacted what is still a relatively young industry compared to conventional energy generation sources.Our analysis suggests that the offshore wind industry is now putting these growing pains behin

21、d it and has learnt some important lessons in the process.But these experiences also show that we cannot leave the success of the energy transition up to the market;a strong and collaborative framework for growth is needed.Our 2024 report shows a bright future for offshore wind,provided the sector i

22、s able to convert strong global and government ambitions into reality.It is imperative that our efforts are laser focused on bringing online the swathe of projects scheduled to be in the water by 2030,whilst simultaneously laying down a strong framework for the vast bulk of offshore wind which will

23、be deployed in the 2030s.Our 2024 report aims to support industry and policy makers in achieving these goals.At the global scale we have just seven years to hit the 380 GWs of offshore wind needed to stay on a 1.5C trajectory.There is no time to lose.Sponsor 4As the global wind industry navigates re

24、gional economic and policy challenges,there are accomplishments to recognise in the manufacturing supply chain.Despite the headwinds experienced in 2023,the manufacturing industry responsible for towers,and fixed and floating offshore wind foundations continued to expand with more final investment d

25、ecisions supporting an optimistic outlook.The transformation of steel into the key components of the energy transition was well underway during 2023 supported by record new investment commitments.The outcome of which will enable the world to build and install turbines,towers,and foundations(both fix

26、ed-bottom and floating)of immense sizes,never before realised.New factories in Asia and the UK have moved ahead with significant industrial expansion supporting new fixed-bottom foundation production capacity.We also saw core European manufacturers announce continued investment in capacity expansion

27、 utilising the most advanced high quality manufacturing capabilities in the world.As observed across the globe,the benefits of this type of offshore wind manufacturing investment can lead to new economic opportunities in the local supply chain.The growth of foundation and tower manufacturing will su

28、pport an expanding wind industry with new opportunities for other components including secondary steel and support structures.With new capacity already online or planned for essential pipe mills,offshore fabrication yards,and shipyards,regional fabricators around the world help drive one of the most

29、 rapid global industrialisation periods we have ever seen in the wind industry.While details of heavy industrial steel fabrication are not always front-page news for many industries,offshore wind projects are different.They present unique challenges in size and scale during manufacturing to deliver

30、the high quality required of these immense welded structures.Since design concepts,manufacturing engineering decisions and commitments for new capacity typically occur two plus years in advance of the first steel for installation,the criticality of a resilient and successful steel transformation sup

31、ply chain should not be underestimated.The industry can anticipate that as offshore wind capacity continues to increase,it will drive further global footprint expansion.This growth is likely to stimulate local economies and create jobs in the regions benefiting from these developments.Additionally,i

32、t will encourage investment in land-based infrastructure projects,supporting the broader economic Commitment to Expanding the Global Supply ChainSteven B.HedlundPresident and Chief Executive Officer Lincoln Electric The key to unlocking the full capacity of the supply chain is manufacturing process

33、innovation and advanced automation technology,which drive profitable project execution.5impact of offshore wind energy expansion.Fundamental supply chain resilience for the offshore wind industry of the future requires alignment with the ambitions and timelines of its key stakeholders.With regional

34、and country specific commitment to support continued expansion,the offshore wind supply chain of the future will need to produce at elevated production levels,the highest ever recorded.Given the present levels of investment commitment across the entire supply chain,certainty for projects is critical

35、 to a thriving metal fabrication industry.While there have been many pieces of encouraging news across the global supply chain,more work is needed to address the practical challenges of size,scale,and installation targets forecast around the world.This years report outlines key actions needed to con

36、tinue developing a sustainable global supply chain that will be critical to meeting installed capacity targets.Our experience in this industry and others has shown that the keys to unlocking the full capacity of the supply chain are manufacturing process innovation and advanced automation technology

37、,which drive profitable project execution.Equally essential to success is the acquisition and retention of a highly skilled workforce in the trades required to execute these projects.By aligning these resources,we will continue to see how offshore wind continues to play a pivotal role in the future

38、energy supply chain.SponsorGWEC|GLOBAL OFFSHORE WIND REPORT 2024Sponsor 6After a challenging and volatile period in energy history,it finally seems that 2023 represents a turning point,as the year was marked by a social and political consensus on the need to accelerate the energy transition.At a tim

39、e of geopolitical and macroeconomic uncertainty,COP28 in Dubai delivered a major agreement on global climate action.Nearly 200 countries committed to phasing out fossil fuels and dramatically accelerating investment in electrification,with the goal of tripling renewable energy capacity by 2030.Elect

40、rification has become a essential for improving strategic autonomy,competitiveness,and for environment sustainability,while at the same time fostering industrial development and job creation.Despite still dealing with challenging times and working our way through to promote the best approach to achi

41、eve our sustainability goals,we can also state here that 2023 has been successful for offshore wind.Close to 11 GW of new capacity was added to the grid,making it the second-best year in the technologys historic records,as featured in this years Global Offshore Wind Report.In particular,2023 marks a

42、 decisive take-off of offshore wind energy for Iberdrola too.We currently have approximately 1.8 GW in operation and another 3 GW under construction,representing a total investment of over EUR 10 billion.Last year,we completed the installation of 62 wind turbines at the Saint Brieuc wind farm in Fra

43、nce.In January,we started delivering the first power to the grid from Vineyard Wind One,which will be the first large-scale offshore wind farm in the United States.These figures reinforce our belief that offshore wind will be a key piece of the backbone that will shape the future energy system.The n

44、ext decade will be fundamental for harnessing the potential of offshore wind technology,unfolding investments and accelerating the energy and economic transition.To reach the 1.5C climate goal,it is estimated that nearly 380 GW of offshore wind needs to be built by 2030,which is five times the curre

45、nt offshore wind installation capacity.To achieve this,we must continue advocating for transparent and responsible auction and seabed lease designs,stable regulatory frameworks,and faster and efficient permitting procedures.GWEC has been doing an excellent job over recent years,spreading the sector

46、views,sharing concerns,and facilitating common ground with key stakeholders.It is paramount that GWEC continues its engagement with government authorities,regulators,and other relevant institutions and market players to uphold everyones commitment.The complex structure,volume,and nature of offshore

47、wind projects require all parties to come together to find suitable and efficient solutions,ensure a fair allocation of risks and revenues and make decisions that will not be regretted.Delving into the year-to-date statistics for 2024,it appears that Jos Oriol HoyosChairman and CEO of Iberdrola Rene

48、wables InternationalSeize the momentum to build on the significant progress of 2023 7investment is soaring to a record of$76.7 billion,according to the figures in this report.However,if we want to continue building a secure and accessible energy model,based on electricity,we cannot forget that grid

49、access,network development and financing tools must be included in the agenda,as well as strengthened industrial policies to support a healthy supply chain capable of meeting the demands of offshore wind developments.This year represents a significant milestone in our journey towards a cleaner and g

50、reener future,and I encourage the industry to seize the momentum.Lets work together so next that year,we can proudly celebrate another record set and move another step closer to achieving our ambitions.SponsorGWEC|GLOBAL OFFSHORE WIND REPORT 2024Sponsor 8Offshore wind has been a driving force in hum

51、an progress for thousands of years.Powered by wind,sailboats enabled humans to enter the Age of Discovery,exploring the unknown world,spreading modern civilisation and laying the groundwork for globalisation.Today,the rise of offshore wind power is endowing ocean wind with new value,bringing afforda

52、ble and sustainable energy while providing solutions to replace fossil fuels and to meet the climate targets.In the past two decades,offshore wind power has achieved remarkable success and established itself as one of the most important renewable energy technologies for supporting the global energy

53、transition.2023 was a challenging year for the offshore wind industry with high inflation,increased interest rates,and capital cost.Entering 2024,however,the market conditions for offshore wind have improved,with signs of market rebalancing and recovery emerging.The growth momentum is expected to re

54、sume as the recent Bloomberg NEF statistics show that global offshore wind investment has soared to a record$76.7 billion last year,despite rising costs forcing developers to delay or cancel projects.GWECs Global Offshore Wind Report 2024 reveals that a new wave of growth is expected from the second

55、 half of this decade,increasing the share of global new wind installations from todays 9%to at least 25%by 2033.Offshore wind will be a key building block to achieve a 1.5C pathway.To meet this ambition,nearly 380 GW of offshore wind needs to be built by 2030.At COP 28,over 130 countries committed t

56、o the goal of tripling renewable energy by 2030,setting the stage for stable growth in this decade and beyond.As the worlds leading offshore wind turbine supplier in new installations in 2023,Mingyang Smart Energy has been dedicated to implementing the philosophy of global cooperation and sharing.We

57、 have expanded our business into the“Belt and Road”countries and other emerging overseas markets.Our business operations now cover regions such as Southeast Asia,East Asia,Latin America,Europe,and the Middle East and North Africa.In the The next decade is critical to offshore leading the energy tran

58、sitionMr.Zhang QiyingPresident&CTO,Mingyang Smart EnergyTechnological innovation is at the heart of the energy transition.Only through technological innovation can we further reduce the cost of energy,ultimately achieving large-scale offshore wind power deployment and the global energy transition 9p

59、ast five years,we have secured orders in Italy,the UK,Serbia,Japan,South Korea,Vietnam,and the Philippines.Our products and services have been recognised and acknowledged by international partners and clients.Technological innovation is at the heart of the energy transition.Only through technologica

60、l innovation can we further reduce the cost of energy,ultimately achieving large-scale offshore wind power deployment,and the global energy transition.As a technology leader,Mingyang Smart Energy has achieved several milestones,including the installation of the worlds first typhoon-resistant floatin

61、g wind turbine,Chinas first“double hundred”deep-sea floating wind turbine,and the worlds first jacket foundation featuring a net cage system for fish farming.Additionally,we have launched the worlds largest offshore wind turbine model with a rated power rating of 22 MW,as well as the worlds largest

62、twin-rotor floating wind platform.According to the global wind supply chain report recently released by GWEC and Boston Consulting Group(BCG),by 2026/2027,all regions,except for China,are expected to face the bottlenecks in the offshore wind supply chain.To build a robust offshore wind supply chain,

63、to meet the needs of a 1.5C world,global collaboration and cooperation between governments and industry is more important than ever.We anticipate that the next decade will be a critical period for offshore wind power to lead the energy transition.Therefore,let us work together to create a better fut

64、ure.SponsorGWEC|GLOBAL OFFSHORE WIND REPORT 2024 10EXECUTIVE SUMMARY 11GWEC|GLOBAL OFFSHORE WIND REPORT 2024Executive SummaryMarket Status 10.8 GW of new offshore wind capacity was added to the grid worldwide last year,bringing the total global offshore wind capacity to 75.2 GW by the end of 2023.Ne

65、w additions were 24%higher than the previous year,making 2023 the second-highest year in offshore wind history.China led the world in annual offshore wind developments for the sixth year in a row with 6.3 GW added in 2023,demonstrating its capability to maintain stable growth in the new era of grid

66、parity.Three other markets commissioned new offshore wind capacity in Asia last year:Taiwan(China,692 MW),Japan(140 MW),and South Korea(4.2 MW).Europe had a record year in 2023,with 3.8 GW of new offshore wind capacity from 11 wind farms commissioned across seven markets accounting for most of the n

67、ew capacity.The Netherlands commissioned 1.9 GW of offshore wind capacity in 2023,making it the regions largest market in terms of new additions,followed by the UK(833 MW),France(360 MW),Denmark(344 MW),Germany(257 MW),Norway(35 MW),and Spain(2 MW).In North America,offshore wind turbines were instal

68、led at two utility-scale offshore wind projects in the US before the end of last year,but no offshore turbines were commissioned in 2023.By the end of 2023,41 GW and 34 GW of offshore wind capacity were in operation in Asia and Europe respectively.The two regions combined made up 99.9%of total globa

69、l offshore wind capacity.Although Europe has lost its world-leading position to APAC in total installed offshore wind capacity,it remains the worlds largest market for floating wind and the technology hub for floating wind turbines and foundations.Outside Europe and Asia,North America had 42 MW of o

70、ffshore wind in operation at the end of last year,with all installations located in the US.Market Outlook 2023 was a turbulent year for the offshore wind industry on both sides of the Atlantic Ocean.Challenges such as inflation,increased capital costs,and supply chain constraints created uncertainty

71、 in the sector.Considering the near-term challenges,GWEC Market Intelligence has downgraded its global offshore wind outlook for total additions in 20242028 by 10%compared with our 2023 projection.Despite the headwinds experienced in 2023,governments and developers remain committed to developing off

72、shore wind and the global offshore wind market outlook in the medium term remains resolutely promising.The inclusion of a global goal of tripling renewable energy by 2030 in the final COP28 text is unprecedented and historic for offshore wind and other renewable energy sources.A favourable The Data:

73、The offshore wind sector poised for a new wave of growth in the next ten yearsFeng ZhaoChief Research Officer,Global Wind Energy CouncilGWEC.NET 12political environment across the globe and the urgency of ensuring energy security driven by Russias invasion of Ukraine,position offshore wind as a vita

74、l resource for achieving both objectives.Exponential growth is expected this decade and beyond.With a compound average annual growth rate of 25%until 2028 and 15%up to the early 2030s,new installations are expected to sail past the milestones of 40 GW in 2029 and 60 GW by 2032.GWEC Market Intelligen

75、ce expects more than 410 GW of new offshore wind capacity to be added over the next decade(20242033),of which more than two-thirds is likely to be added in the second half of the forecast period(2029-2033).Annual offshore wind installations are expected to triple in 2028 from 10.8 GW in 2023.By 2033

76、,they are expected to reach 66 GW,bringing the offshore share of new wind power installations from todays 9%to at least 25%.Considering the strong growth expected in China,as well as burgeoning new Asian markets,Asias leading position in offshore wind installations is unlikely to be challenged in th

77、e next decade,but the outlook for offshore wind in Europe remains stable and optimistic.Although GWEC Market Intelligence has downgraded the 2030 offshore wind installation outlook for the US from 25 GW(predicted in 2023)to 15 GW,North America will remain the third-largest offshore wind market by 20

78、33,followed by the Pacific region and Latin America.Since the release of our Global Offshore Wind Report 2023,progress has been made in every region of the world for floating wind.Following our latest global stocktake of floating wind development,however,GWEC Market Intelligence believes that the co

79、mmercialisation of floating wind is unlikely to be achieved until the end of this decade(2029/2030).We have,therefore,downgraded the global floating wind forecast and predict 8.5 GW to be built globally by 2030,22%lower than last years projection.Our near-term offshore wind market outlook(20242028),

80、built using a bottom-up approach,is based on GWEC Market Intelligences global offshore wind project database,which covers projects currently under construction,global auction results and announced offshore wind tenders worldwide.For the medium-term market outlook(20292033),a top-down approach was us

81、ed alongside existing project pipelines.This takes into account existing policies and medium/long-term national and regional offshore wind targets.There is still an implementation gap between declared targets and the rate of annual installations.The areas of permitting,finance,supply chain,and grids

82、 will remain key for forecast growth to materialise,and to propel offshore wind power development into a new phase of even faster growth.Annual offshore wind installations are expected to triple in 2028 from 10.8 GW in 2023.13GWEC|GLOBAL OFFSHORE WIND REPORT 2024The StoryOffshore wind is now poised

83、for truly,global growth.2023 was the second-best year on record for offshore wind,with 11 GW installed.The gathering momentum of offshore wind played a key supporting role in achieving this record with another strong year of installations,along with plans for long term growth from the industry and g

84、overnments around the world.This 2024 edition of the Global Offshore Wind Report demonstrates that the growth of offshore wind is now so much more than a European,Chinese,or American story.The next wave of offshore wind markets has arrived,as governments across Asia-Pacific and Latin America are emb

85、racing offshore wind as a solution to providing clean,affordable power to their people and industries.Governments,civil society,and the private sector are already working on implementing the economic,social,and environmental measures to ensure its long-term success.The priority now must be continued

86、 collaboration between industry and policymakers to overcome hurdles to rapidly scale up this crucial technology for the economic and environmental well-being of people and economies around the world.Over the last two decades,the offshore wind sector has achieved remarkable success establishing itse

87、lf as a mature,competitive,and globally scalable industry.Our 2024 report findings bear this out;despite challenging conditions in the US and,to a certain extent,in the UK,2023 was the second-best year ever for offshore wind.11 GW of offshore wind was installed and connected to the grid last year,re

88、presenting 24%year-on-year(YoY)growth.The total amount of offshore wind globally has now reached 75GW.Progress in countries continues apace.For example,Australia recently announced the results of the Gippsland feasibility license awards,launching Australias first offshore wind zone which could see 1

89、2 projects with combine capacity to generate 25 GW of electricity.In Japan,at the time of writing,a bill to expand offshore wind into the Exclusive Economic Zone(EEZ)is expected to pass in the next few days.The new legislation would allow wind The Story:Charting the course for offshore windGWEC.NET

90、14farms to be installed further out to sea from current territorial and internal waters,paving the way for larger scale offshore wind developments.At the same time,GWEC is working to support the government of the Philippines as the country moves rapidly towards holding its first offshore wind auctio

91、n.South Korea has secured sizable investments from key manufacturing players.Vietnam recently released a draft proposal and accompanying resolution for an offshore wind pilot mechanism.In Latin America,the passage of the offshore wind law is shortly expected in Brazil and Colombia has now re-launche

92、d its offshore wind auction.In Europe,a new wave of markets is similarly seeing offshore wind as a way to enable economic and industrial growth.Ireland has set out an ambitious future framework for offshore wind growth,whilst Poland sees offshore wind as a route to stimulate industrial growth.Offsho

93、re wind has a key role to play in supporting the global energy system to reach 1.5C,due to its scale and reliability.At COP 28,over 130 countries committed to tripling renewable energy by 2030,setting the stage for a new wave of growth for offshore wind beyond this decade.To meet a 1.5C-trajectory,t

94、he world will need at least 380 GW of offshore wind by 2030 and 2,000 GW by 2050.There are promising indicators that momentum is building and growing confidence that this goal will be achieved.Firstly,membership of the Global Offshore Wind Alliance(GOWA)has surged,with now over twenty governments fr

95、om across the world recognising the crucial role that offshore wind can play in their energy and economic transition.Governments,industry,and stakeholders joining GOWA agree to collaborate to achieve these targets.GWECs rolling ten-year outlook to 2033 shows that,with the right frameworks in place,t

96、he world can be on course to deploy 487 GW of offshore wind by the end of 2033.Our outlook takes into account what we see in front of us.Increasingly,countries around the world are recognising the myriad benefits that offshore wind brings to their economies and are therefore placing offshore wind at

97、 the heart of their industrial growth plans.In Part 1 of our 2024 report,we outline these key drivers of offshore wind development,noting the strong case for offshore wind from an energy transition,reliability,cost,and industrial perspective.The report finds that,despite macroeconomic trends such as

98、 the rise in commodity prices and interest rates,offshore wind remains cost competitive in comparison to other technologies.Our 2024 report shows that key offshore wind growth markets are taking important steps towards developing into maturing ones.GWEC is now seeing the rise of markets that were,un

99、til recently,considered to be emerging markets.Meanwhile,in mature markets where offshore now holds a significant position in the energy mix,the technology is now proven to have the ability to save households money compared to conventional energy sources.Through GWECs continued engagement,along with

100、 many partners and collaborators,this new wave of markets has successfully moved along their offshore wind pathway.Japan,South Korea,Australia,and the Philippines are now taking steps towards a fully-fledged offshore wind industries and are seeing offshore wind as a key tenet of their economic and i

101、ndustrial growth strategies.GWEC therefore notes that these countries have the potential to make considerable impacts on the global offshore wind industry and its supply chain.To capitalise on the momentum outlined above,the 2024 report outlines new tools for achieving unprecedented collaboration be

102、tween the public and private sectors to advance offshore wind.It then outlines a seven-pillar growth framework designed to scale offshore wind globally.Unprecedented collaboration will be key in realising this ambitious growth trajectory will be predicated on governments,industry,and stakeholders wo

103、rking collaborating in new and unprecedented ways to unlock the growth potential and turn targets into turbines in the water.GWEC has been cognisant for some time that we have an important role to play in this endeavour.Thats why The Story 15GWEC|GLOBAL OFFSHORE WIND REPORT 2024we have incubated and

104、 co-founded two key initiatives to progress offshore wind globally:l The Global Offshore Wind Alliance,GOWA,co-founded with IRENA and the Government of Denmark,is a diplomatic alliance with now over 20 members.GOWA brings together governments with high offshore wind ambitions,with the industry,and w

105、ider stakeholders such as financiers,institutions,and other ocean economy actors.GOWA members will collaborate to unpick key challenges to offshore wind,and proactively address blockers,such as financing for offshore wind in emerging markets and developing economies(EMDEs)and scaling regional supply

106、 chains for offshore wind.l Ocean Energy Pathway,OEP,is an independent not-for-profit organisation which works with industry,governments,and civil society organisations to accelerate offshore wind in key global markets through investing in high quality technical assistance.OEP will work with wider s

107、takeholders to improve the social acceptance of offshore wind,forging a strong blue economy vision for the technology.A shared growth framework for offshore wind Ultimately GWEC believes that the success of offshore wind,and indeed that of the wider sector in general,will depend on whether the indus

108、try grasps the opportunity of global market growth firmly enough.In Part 2 of 2024 report,GWEC offers a framework for this accelerated growth of offshore wind,across seven key vectors:Vector 1.Accelerating the financing of offshore wind in mature and emerging markets,across the global north and sout

109、h Globally,there is a substantial amount of capital which is ready to deploy into the offshore wind sector but there is a shortage of bankable projects which are properly structured,permitted and de-risked with viable offtakers or a viable route to market.In mature markets,the report focuses on fact

110、ors which impact the cost of capital and can increase risk,including non-financial barriers.For mature markets,GWEC recommends that governments and industry work together to prioritise getting GW into the global market by stopping race-to-the-bottom tender mechanisms,avoiding negative bidding and en

111、suring indexation of offtake prices.The amount of capital being invested in EMDE markets lags far behind investment levels in mature markets and across the global north.GWEC proposes that these investments do not currently happen at the sufficient scale and volume due to(among other things)risk perc

112、eptions which may not be reflective of the actual underlying risk(e.g.risks may be over-stated).Blended finance is proposed as a necessary solution,but the report also notes the need for new approaches to concessional and blended finance to scale sufficiently to meet the multi-trillion dollar needs

113、of EMDEs through 2030 and on to 2050.Vector 2.Growing demand for offshore wind-industrial offtakers and development of green products to accelerate growth Some industry sectors are harder to decarbonise than others,which brings the focus on offshore wind as a key agent in supporting efforts towards

114、this challenging goal,whilst providing non-state vehicles for offtake.Representing approximately a quarter of the worlds energy consumption and a fifth of total CO2 emissions,hard-to-abate sectors include heavy duty vehicles,shipping,aviation,as well as industrial production processes.Iron,steel,cem

115、ent,mining,and ammonia and fertiliser production in particular require very large amounts of power and heat,making them extremely emissions intensive.This section of GWEC.NET 16the report explores the opportunity for green products in general and recommends market and regulatory incentives to drive

116、the production of green hydrogen products in particular.Vector 3.Building the global offshore wind supply chain for a 1.5C world GWECs detailed work on supply chain growth is captured in this section.To meet the level of growth needed for offshore wind to achieve 380 GW of OFW by 2030,the wind indus

117、try must not lose focus on the fundamental principle of growth to support supply chain viability and scale.Stronger volumes and stable policies will create the business environments and long-term visibility needed for a thriving supply chain.The growth opportunity ahead for offshore wind is substant

118、ial.However,the risk for the offshore wind sector is that measures put in place,especially from 2022,to increase supply chain resilience whether in the form of local content incentive packages such as IRA or trade defence mechanisms may result in additional hurdles for market participation,higher co

119、sts of project CAPEX,ultimately,a slowdown in deployment.The industry must respond to and prepare for the risks on the horizon,embracing better collaboration,standardisation,and sustainable innovation that can help to ride out the turbulence of the macroenvironment.Vector 4.Accelerating permitting f

120、or offshore windAccelerated permitting timetables represent a tangible,solvable barrier to the rapid scale-up of offshore wind energy.This section of the report outlines the relationship between lengthy permitting lead times and increased risk exposure.The longer a project takes to permit,the more c

121、apital is spent,and the greater risk is borne by the developer in the time between securing an offtake agreement and reaching the final investment decision on a project.Governments,developers,and civil society must collaborate to remove obstacles and concentrate on robust systems with a shorter perm

122、itting lead times as well as aligning different interests in the ocean for offshore wind projects in order to provide the planning and permitting processes that will propel the shift to a net zero economy.Vector 5.Collaborating with communities and driving social consensusThe anticipated scale-up of

123、 offshore wind development serves as a window of opportunity for countries to pursue economic and social regeneration along their coasts.However,seizing this opportunity will require a well-established policy framework and support from local communities.Drawing on lessons from community engagement f

124、or offshore wind development globally,this chapter outlines best practices and draws on lessons from key markets.Vector 6.Realising a trained and diverse workforceThere are two very distinct opportunities to grow the workforce of the wind energy industry up-skilling and re-skilling.To seize the bene

125、fits of job creation in the offshore wind sector,the industry,local,and national governments should put in place holistic plans to engage key stakeholders early in the offshore wind development process.Empowering the local workforce and strengthening international networks can also support offshore

126、wind development.The economic effects of the transition to renewables through the support of re-skilling and workforce development programmes will bring sustainable value to society.Vector 7.Building modern and efficient grids to underpin the energy transitionA common challenge facing offshore wind

127、markets is how to scale up and coordinate transmission connections for offshore wind.There are different models available,each with advantages and disadvantages.Aligning grid infrastructure development with clear regulatory frameworks ensures not only the seamless integration of new wind energy proj

128、ects but also the optimisation of existing capacities,fostering a resilient energy system capable of supporting the broader objectives of industrialisation and sustainable development.Using these key pillars of growth,the global offshore wind industry,working together with government and key stakeho

129、lders,can chart a strong course for continued and sustained growth.The StoryThe Story 17GWEC|GLOBAL OFFSHORE WIND REPORT 2024PART 1:OFFSHORE WIND AS A KEY TECHNOLOGY IN THE GLOBAL ENERGY TRANSITION GWEC.NET 18Part 1:Offshore wind as a key technology in the global energy transition At COP28,130 count

130、ries adopted a historic target to triple renewable energy by 2030,demonstrating the worlds commitment to accelerate the energy transition onto a Paris Agreement trajectory.To meet this level of ambition and stay on a 1.5C pathway,at least 2 TW of wind energy will be needed by 2030,and 8 TW of wind w

131、ill be needed by 2050.1 In this part of the report,we will outline compelling arguments and in-depth analysis on the competitiveness of offshore wind,examining five key perspectives:(1)large-scale,reliable power,(2)cost-effectiveness,(3)support for industrialisation and sustainable economic growth,(

132、4)fostering a sustainable blue economy,and(5)the importance of public-private partnerships.1.Offshore wind provides large-scale,reliable power.Projections show that offshore wind can deliver one-third of the required global power sector emissions reductions for a net zero world by 2050.To achieve th

133、at,the world will need 380 GW of offshore wind by 2030,and 2,000 GW of offshore wind by 2050,according to IRENAs World Energy Transitions Outlook.The World Bank estimates that there is over 71,000 GW of offshore wind technical potential globally.Much of this growth will come from outside the core hi

134、storic markets of Europe and China.Offshore wind presents one of our strongest assets when it comes to meeting these goals,whilst enhancing economic stability.Over the last two decades,the sector has achieved remarkable success establishing itself as a mature,competitive,and globally scalable source

135、 of energy.Offshore wind provides large-scale,reliable power.Offshore wind addresses the pressing issues of energy resource diversification and enhanced energy security by offering higher capacity factor and large power output.It achieves this without competing for limited land space and effectively

136、 displaces conventional baseload power1.For example,the largest offshore wind farm,the 3.6 GW Dogger Bank in the UK,will power 6 million homes annually,once complete.This makes offshore wind Offshore wind competitive advantage5010015020025030020142015201620172018201920202021202220232024Energy Index(

137、Index)Energy transition Metal Index(Index)Figure 1:Commodity Index by IMF,2014-2023Source:IMF,20241.https:/ 19GWEC|GLOBAL OFFSHORE WIND REPORT 2024Part 1:Offshore wind as a key technology in the global energy transition Offshore wind is an outstanding contributor to energy security,due to its high s

138、cale and capacity factors combined with the complementarity with other renewable resources,like onshore wind and large hydropower,as in many countries and regions in the world.This will certainly be the case of Brazil,where the nearly 100%interconnected power system allows large volumes of energy to

139、 be transferred between regions,taking advantage of spatial and temporal complementarities in this country with continental dimensions.This contributes to a secure and reliable power system,which is also resilient against climate changes.Climate change poses significant risks to traditional power ge

140、neration sources.Notably,hydropower,which heavily depends on water availability,is vulnerable to fluctuations in rainfall and river flow levels.Countries experiencing droughts due to climate change face reduced hydropower capacity,threatening energy security and reliability of the power system.For i

141、nstance,in recent years,Brazil has been experiencing the impacts of climate change.The 2021 water crisis revealed that existing hydropower plants in the country,which need to be supplemented to ensure their historical role,can no longer ensure the security and reliability of the power system.The dec

142、reasing availability of water for this generation source is a current issue and may become a permanent challenge in the near future.The Ten-Year Energy Plan(PDE)2031,developed in 2021 by EPE,acknowledged the necessity for additional generation capacity to offset the diminished contribution of hydroe

143、lectric plants to the security and reliability of the electric power system.This additional generation could reach 15 GW in the coming years,only considering operational restrictions related to the multiple uses of water,such as navigation,fishing,and other activities and community uses.Since climat

144、e change was not factored into this study,this number could be even higher once extreme events such as the 2021 drought tend to become more frequent.Similarly,nuclear and thermal power plants,which rely on consistent water supplies for cooling,can be compromised by hot heat waves or by droughts.Thes

145、e conditions can force plants to operate below capacity or even entirely shut down,as seen last summer in France3,when high river temperatures limited nuclear power production.Also,during an unusually warm summer in 2018,the regions hydropower reservoirs were depleted,boosting energy imports from co

146、ntinental Europe.Additionally,some nuclear facilities in Sweden and Finland,the regions second largest power source after hydropower plants,shut down or reduced power due to the heatwave.As said before,extreme events tend to become recurrent in the years to come,as climate changes impact.Resilience

147、of the power systems in climate change scenarios can be strongly supported by offshore wind at both the national and regional levels,when counting on a vast interconnection capacity.This will allow the strategically diversified electricity mix to address in many markets the climate change-related me

148、teorological phenomena,such as water scarcity crisis,as mentioned above.Case Study:Resilience against climate change and water shortages3.https:/ 20Part 1:Offshore wind as a key technology in the global energy transition projects well suited to ensuring energy security,system resilience,and independ

149、ence at a national level.12.Offshore wind is better value for money than the alternatives Speeding up the delivery of offshore wind projects will deliver affordable electricity and savings to bill-payers.It also reduces consumer reliance on high,volatile fossil fuel prices,and enhances energy securi

150、ty.Increased commodity price inflation has impacted the global economyThe post-COVID demand surge that caused global logistics and supply chain disruptions was remarkable,and the subsequent invasion of Ukraine by Russia caused massive disruptions in global markets.Increased gas prices drove energy p

151、rice rises which were felt acutely and have impacted global economic growth.According to the IMFs(International Monetart Fund)primary commodity prices index,the commodity prices index was at 300-unit points in 2023,compared to 100-unit points in 2016.This means that primary goods were three times mo

152、re expensive in 2023 than they were in 2016.(see Figure 1 below)4.Further global logistics bottlenecks also result in a perfect storm for price spikes.The impacts cut deeply globally,especially in developing economies which are less able to absorb higher costs for everything from grain to gas.Nearly

153、 every form of new infrastructure and energy generation,including offshore wind projects,have seen significant costs increase due to short-term headwinds.Offshore wind remains competitiveHowever,compared to other forms of electricity generation,such as gas,offshore wind remains cost competitive and

154、experienced a lower cost increase between 2020 and 2023.Research by RenewableUK found that increasing amounts of offshore wind would actually save every UK billpayer GBP 68 per year by 2035 compared to gas,and not investing in offshore wind could expose people to the risk of being GBP 133 worse off

155、if recent gas price trends continue5.Examining the broader downward trend for offshore wind costs over the last decade compared to the overall upward trend in gas prices,shows that offshore wind has become highly cost-competitive when deployed at scale.In the second half of 2023,the average LCOE 201

156、42H20152H20162H20172H20182H20192H20202H20212H20222H20232H0USD/MWh100150200250300Germany CCGT(LCOE+31.0%from 2014-2023)Germany OFW(LCOE-61.6%from 2014-2023)95114149144UK CCGT(LCOE+21.0%from 2014-2023)UK OFW(LCOE-51.7%from 2014-2023;LCOEGermany CCGT+52%Germany OFW-18%UK CCGT+80%UK OFW+58%Figure 2:LCOE

157、 for UK&Germany Wind Project V.S Combined Cycle Gas Turbine(CCGT),2014-2023Source:BNEF,2023 2H(Note:Germany CCGT data between 2021 2H-2022 2H are unavailable hence it has been normalised to zero)5.https:/ OFFSHORE WIND REPORT 2024(Levelised Cost of Energy)for offshore wind was 114 USD/MWh in the UK

158、and 95 USD/MWh in Germany.In contrast,the average CCGT(Combined-Cycle Gas Turbines)cost was 144 USD/MWh and 149 USD/MWh during the same period,making gas generation LCOE at least one-third higher than offshore wind.While there are currently insufficient data sets for illustration purposes arising fr

159、om Asia.However,the overall downward trend in LCOE trend applies to offshore wind projects in both mature and emerging markets worldwide.In China,LCOE for offshore wind is around 48 USD/MWh in a low scenario based on the statistics released by BNEF in the second half of 2023.Several factors which ha

160、ve contributed to the delivery of these low prices for offshore wind.Firstly,Chinese offshore wind benefits from the economies of scale due to having the worlds largest wind supply chain.Although the capacity factor is lower than projects in the North Sea,the local LCOE is still lower than Europe fo

161、r several reasons:1.)the Chinese wind turbine prices are extremely competitive;2.)the cost of debt is lower than the UK and Germany as the majority of investors are state-owned utilities,and 3.)commodity prices are more stable in China than in Europe,and supply chain components can be sourced domest

162、ically,helping Chinese developers to avoid the price hikes in logistics.BNEF outlook shows that despite the near-term macroeconomic headwinds,project delays and cancellations in the US and UK,the offshore wind sector is set to grow in the long term.With an increasing number of offshore wind targets

163、globally,the growing demand for offshore wind will effectively push down costs across the offshore wind value chain.The global LCOE is expected to decrease by over 10%by 2025 and one-third by 2035.6 3.Offshore wind can support industrialisation and sustainable economic growth Offshore wind can serve

164、 as a catalyst for industrialisation by driving the expansion and modernisation of critical infrastructure.The exponential growth in the wind sector over the last ten years presents a significant opportunity for advancing manufacturing competence,developing local and global supply chains and enhanci

165、ng skills and workforce capabilities.As sectors increasingly demand energy for their operations,to align with the current energy transition scenario,companies must prioritise procuring their electricity from sustainable renewable sources.This is crucial for maintaining business attractiveness and co

166、mpetitiveness,by complying with local and international ESG(Environmental,Social,and Governance)commitments and providing added value to their products by decarbonising their supply chains.Large-scale offshore wind presents a significant opportunity to meet the rising demand for clean energy and rea

167、lise sectors decarbonisation ambitions.This is especially critical for industries in energy-intensive sectors and hard-to-abate industries.An important sector,which is expanding rapidly,is the technology sector,which requires a large amount of safe energy to install its data centres.Data centres and

168、 data transmission networks each represent approximately 1-1.5%of global electricity use.Offshore wind farms offer a strategic solution for meeting 6.BNEF,2H 2023 LCOE Update:An Uneven Recovery,2023.7.Confederao Nacional da Indstria.Oportunidades e desafios para gerao elica offshore no Brasil e a pr

169、oduo de hidrognio de baixo carbono/Confederao Nacional da Indstria.Braslia:CNI,2023.GWEC.NET 22this demand,providing large volumes of clean energy while being situated in close proximity to consumer centres.Furthermore,offshore wind,through the production of green hydrogen or green fuels,also has a

170、potentially significant role to play in the decarbonisation of the refining and chemical industries.Hydrogen produced by electrolysis has the potential to develop the fertiliser market,since most of these products are nitrogenous and use ammonia as the basis of the formation process.In the steel ind

171、ustry,low-carbon hydrogen can be used to produce steel,known as green steel,which is emerging worldwide as an opportunity to replace fossil fuels in the industrial process.Like the steel industry,refineries are large-scale consumers of grey hydrogen.Produced from the reforming of natural gas,grey hy

172、drogen could be replaced by low-carbon hydrogen.Another decarbonisation alternative potentially powerful is the production of methanol using low-carbon hydrogen,in addition to its applications in the transport and electrical energy storage sectors.7 Offshore wind farms located near major ports offer

173、 strategic advantages.These ports often feature industrial zones or export processing zones,making them ideal candidates for clean energy supply from offshore wind.This not only attracts industries seeking to reduce greenhouse gas emissions (GHG)but also optimises energy transmission and allows the

174、establishment of marine hubs for clean energy to be transformed into ammonia or e-methanol and power vessels that travel through that port.84.Offshore wind drives a sustainable Blue EconomyAs the Blue Economy opens the doors to wind energy,sustainable and equitable solutions are sought to address th

175、e current challenges in oceanic sustainable development.Offshore wind is positively contributing to ocean health,with governments ensuring equitable use of the resources with developments through transparent and strategic planning processes.These include large-scale marine spatial planning and syste

176、matic ecological and socioeconomic assessments,which are informed by social acceptance,social costbenefit analysis,and multi-criteria decision analysis,aiming for maximum positive and synergistic outcomes.Offshore wind,through advanced technology and energy-efficient practices,fosters robust and sus

177、tainable economic growth.This approach not only sets better management standards but also enhances environmental quality,striking a balance between economic development and environmental preservation.The benefits extend beyond coastal areas where projects are located,as supply chains and service pro

178、viders across countries come together to support this oceanic endeavour.The linkages between the Blue Economy,sustainable development,and economic growth are undeniable.However,traditional economic indicators,such as GDP,can be deceptive because the wealth of the country is not fully reflected accou

179、nt for lacking relevant accounting in natural capital(such asas it is forests,water,and minerals,nowadays which are critical to for ensuringe a sustainable growth),human capital(including education,skills,and health of the people),and social capital,including as it innovation(such as patents).An emp

180、iric approach to analysis of the EU case in EU shows reveals that the offshore wind industry generated 8.2024-04-EN_One Pager H2(.br)9.European wind energy competitiveness report:European Technology&Innovation Platform of Wind energy,June 2023.23GWEC|GLOBAL OFFSHORE WIND REPORT 2024Part 1:Offshore w

181、ind as a key technology in the global energy transition EURO 2.5bn of value added for each new GW of offshore wind.,which This means that,on average,every new offshore turbine added EURO 20.3m to the EU economy.It is,and it expected projected that the economic contribution in 2030 would will be 2.5

182、times more greater than the contribution in 2022.By 2030,wind energy is expected to constitute 0.81%of EU GDP,with close to 50%of this contribution coming from offshore wind9.On the opposite shore of the Atlantic,Ocean the growth of The US.offshore wind industry is expected to deliver significant ec

183、onomic benefits over the next decade and beyond.According to ACP(American Clean Power),in a high scenario with 3,000 MW installed per year and 60%domestic content,these benefits could reach$25 billion per year and support over 83,000 jobs by 2030,not accounting for additional value through tax reven

184、ues to local,state,and federal jurisdictions,emissions reductions and associated health savings,and direct payments supporting workforce development or host communities.Outside of the manufacturing of large turbine components,offshore wind represents an opportunity for domestic manufacturing.This in

185、cludes the production of steel for foundations,substations,and vessels,as well as the manufacturing of cables to transport the electricity.Additionally,there is a need for vessels to move transport components and workers to and from the project site.5.Public-private partnerships(PPP)have been instru

186、mental in achievingthe success of offshore wind to date,and the future will require new,innovative models.Partnership between government and industry has enabled the successful deployment of offshore wind globally,with governments having played a strong role in de-risking projects.Working together,g

187、overnments and industry have achieved huge reductions in the cost of offshore wind,leading to offshore wind becoming the cheapest form of new power generation in countries like the UK,Germany,and China after onshore wind and solar PV.10 Realising offshore wind in line with a net zero pathway will en

188、tail new and deeper forms of public-private partnerships,as well as ways to collaborate more widely with different stakeholders.GWEC has incubated and co-developed two key initiatives committed to the concept of collaborative action to advance offshore wind.5.1.Global Offshore Wind Alliance(GOWA):a

189、driving force on the global stage The Global Offshore Wind Alliance(GOWA),established at COP 27 in 2022 by the Government of 10.1H LCOE Data,BNEF,2023 Australia Belgium Brazil Colombia Denmark European Commission Germany Ireland Japan The Netherlands Norway Panama Portugal Spain St Lucia Romania Sta

190、te of Victoria UK USA State of California GOWA Government members(as of January 2024)GWEC.NET 24Denmark,the International Renewable Energy Agency(IRENA),and the Global Wind Energy Council(GWEC),is a multi-stakeholder,diplomatic initiative.GOWA drives diplomatic efforts to(i)raise ambition on offshor

191、e wind globally amongst governments,in multilateral forums,and with wider stakeholders,(ii)support the creation of policy frameworks and efficient offshore wind value chains to bring new and existing markets to maturity,and(iii)foster a mission-based approach among governments to drive action on off

192、shore wind deployment as a key to achieving Paris Agreements 1.5C target.It brings together governments,industry,institutions and other key stakeholders to address shared challenges to offshore wind and help governments and society to realise the significant socio-economic benefits of offshore wind.

193、GOWAs mission is to act as a global driving force for an ambitious uptake of offshore wind by helping governments boost their offshore wind ambitions and delivery.GOWAs vision is a world in which offshore wind makes a significant contribution to the energy transition and the achievement of the susta

194、inable development goals(SDGs)through large-scale renewable power generation,benefiting regions,countries,and critical sectors such as industry and transportation.GOWAs goal is to contribute to achieving a total offshore wind capacity of a minimum of 380 GW by 2030 and an installed capacity increase

195、 of at least 70 GW per year from 2030.GOWA brings together a community of both public and private stakeholders sharing the ambition of exploring offshore wind potential and turning targets into turbines,as part of the energy transition and global decarbonisation efforts.GOWA works to address the maj

196、or building blocks for offshore wind,such as framework conditions,financial de-risking,system integration,and supply chain development all important drivers to reduce costs,ensure competitive market prices,and create project pipelines at national and regional levels.GOWA acts as both a diplomatic gr

197、ouping for high ambition on offshore wind,and as a platform for capacity building,allowing its members to share experiences,knowledge,and best practices.5.2.Ocean Energy Pathway:Championing a high-ambition,sustainable vision for offshore wind Launched in December 2023,Ocean Energy Pathway(OEP)is a n

198、on-profit organisation that works to fast-track the development of a sustainable,high-ambition,global offshore wind sector,as part of a thriving Blue Economy.OEP collaborates with leaders from diverse stakeholders in the Blue Economy,including policymakers,industry,civil society,and conservation gro

199、ups,to create enabling,scalable,and sustainable 25GWEC|GLOBAL OFFSHORE WIND REPORT 2024Part 1:Offshore wind as a key technology in the global energy transition pathways for the offshore wind sector to thrive.Offshore wind as a trusted partner in the Blue EconomyAccelerating the deployment of offshor

200、e wind requires a holistic approach that proactively addresses challenges and works closely with stakeholders at the heart of the Blue Economy.OEPs vision for sector development is one that grows in harmony with marine ecosystems and meets the needs of coastal communities and other ocean users.Desig

201、ning the right enabling policy framework is crucial,and this means considering impacts on interconnected sectors and stakeholders.If done well,policy and regulatory development can not only enable the successful and rapid development of offshore wind projects,but also ensure offshore winds place as

202、a central solution to building a sustainable,responsible,and equitable Blue Economy.OEP knows it is possible to deliver ambitious wind energy targets and accelerate the energy transition without compromising nature and communities.Offshore wind has immense potential for socio-economic and environmen

203、tal benefits,such as revitalising coastal communities through green job creation and creating new habitats for marine life through reef growth on turbine foundations.As an accelerator and trusted partner at the heart of the ocean-energy-climate nexus,OEP fills a crucial gap by building a shared and

204、strategic plan for a thriving sector,bringing together policymakers and leaders across industry,civil society,conservation groups,and other key stakeholders,who rely on the ocean for their livelihoods.Building shared strategies for offshore wind across marketsAn increasing number of countries with p

205、reviously little track record in offshore wind are setting ambitious targets forto expanding offshore wind in their energy mix.In Asia-Pacific for instance for example,Japan has set a target of 10 GW of installed capacity by 2030,and South Korea is aiming for 14.3 GW by 2030.Coupled with the interna

206、tional pledge made at COP28 to triple renewable energy,offshore wind energy is poised to play a key global role in meeting energy and climate targets.Yet market potential and political momentum alone are not sufficient to generate the exponential growth in offshore wind required to deliver the ambit

207、ious national targets and the global commitments to triple renewable energy.Especially in emerging offshore wind markets,new strategies are needed to accelerate the sustainable development of the sector.OEPs approach addresses these challenges and opportunities for a successful offshore wind market

208、through three key pillars:enabling market and industrial dynamics,policy and regulatory readiness,and the social and political environment.For the successful,rapid deployment of offshore wind,the market and industry must be equipped with adequate infrastructure,a skilled workforce,and competitive an

209、d sustainable supply chains to manufacture and deliver offshore wind projects.To encourage industry investment for market growth,governments must set ambitious offshore wind installation targets and prepare fit-for-purpose regulations.Permitting and leasing regimes must be streamlined to reduce unce

210、rtainty for developers.Environmental impact assessments and marine spatial planning need to be robust to address various environmental,economic,and social impacts,and to deliver in the medium to long term for the industry,the marine environment,and adjacent sectors and stakeholders in the Bblue Eeco

211、nomy.Around these developing regulations,timely and collaborative stakeholder engagement should facilitate information-sharing between the industry,local communities,and other ocean stakeholders and help build a socio-political environment favourable to rapid and sustainable offshore wind deployment

212、.In some emerging markets,policymakers lack the capacity,expertise,understanding,or political consensus on offshore wind,which can lead to delayed legislation and ultimately hold back potential deployment of projects.This is the case in Brazil,where offshore wind offers significant potential to supp

213、ort green industrialisation,but offshore legislation has been subject to politicking and delays as it passed through the senate.Consequently,much work is now required to build out regulations to ensure an investable sector.In other cases,offshore wind development faces mounting opposition from local

214、 communities,fisheries,and conservation groups.In South Korea and Japan,local communities have raised concerns about potential impacts on marine life and fishing industries.Each market may have GWEC.NET26different challenges,but all need to foster alignment across the three categories of market and

215、industrial dynamics,policy and regulatory readiness,and the social and political environment.OEP builds strategies and funds programmes to address challenges across these elements that form the Pathway to offshore wind.Bespoke on-the-ground technical assistance in emerging offshore wind marketsOEP i

216、s focused on scaling offshore wind in at least ten countries with substantial offshore wind resources and at the frontier of the energy transition,including Japan,South Korea,India,and Brazil.OEP scopes and funds on-the-ground technical assistance and hands-on support for decision-makers and other s

217、takeholders,tailored to the needs and context of each market.OEP also facilitates interfaces between industry and civil society and provide education and alignment for stakeholders in the Blue Economy.This year,OEP has launched operations in Brazil,Japan,and South Korea.Preparations for new teams in

218、 OEPs other priority countries,including India and the Philippines,are underway.Establishing in-country operations and presence equips OEP with the expertise,capacity,and ability to understand the nuanced socio-political context in each country,respond promptly to challenges and opportunities,and bu

219、ild trusted relationships with local stakeholders.In addition to tailored in-country support,OEP supports work to combat misinformation and disinformation about offshore wind power through specialised events on misinformation and a dedicated database for offshore wind.This year,OEP hosted a disinfor

220、mation summit,that brought together leaders from governments,industry,civil society and experts in the community to discuss effective and collaborative approaches to tackling disinformation on offshore wind.OEPs Offshore Wind Resource Library,a bespoke,user-friendly,one-stop digital library on offsh

221、ore wind,addresses the challenge of accessing reliable information.Policymakers and blue economy stakeholders often find it challenging and time-consuming to find relevant information on offshore wind as resources and data are spread across different channels and sources.By making information access

222、ible,free,and easily searchable to global audiences,our platform encourages knowledge-sharing and tackles misunderstandings,misinformation,and disinformation often associated with offshore wind development.As an independent not-for-profit organisation,partnering closely with industry,OEP is position

223、ed to deliver trusted expertise and build a shared space to establish the socio-political,policy,and regulatory environments needed to support the rapid deployment of offshore wind for a thriving Blue Economy.Part 1:Offshore wind as a key technology in the global energy transition 27GWEC|GLOBAL OFFS

224、HORE WIND REPORT 2024PART 2:BUILDING AN OFFSHORE GROWTH FRAMEWORK TO ACCELERATE THE ENERGY TRANSITIONGWEC.NET 28Part 2:Building a growth framework for offshore wind As set out in the introduction,the next few years are critically important for the future of offshore wind.As a large-scale infrastruct

225、ure technology,with complex financing and stakeholder structures,offshore wind projects require a stable framework for growth with clear visibility of the horizon.Therefore,for offshore wind to be able to play a key role in decarbonising and sustainably growing economies in the 2030s and beyond,supp

226、ortive market frameworks must be put in place now.In this section,we set out a growth framework for unlocking offshore wind in both maturing and emerging markets.The framework covers the following key market and regulatory areas:1.Financing offshore wind in emerging and mature markets,across the glo

227、bal north and south 2.Growing demand for offshore wind-industrial offtakers and development of green products as a growth accelerator 3.Building the global offshore wind supply chain for a 1.5C world 4.Accelerating permitting for offshore wind5.Collaborating with communities and driving social conse

228、nsus6.Realising a trained and diverse workforce7.Building modern and efficient grids to underpin the energy transitionA Growth Framework toAccelerate Offshore Wind DeploymentEfficient network planning at the outset MODERN ANDEFFICIENT GRIDS7Develop comprehensive strategy with skill assessment and ga

229、p analysisWORKFORCE6Speed up the permitting process by establishing single focal points and mandate maximum lead times4PERMITTING Holistic stakeholder engagement strategy and active plan to positively alter perceptionsSOCIAL CONSENSUS 5Bottlenecks are expected from 2026/2027.Collaboration on supply

230、chain and infrastructure such as vessels and ports is imperative to address the challenges.Supply chain diversification is necessary,but trade policies should not slow-down the current deployment.3SUPPLY CHAINBuild demand for green products in hard-to-abate sectorsGREEN PRODUCTS 2Get capital to EMDE

231、s by tackling non financial barriers to reduce risk.New models that streamline the participation of blended finance will be critical.EMERGING MARKETSEnsure viable pricing for offshore wind Balance cost and value,stop race-to-the-bottom tender mechanisms,avoid negative bidding MATURE MARKETS1FINANCIN

232、G 29GWEC|GLOBAL OFFSHORE WIND REPORT 2024Globally,there is a substantial amount of capital ready to deploy into the offshore wind sector but there is a shortage of bankable projects which are properly structured,permitted,and de-risked with viable offtakers or a viable route to market.Offshore wind

233、is a capital-intensive infrastructure sector.One of the major costs these projects face is the cost of capital,with a significant percentage of the project cost usually comprised of borrowed capital.To attract private investors,maintaining a focus on the financial viability and bankability of projec

234、ts is imperative.To enable offshore wind developers to invest,the project economics must stack up in the wider macroeconomic environment,accounting for inflation and cost of capital.At the market level,auction and market design,and the price set in auctions and tenders for offshore wind must be viab

235、le to ensure investment.In 2023,the energy sector was hit by rising raw material costs,the effects of inflation,increased financing costs and uncertainties around logistics and supply chains.The cost of coal,natural gas and nuclear all rose2,as did costs in other infrastructure sectors.In mature mar

236、kets,with established supply chains,offshore wind remains cost-effective for consumers,compared to other energy infrastructure choices3 but has not been immune to these macroeconomic challenges.In recent discussions convened by the Global Offshore Wind Alliance(GOWA),participants have strongly highl

237、ighted that non-financial barriers hinder the bankability of projects,resulting in a misalignment between viable projects and available capital.These barriers include a lack of policy clarity,artificial constraints on market size artificially constraining the size of the market by limiting the amoun

238、t of GW which that can be built,onerous or unclear permitting requirements,but also,crucially,the lack of a clear route to market,or badly designed auction schemes.This section outlines practical actions that can be taken to improve these non-financial project challenges.As GWEC has noted previously

239、,there is also significant concern in the industry regarding unviable race to the bottom auctions.Embedding market and regulatory imbalances that favour projects with the lowest bids,coupled with auctions which cap the amount of GW that can be built have resulted in a race to the bottom on wind pric

240、ing.For example,some auctions have been conducted under negative bidding scenarios4,where the auction design requires project developers to pay for the right to build their wind farms.This,combined with inflationary pressures,has exacerbated the squeeze on profitability for the wind industry.Well-st

241、ructured regulatory frameworks and a pragmatic approach to stabilising pricing strategies can pave the way forward.The focus must shift beyond a simple comparison of offshore wind to traditional fossil fuels and instead,Part 2:Building a growth framework for offshore wind Section 1:Financing offshor

242、e wind in emerging and mature marketsCost of CapitalThe cost of capital is the minimum rate of return that a bank(when lending)or a company must earn on its investments to satisfy the expectations of its investors/shareholders.The weighted average cost of capital(WACC)represents the financing cost a

243、 company incurs to raise funds from both debt and equity sources,including the interest rate paid on debt and the return expected by equity investors.The WACC will vary depending on many factors,a select few including:l The current macroeconomic environment(e.g.whether there is high inflation enviro

244、nment,if central banks raising or lowering interest rates,etc.)l The liquidity available to banks;if banks are flush with liquidity,interest rates are usually lower.l Alternative uses of the funds,along with their returns and risk profiles.1.Financing Offshore Wind,pwc,20202.1H LCOE Data,BNEF.20233.

245、https:/www.iea.org/reports/renewable-energy-market-update-june-2023/how-much-money-are-european-consumers-saving-thanks-to-renewables?4.https:/windeurope.org/newsroom/press-releases/german-offshore-auctions-award-7-gw-of-new-wind-future-auctions-must-avoid-negative-bidding/GWEC.NET 30In 2023,both th

246、e US and UK offshore wind markets faced acute challenges due to a combination of inflationary pressures,rising interest rates,and policy issues.Some projects,which had their offtake prices locked in during a period of historically low costs prior to the Covid-19 pandemic and the war in Ukraine,were

247、particularly affected.In the United States,crucial“first wave”projects vital for establishing and expanding the offshore wind supply chain were put into jeopardy.There were 12 GW of projects affected.Of these,nine projects,totalling 7.7 GW,had either their offtake agreements terminated or had the wh

248、ole project development ceased.These projects faced challenges,including increasing interest rates,regulatory uncertainties,slow permitting,and unachievable local content rules,as well as growing pains encountered by a relatively young industry.The situation is now steadily improving,and in June 202

249、4 new offtake prices for New York State projects were announced5.(see the USA Markets to watch section for further details).In the UK,the recent AR5 auction ended with no bids due primarily to a lack of commodity price indexation and administrative strike prices(ASPs)being set at an unrealistically

250、low level.The Contract for Difference(CfD)“pot”structure was also changed,resulting in offshore wind,solar,and onshore wind being grouped together in one pot.However,the UK Government has since published revised ASPs for the next CfD AR6 auction,raising the maximum price ceiling by 66%6.These revise

251、d prices represent the upper limit of strike prices to be awarded in the next auction.Case Study:US and UK macroeconomic challengesfocus on how much we truly value long-term stability in our energy systems.To advance,we must devise strategies to stabilise the cost of capital,ensuring that investment

252、s continue to flow into the sector.Recommendations for improving bankability in mature markets l Prices for offshore wind must be viable to establish business confidence and therefore secure investment.l Balance cost and value,stop race-to-the-bottom tender mechanisms,avoid negative bidding priorits

253、e getting GWs into the global market.l Policy mechanisms should take into account inflationary effects and reflect these in strike prices/tender parameters through indexation and other methods.l Recognise that establishing new supply chains takes time and comes with a cost premium measures must also

254、 ensure that supply chain investment remains protected against macroeconomic externalities to facilitate local supply chain development while maintaining global competitiveness.l Policies should facilitate a balanced risk and reward sharing between developers and offtakers and should promote industr

255、y collaboration and reliability.5.https:/ 6.https:/www.gov.uk/government/news/boost-for-offshore-wind-as-government-raises-maximum-prices-in-renewable-energy-auctionPart 2:Building an offshore growth framework to accelerate energy transition 31GWEC|GLOBAL OFFSHORE WIND REPORT 2024IntroductionTo meet

256、 global climate goals and deploy offshore wind in line with global targets,the following are required:l More capital investment in offshore wind and other renewable energy(RE)in emerging market and developing economy(EMDE)countries.l Addressing insufficient investment due to risk perceptions that ma

257、y not accurately reflect the actual underlying risks(e.g.,risks may be overstated).l Utilising blended finance(see later for definition)as a necessary part of the solution to address these risk perceptions.l Continuing to use project finance as the preferred financing method for offshore wind,as it

258、is for many large infrastructure projects.l Assessing the ability of concessional and blended finance in their current forms to scale sufficiently to meet the multi-trillion dollar needs of EMDEs through 2030 and beyond to 2050.The current situationBloomberg New Energy Finance(BNEF)recently released

259、 its Energy Transition Investment Trends 20247.This report noted that in 2023,$1.77 trillion was invested in the energy transition,with the biggest largest amounts going to renewable energy(RE)and grids(combine almost$1 trillion combined).After the electricity sector,electrified transport was the la

260、rgest destination of energy transition capital,which,of course,needs to run on carbon-free RE to power it to be truly clean.To meet the Paris accords 1.5C target as well as the net-zero commitments of many countries and companies,in addition to COP28s pledge to triple renewable energy,BNEF states th

261、at it would require$12 trillion of investment in the power system up until 2030 an average of$2 trillion per year starting in 20248.This represents a significant increase from current annual investments into RE,with much of this investment needing to be directed towards emerging markets and developi

262、ng economies(EMDEs).02004200520062007200820092010201120122013201420152016201720182019202020212022202320051801071561532132123133884284695265659341,1901,511Power gridsClean shippingClean industryElectrified heatElectrified transportHydrogenCCSEnergy storageNuclearRenewable energy1,76926723933400600800

263、1,0001,2001,4001,6001,800$billionBNEF Energy Transition Investment Trends 2024Source:BNEFFinancing offshore wind challenges in developing economies 7.https:/ 2:Building an offshore growth framework to accelerate energy transitionGWEC.NET32However,recent history demonstrates that investments in RE in

264、 EMDEs are falling short.The graphic on below illustrates the total clean energy investment by year by category(EMDE,China and advanced economies).Meanwhile,the graphic on the right shows GDP and population by the same categories.When comparing investment in clean energy to GDP,EMDE countries receiv

265、e significantly less investment compared to either China or the advanced economies.It is critical to bring more RE and other clean energy sources to EMDEs.Over the past decade,more than 95%of the increase in greenhouse gas emissions has occurred in EMDEs,and these countries will be the source of 98%

266、of world population growth by the end of this decade9.EMDE countries clearly need more investments in clean energy.We can achieve that by accelerating the deployment of offshore wind.Offshore windOffshore wind is a critical building block of any decarbonised future.Indeed,in many of the fast-growing

267、 EMDEs in Asia such as Vietnam,the Philippines,and India,offshore wind can provide large-scale,continuous power and is therefore seen as a key energy transition technology.However,in many of these countries(excluding China),the industry faces relatively high financing costs due to the perceived risk

268、s.This poses a challenge because when the cost of capital(weighted average cost of capital or WACC)is 1%higher,total CAPEX costs for an offshore wind project increases by approximately 8%.Thus,a higher cost of capital plays an outsized role in the overall costs of offshore wind.The significant incre

269、ase in the cost of finance for many offshore wind projects is evident,with key interest rate indices(such as SOFR)rising from 1%to 2%in 2019-even reaching near 0%in 2020-to 5.4%in May 202410.On top of the indices,banks typically charge premiums that depend upon their view of in-market,technology and

270、 other risks related to the project.While some of the risks canbe quantified and mitigated(e.g.through insurance,monitoring requirements,government guarantees,currency hedging,etc.),many cannot and rely on the comfort level of the banks.Comfort is a subjective measure,with different financing instit

271、utions having their own criteria and assessment,but comfort is also often supported by extensive quantitative analysis.For example,a banks market advisor may run multiple scenarios to get the bank comfortable with a specific risk.There are also softer risks to consider.For instance,is the bank comfo

272、rtable with the team leading the project(and how do they define this)?How predictable is the regulatory structure,and does it change often?Does the government have a history of retroactively applying policies to the detriment of projects?When banks lack understanding of risks,they tend to increase t

273、he premiums demanded.This is partly why developers spend so much time educating banks,sharing aspects of EMDEChinaAdvanced economiesPopulationGDP50001,0001,5002,000100%25%0%50%75%BIllion USD(2022,MER)Clean energy investmentEconomy and demography201820192020202120222023eClean energy investment in EMD

274、Es,China and advanced economiesSource:IEA9.https:/ 2:Building an offshore growth framework to accelerate energy transition 33GWEC|GLOBAL OFFSHORE WIND REPORT 2024a project,building confidence in the management team,and taking the bankers on tours of completed facilities,etc.Influencing the perceptio

275、ns of risk is critical if the cost of finance for EMDEs is to be reduced.Without being able to reduce the perceptions of high risks in EMDEs,the industry will struggle to deliver decarboniszation goals,even with the support of concessional and blended finance.What can we do to change the perceptions

276、 of financing risk in EMDEs?Lessons from the past Wind Europe(2023)states that despite the challenging funding requirements,both traditional and new investors seem optimistic and willing to continue to invest in offshore wind.According to them,the most important risk factor is not the availability o

277、f funding but regulatory instability.Evidently,the high level of uncertainty that comes with changing regulatory frameworks has slowed down offshore wind energy deployment in many European countries,not least in the two largest markets,the UK and Germany.Nevertheless,as long as Europe ensures a stab

278、le framework for offshore wind,the required capital can be channelled into the sector11.A familiar refrain The graphic below shows the trajectory of risk premiums in Europe over the early days of large-scale offshore wind projects(2011-19)will a similar story unfold in many new offshore wind markets

279、 globally,including many EMDEs?As the European offshore wind market matured and banks became more comfortable with the way risks were managed,and policy and regulatory frameworks put in place,risk premiums reduced dramatically from roughly 325 basis points(or 3.25%)to approximately 150 basis points

280、above LIBOR(LIBOR has been replaced by SOFR,or the Secured Overnight Financing Rate).A drop from a 325 to a 150-basis point premium could reduce the CAPEX of a project by approximately 15%-a significant change for any large-scale capital project like offshore wind(and solar,batteries,grid upgrades,e

281、tc.).Understanding lending banks Banks are in the business of lending money(among other financial activities).Lending banks typically do not want to:l operate a facility/project20025030050Basis points above LIBOR020102012201220132014201520162017201820192020100150350400United KingdomGermanyNetherland

282、sBelgiumSpreads(in bps above LIBOR)for offshore wind projects between 2011-2019,bubble size represents wind farm capacitySpreads for offshore wind projects decreased from 325 to below 150bps over the past decadeSource:PwC analysis based on WindEurope(2020)11.Wind Europe:Wheres the money coming from?

283、Financing offshore wind farms,November 2013:https:/www.ewea.org/fileadmin/files/library/publications/reports/Financing_Offshore_Wind_Farms.pdfPart 2:Building an offshore growth framework to accelerate energy transitionGWEC.NET 34l expose themselves to increasing their commitments(cost-overruns,etc.)

284、l liquidate a project and take ownership Banks typically dont benefit from the upside if the project performs well(their upside is full repayment of the loan and interest),unlike equity investors who enjoy the upside potential.Instead,banks are exposed primarily to downside risks such as missed loan

285、 payments.They also typically receive lower returns than equity investors,reflecting the risk they assume.During an extensive due diligence process,banks engage various advisors(technical,legal,environmental and social,etc.,all paid by the project sponsors).They assess factors such as a stable polic

286、y environment,reputable contractors,experienced developers,creditworthy off-taker(s),limited country risk,and currency convertibility before extending loans to projects.In general,banks do not want to take risk.If they must take on a risk,such as limited currency convertibility available,they adjust

287、 the premiums they charge accordingly.Higher risk loans may also impact banks capital adequacy ratios,requiring them to keep more capital in reserve,as outlined in Basel III regulations.Consequently,lending to risky projects diminishes their available lending pool,prompting banks to potentially rais

288、e lending rates to compensate for this reduction.How banks determine their lending rates Bank loans will typically be benchmarked to an index,either an international index like the London Inter-Bank Offered Rate(LIBOR,now replaced with the Secured Overnight Financing Rate,or SOFR),or a local index w

289、hen loans are provided in local currencies,such as the BVAL or Bloomberg Valuation index for Philippine peso fixed-income securities14.The bank then adds to the index a spread or premium to account for their margins,risks they perceive,etc.,this all in the wider context of macroeconomic situation,al

290、ternative uses of the funds,etc.A study called Project Finance:Determinants of the Bank Loan Spread15 analysed over 2,000 project financings globally,including many in EMDE countries.The study showed that the existence of government guarantees reduces loan spreads significantly,as did the perceived

291、level of risk.See the table below.These are just some of the factors banks consider,but going from a low risk country with guarantees,to a high risk country without guarantees increases the cost of debt by 107 basis points(218 111).Any risk that can be mitigated will reduce the premium or spread tha

292、t the banks charge.Consider the following graphic prepared by ESMAP/World Bank.On the left is a hypothetical risk-free cost of capital(typically SOFR,formerly LIBOR,it could be in local currency indices as well).Added to that are premiums(dark blue)for the various risks(grid,land acquisition,politic

293、al risks,etc.)to Project finance spreads/premium charged above LIBOR(Basis Points)High Risk CountryLow Risk CountryWith Guarantee1501 1 1Without Guarantee21820012.https:/www.bis.org/bcbs/basel3.htm13.https:/www.newyorkfed.org/markets/reference-rates/sofr14.https:/.ph/wp-content/uploads/2018/10/BVAL-

294、GSAC.pdf 35GWEC|GLOBAL OFFSHORE WIND REPORT 2024Part 2:Building an offshore growth framework to accelerate energy transitioncome up with the cost of capital accounting for all risks,this before the mitigation of those risks.The light blue reductions in risks are the mitigation activities that are un

295、dertaken to lower the cost of capital.After all mitigation activities,there is the remaining residual risk premium,i.e.the difference between the risk-free rate and the hypothetical improved cost of capital.Consider the implications of each of the risks being considered in the graphic.If a conservat

296、ive(meaning high premium)is applied to each risk factor,the effect is to compound each risk premium,thus resulting in a much higher spread.This is where additional education and other activities to increase understanding of the key issues faced by a project(or the industry in general)can help when b

297、anks are assessing each type of risk and how to price it.Blended financeBecause commercial banks will fully price in all risks(the blue above),blended finance is often brought in to provide mitigating activities,such as political risk insurance to mitigate against changes in law or regulations,or ot

298、her issues that increase the perceived risks.See the text box for the World Economic Forums definition of blended finance.Blended finance is not a new concept,but there has been increasing focus on it as a method to accelerate clean energy finance in EMDEs.How blended finance helps to provide financ

299、ing for high risk projects18Blended finance combines concessional financingloans that are extended on more favourable terms than market loansand commercial bank financing.The International Finance Corporation(IFC),a member of the World Bank Group,the Asian Development Bank(ADB)and others carry out b

300、lended finance operations in partnership with donors.Concessional financing supported by donors is combined with Development Finance Institutions(DFI)and commercial financiers regular investments.A recent IFC/World Bank report19 found that blended finance helped set in motion high-risk projects,such

301、 as greenfield projects in untested markets,projects with sponsors without a long track record of operating in a market,or innovative schemes without proof of concept.With a direct subsidy of about 2%-5%of project costs,IFC blended finance catalysed transactions for 020Risk-freecost of capitalGridLe

302、galLandProcurementOfftakerPoliticalSubstations-basedtenders/parkschemeTransparent and competitiveprocurementprocessesGuarantees tocover political andofftaker risksTimely gridinvestmentPPA in hardcurrencyAdequateregulationResidual riskFXCost of capitalaccounting for all risksImprovedcost of capital40

303、6080100120140160180Illustrative impact on the cost of capital of operational and development risks and their associated mitigantsSource:ESMAP/World Bank15.https:/ 36Part 2:Building an offshore growth framework to accelerate energy transitionhigh-risk,potentially high-impact projects,and,in some case

304、s,mobilised other official and commercial financiers.Blended finance provides de-risking for some financial risks,but non-financial risks remain(changes in law,force majeure,slow grid development,etc.).The analysis points to the importance of the role of advisors(see below),who can reduce specific n

305、on-financial risks through recommended mitigation activities.Other interventions by the DFIs,such as assisting governments to strengthen market regulation,can also reduce regulatory risks.Thus,the blended finance instrument can be more effective in combination with other instruments to address a bro

306、ader range of risks,especially in countries deemed to be high-risk(many EMDEs).As most offshore wind(and other RE)projects in EMDEs are project financed,it is critical to understand what project finance is,as well as the complexities that blended finance brings to project finance.EPCContractorLender

307、SponsorsO&MContractorAccountBankProjectCompanyPower purchase AgreementLoan documentsCollateral security documentsAccount bank agreementSponsor supportagreement(if any)EPCContractorEquityO&McontractUtilityContractsCash flowsTypical Structure for Limited/Non-Recourse FinancingSource:GWEC Market Intell

308、igence,202418.This section draws heavily on https:/ieg.worldbankgroup.org/blog/what-blended-finance-and-how-can-it-help-deliver-successful-high-impact-high-risk-projects19.https:/ieg.worldbankgroup.org/blog/what-blended-finance-and-how-can-it-help-deliver-successful-high-impact-high-risk-projectsBle

309、nded finance has three key characteristics:l Leverage:use of development finance and philanthropic funds to attract private capital into deals.l Impact:investments that drive social,environmental and economic progress.l Returns:financial returns for private investors in line with market expectations

310、,based on real and perceived risks.Blended finance identifies the main challenges that prevent private capital from being deployed into emerging and frontier markets:l Returns are seen as too low for the level of real or perceived risks.l Markets do not function efficiently,with local financial mark

311、ets in developing economies particularly weak.l Private investors have knowledge and capability gaps,which impede their understanding of the investment opportunities in often unfamiliar territories.l Investors have limited mandates and incentives to invest in sectors or markets with high development

312、 impact.l Local and global investment climates are challenging,including poor regulatory and legal frameworks.Defining blended finance the World Economic Forum17 17.https:/www3.weforum.org/docs/WEF_Blended_Finance_A_Primer_Development_Finance_Philanthropic_Funders.pdf 37GWEC|GLOBAL OFFSHORE WIND REP

313、ORT 2024Part 2:Building an offshore growth framework to accelerate energy transitionProject financeAs most OFW projects are financed through project finance and this trend is likely to continue,it is useful to understand what project finance entails,how risks are assessed,associated timelines,and so

314、 forth.Project Finance(PF)generally refers to the long-term financing of infrastructure and industrial projects based on the projected cash flows of the project(typically a special purpose vehicle,or SPV,a legal entity that only exists to own,operate and finance the project)rather than the balance s

315、heets of its sponsors.Typically,a group of sponsors(often OFW developers,utilities,or other investors)provide the equity(25 to 30%),while a syndicate of banks or other lending institutions provide the debt(70 to 75%).These loans are mostly non-recourse loans,meaning the only recourse for lenders if

316、the SPV itself.They are secured by the project assets and fully paid from project cash flows,rather than from the general assets or creditworthiness of the project sponsors.There may be limited-recourse to the sponsors in case of cost overruns,etc.In other words,the financing is typically secured so

317、lely by the projects assets and cash flows.See diagram(page 36)for a typical project finance structure.As an SPV is typically utilised and only its cashflow is used to pay back debt,risk identification and allocation are key components of project finance.Offshore wind projects often face several tec

318、hnical,environmental,economic,and political risks,particularly in EMDEs,hence understanding these risks is critical(see the table above detailing typical risks).The benefits of PF are that it tends to clearly identify,characterise and quantify the risks involved(so that they can be fully understood

319、by all parties,and priced).The disadvantages of PF are that it is typically complicated and time consuming,this is due to the process of ensuring that the risks associated with each unique project are appropriately allocated to those best able to manage those particular risks.How offshore wind proje

320、cts differ from traditional power sector project financing20 The scale,cost,and complexity of offshore wind projects have seen most developers adopting a multi-contract delivery strategy.This is where the developer/SPV procures separate contracts for various packages of work required to complete the

321、 project such as turbines,foundations,substation,and cabling.In a traditional power plant financing there is a single EPC(engineering,procurement,and construct)contractor who takes on all the risks of delivery.Because of the complexities in offshore wind,no single EPC contractor wants to do this,or

322、if they do,they include a significant risk premium in their price which most developers find unacceptable.Consequently,most OFW wind developers prefer to manage construction themselves through a multi-contracting approach.Another significant difference is the up front capital nature of OFW compared

323、to traditional power plants.In OFW there are no fuel costs,whereas fuel costs typically account for 40-60%of a traditional power plant.Consequently,capital costs constitute the majority of the costs for OFW projects.This means that decisions made upfront(such as geotechnical assessments,design,and p

324、rocurement)potentially have a more significant impact on the total cost than upfront decisions for a traditional power plant.AdvisorRoleFinancial For the sponsors,potentially more than one depending on how many sponsors,to advise on financial structuring,help in arranging finance,assessing options t

325、o reduce financial risks,etc.Technical To undertake lenders due diligence(technical issues)to give comfort to the lenders that the project is technically viable.For the sponsors to help in the selection of turbines and other technology choices,among many other items.Environmental and socialFor both

326、sponsors and lenders,to advise on issues related to various legal and regulatory requirements,identifying issues related to fisheries,marine mammals,bird studies,etc.Legal For both sponsors and lenders to advise on all the various legal and other issues related to the projects,including all contract

327、ual documentation.Market For both sponsors and lenders.Advises on commercial,legal,regulatory,political risk,and other aspects of the market.When done for the lenders it is to assess risks.When done for the sponsors it is to justify for their boards/investment committees.20.This section draws heavil

328、y from https:/ 38The adoption of a multi-contract approach creates a more complex matrix of interfacing stakeholders.Managing that interface and dealing with the resulting risks are key issues for developers of OFW projects,and the banks that lend to them.Who is involved in project finance?Given the

329、 complexity and the uniqueness of each PF,there are typically many advisors needed to reach financial close(all paid for by the sponsors).A partial list is shown in the table below.Again,the complexities of each PF can be seen by the need for so many advisors,each of which is required to identify ri

330、sks,options and costs for mitigation,etc.The need for so many advisors underscores the complexities involved in each PF.These advisors are essential for identifying risks,evaluating options,and estimating mitigation costs.Many of these advisors will be advising the lending banks on the risks,making

331、their engagment critical to ensure that reasonable levels of risk are applied in the calculations of the risk premiums.Financial structure of an OFW projectIn the project finance structure above,there is a lender box,but typically there are multiple lenders,including commercial banks as well as DFIs

332、,export credit agencies,and others who provide debt that may be concessional in some way(lower cost than commercial banks).There may even be some first loss capital that with equity,will take the first losses(if there are any)that a project incurs.For example,in the Baltic blended finance case study

333、(see page 40),there were 25 lending banks.A capital stack ranks the priority of different sources of capital.Senior debt creditors will be paid first in the event of financial distress,while shareholders will divide what remains after all creditors are paid.Secondly,the return profile of debt and equity is inverse to the priority list.Shareholders with an equity stake have the highest return profi